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Does regionalism affect trade liberalization toward non-members?

Estevadeordal, Antoni, Freund, Caroline and Ornelas, Emanuel (2008) Does regionalism affect trade liberalization toward non-members? Quarterly Journal of Economics, 123 (4). pp. 1531-1575. ISSN 0033-5533

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Abstract

We examine the effect of regionalism on unilateral trade liberalization using industry-level data on applied most-favored nation (MFN) tariffs and bilateral preferences for ten Latin American countries from 1990 to 2001. We find that preferential tariff reduction in a given sector leads to a reduction in the external (MFN) tariff in that sector. External liberalization is greater if preferences are granted to important suppliers. However, these “complementarity effects” of preferential liberalization on external liberalization do not arise in customs unions. Overall, our results suggest that concerns about a negative effect of preferential liberalization on external trade liberalization are unfounded.

Item Type: Article
Official URL: http://qje.oxfordjournals.org/
Additional Information: © 2008 Oxford University Press
Library of Congress subject classification: H Social Sciences > HF Commerce
Journal of Economic Literature Classification System: F - International Economics > F1 - Trade > F13 - Commercial Policy; Protection; Promotion; Trade Negotiations; International Trade Organizations
F - International Economics > F1 - Trade > F15 - Economic Integration
Sets: Research centres and groups > Managerial Economics and Strategy Group
Departments > Management
Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 29 Jun 2011 14:02
URL: http://eprints.lse.ac.uk/37050/

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