If the costs of going back on previously agreed tari¤ reductions are high relative to the terms of trade gains, then the multilateral liberalization process becomes ‘perpetual’. Perpetual trade liberalization has two unique characteristics. (i) No ‘e¢cient’ tari¤ level exists at which liberalization stops. (ii) Some liberalization must occur in every period. International agreements and institu...

The purpose of the paper is to discuss the effects of WTO accession on policy-making and institutional reforms in transition countries. This is done by looking at the experience of those transition countries which are already Members of the WTO. We start by examining the effect of accession on trade policy and distinguish between the effects of accession negotiations and those of autonomous pol...

In a two sector extension of the Mortensen-Pissarides model of endogenous job destruction, it is shown that trade liberalization increases both job creation and job destruction in the import competing sector and reduces them in the export sector. Since trade liberalization increases unemployment in the import competing sector and reduces it in the export sector, the impact on economywide unempl...

In this study, a dynamically recursive general equilibrium model of Morocco is used to examine alternative trade and domestic policy scenarios involving the implementation of the EU Association Agreement for the period 1998-2012. The model has a detailed treatment of the agricultural and rural economy in Morocco. The results for the trade liberalization scenarios indicate that tariff unificatio...

Lance Taylor is the Director of the Schwartz Center for Economic Policy Analysis (SCEPA) and the Arnhold Professor of International Cooperation and Development at the New School for Social Research. Rudiger von Arnim is a Research Assistant. This SCEPA Policy Note is based on their 2006 paper for Oxfam International titled, “Modeling the Impact of Trade Liberalization: A Critique of Computable ...

Motivated by the non-linear and S-shaped pattern between trade liberalization and capital inflow observed in cross country data, this paper offers a new perspective in understanding the relation between these two. The static model nests Melitz style heterogenous firms with endogenous mark-up within a classical Heckscher-Ohlin style comparative advantage frame work. In this integrated model trad...

There is little disagreement among most economists that countries benefit from trade liberalization. Yet, whether unilateral, multilateral (through the World Trade Organization) or through regional integration agreements (RIAs), trade liberalization has been one of the most controversial economic issues of our time. It is the focus of everyone from politicians to union leaders and anti-globaliz...

Even if trade liberalization results in the aggregate welfare gains over all households, it is possible that the poorest households could lose. Is it possible to undertake the reform in such a way that ensures that the poor will not lose? We illustrate two approaches that might be used to design a trade liberalization in Turkey that meets these equity goals. The first approach uses direct compe...