蝌蚪网

This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. 蝌蚪网
  3. 蝌蚪网 Journal: Microeconomics
  4. February 2013
  5. On the Relationship between Preferential and Multilateral Trade Liberalization: The Case of Customs Unions

蝌蚪网 Journal:
Microeconomics

ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)

On the Relationship between Preferential and Multilateral Trade Liberalization: The Case of Customs Unions

  • Kamal Saggi
  • Alan Woodland
  • Halis Murat Yildiz
蝌蚪网 Journal: Microeconomics
vol. 5, no. 1, February 2013
(pp. 63–99)
Download Full Text PDF

Abstract

This paper compares equilibrium outcomes of two games of trade liberalization. In the Bilateralism game, countries choose whether to liberalize trade preferentially via a customs union (CU ), multilaterally, or not at all. The Multilateralism game is a restricted version of the Bilateralism game in that countries cannot form CUs and can only undertake non-discriminatory trade liberalization. When countries have symmetric endowments, global free trade is the only stable equilibrium of both games. Allowing for endowment asymmetry, we isolate circumstances where the option to form CUs helps further the cause of multilateral liberalization as well as where it does not. (JEL F12, F13)

Citation

Saggi, Kamal, Alan Woodland, and Halis Murat Yildiz. 2013. "On the Relationship between Preferential and Multilateral Trade Liberalization: The Case of Customs Unions." 蝌蚪网 Journal: Microeconomics 5 (1): 63–99. DOI: 10.1257/mic.5.1.63

JEL Classification

  • F12 Models of Trade with Imperfect Competition and Scale Economies
  • F13 Trade Policy; International Trade Organizations