Feasible multilateralism and the effects of regionalism

Resumo

Recent research has underlined the efficiency of the GATT/WTO rules from the standpoint of politically motivated governments, emphasizing that the current multilateral rules are capable of delivering a politically efficient equilibrium. Such an equilibrium is, however, economically inef- ficient. Global free trade, in particular, is generally unattainable even in a fully cooperative world, provided that governments have distributive motivations. In such a context, we show that regional trade agreements can help move the world towards a welfare superior equilibrium. The reason is that, as members of regional trade agreements lower trade barriers against one another, they are induced to reduce their multilateral tariffs as well. Once we account for these endogenous changes–and only then–we find that regionalism can raise world welfare even in a fully cooperative (but political) world. We also find, however, that members are likely to gain 'too much' from regional integration, thereby harming outsiders.

Ficha do documento

Tipo

Estudo

Ano

2004

Instituição

Escola de Pós-Graduação em Economia da FGV

Fonte

Repositório da FGV

Idioma

Inglês

Acesso

Não informado

Identificador

oai:repositorio.fgv.br:10438/12600

Temas

EconomiaDesenvolvimento Regional

Palavras-chave

Multilateral cooperationTrade agreementsEconomic efficiencyRegionalismEconomiaTratados comerciaisPolítica comercialIntegração econômica internacional