The new regionalism: trade liberalization or insurance?

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Abstract:

Several of the recently negotiated regional trade agreements contain significantly fewer concessions by the large countries to smaller countries than vice versa. In this paper, we compute post-retaliation Nash tariffs by region under various regional trade arrangements using a calibrated numerical general equilibrium model of world trade. Regional agreements constrain strategic behaviour within each trading area, and (in the Customs Union case) enhance it outside the bloc. Results confirm the intuition that without side payments large-small country regional agreements (such as the Canada-U.S. agreement) would not have occurred.

Le nouveau régionalisme: libéralisation du commerce ou assurance? Dans plusieurs des accords de libre échange régionaux négociés récemment, les grands pays accordent beaucoup moins de concessions aux petits pays que les petits aux grands. Dans cet article, les auteurs mesurent, à l'aide d'un modèle numérisé d'´equilibre général du commerce mondial, les droits de douane à la Nash après ajustements réciproques. Il semble que les accords régionaux contraignent les comportements stratégiques dans chaque bloc, et (dans le cas de l'union douanière) renforcent les comportements stratégiques hors du bloc. Ces résultats confirment l'intuition qui suggère que, sans ces arrangements parallèles, les accords entre grands et petits pays (comme l'accord U.S.A.-Canada) ne se matérialiseraient pas.

Document Type: Research Article

DOI: http://dx.doi.org/10.1111/0008-4085.00001

Affiliations: 1: University of Warwick, 2: University of Western Ontario, University of Warwick, and NBER

Publication date: February 1, 2000

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