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US Free Trade Agreements and Policy Flexibility: Will New Rules Hinder Industrialisation?

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Free trade agreements have become a central feature of many developing countries' growth strategies, encouraged by an evaluation literature that quantifies their positive impact on trade. However, trade gains come at the cost of policy space, particularly when the partner is a developed country, and though this cost has been acknowledged, its impact has not been explored. This article seeks to address this oversight by detailing changes to the domestic policy environment from the participation of a developing country in a US-anchored FTA and evaluating whether the resulting policy regime is flexible enough to enable a developmental government to pursue activities associated with industrialisation.
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Keywords: Free trade agreement; economic development; industrialisation

Document Type: Research Article

Affiliations: Research Fellow, UNU-WIDER, Katajanokanlaituri 6b, Helsinki FI-00160, Finland ( )., Email: [email protected]

Publication date: July 1, 2010

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