Trade Agreements, Trade Liberalization and Economic Growth: A Selective Survey

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Abstract:

Since 1950 there has been a massive liberalization of world trade taking various forms including the formation of free trade areas, customs unions, unilateral reductions in tariff barriers, and reductions in non-tariff barriers to trade. To what extent has this liberalization contributed to the growth performance of countries, and what are the mechanisms through which faster export growth may impact favourably on economic growth? The paper first surveys the empirical literature which seems to show that countries that participate in regional trading agreements (RTAs) fare worse than countries which reduce tariffs unilaterally, and secondly comments on the theoretical literature relating to the mechanisms through which exports affect growth. It is argued that the orthodox neoclassical supply-side argument is only half the story, and much more emphasis needs to be placed on the effect of export performance in relaxing a balance of payments constraint on demand.

Depuis 1950, le commerce mondial a connu une libéralisation considérable qui a pris diverses formes: formation de zones de libre-échange, d’unions douanières, abaissement unilatéral des barrières tarifaires et réduction des barrières non tarifaires. Dans quelle mesure cette libéralisation a-t-elle contribuéà la croissance des pays et par quels mécanismes une expansion plus rapide des exportations peut-elle influencer positivement la croissance économique? Le document passe d’abord en revue le littérature empirique qui semble démontrer que les pays qui participent à des accords commerciaux régionaux (ACR) sont en pire posture que ceux qui abaissent unilatéralement les barrières tarifaires. Le document formule ensuite des observations sur la littérature théorique concernant les mécanismes par lesquels les exportations influent sur la croissance. Il soutient que l’argument néoclassique orthodoxe axé sur l’offre n’explique pas tout, et qu’un accent plus appuyé doit Átre mis sur l’effet que les résultats à l’exportation, en tant que facteur d’atténuation des problèmes de la balance des paiements, peuvent avoir sur la demande.

Document Type: Original Article

DOI: http://dx.doi.org/10.1111/1467-8268.00020

Affiliations: University of Kent at Canterbury, UK

Publication date: December 1, 2000

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