External trade diversion, exclusion incentives and the nature of preferential trade agreements

Preferential Trade Agreements, The Metzler Paradox, and Trade Diversion: An Interpretation of the GATT Article XXIV

Tari¤ Concessions in a Preferential Trade Agreement (PTA) are likely to divert trade from non-participating countries. Consequently, their welfare will deteriorate if the tari¤ rates of the incumbents remain the same. In a general equilibrium framework with multiple goods and multiple regions, this paper clari...es the determinants of the trade diversion. Similarity between the excess supply st...

Preferential Trade Agreements

The Trade Effects of Endogenous Preferential Trade Agreements

Recent work by Anderson and van Wincoop (2003) establishes an empirical modeling strategy which takes full account of the structural, non-(log-)linear impact of trade barriers on trade in new trade theory models. Structural new trade theory models have never been used to evaluate and quantify the role of endogenous preferential trade agreement (PTA) membership for trade in a way which is consis...

Small Countries and Preferential Trade Agreements

This paper examines the welfare implications of preferential trade agreements (PTAs) from the perspective of small countries in the context of a multi-country, general equilibrium model. We calibrate our model to represent one relatively small country and two symmetric big countries. We consider two cases. In one case, the small country is an “innocent bystander,” that is, it is left out of a P...

Preferential Trade Agreements in Asia and the Pacific 157 Preferential Trade Agreements in Asia and the Pacific

Global multilateral trading arrangements offer the best prospect for reducing barriers to trade and achieving the greatest gains from trade liberalization. Preferential trade agreements (PTAs) are a second-best means of achieving trade liberalization in a context where multilateral negotiations proceed slowly. There is considerable variation in the efforts undertaken by PTAs in different parts ...