Can Bilateral Trade Agreements Help to Induce Free Trade?

In this paper a very simple question is asked. Does the fact that trading blocs can form bilateral trade agreements make free trade less likely to occur? The answer is that it depends on the size distribution of the trading blocs. When there is one large trading block along with some smaller ones, t...

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Bibliographic Details
Published in:The Canadian journal of economics 1999-05, Vol.32 (3), p.751-766
Main Author: Riezman, Raymond
Format: Article
Language:English
Subjects:
Bilateralism
Customs unions
Economic models
Endowments
Equilibrium
Free trade
Free trade & protection
Free trade zones
International economic relations
Multilateralism
Nash equilibrium
Regional trade pacts
Studies
Tariffs
Trade agreements
Trade models
World trade
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Summary:In this paper a very simple question is asked. Does the fact that trading blocs can form bilateral trade agreements make free trade less likely to occur? The answer is that it depends on the size distribution of the trading blocs. When there is one large trading block along with some smaller ones, then bilateral trade agreements can facilitate the attainment of free trade. If trading blocs are of roughly equivalent size, then bilateral trade agreements allow groups of trading blocs to more effectively monopolize world trade, in which case they may make free trade less likely. JEL Classification: F15, F13 /// Est-ce que des accords commerciaux bilatéraux peuvent aider à enclencher le libre échange? Ce mémoire pose une question très simple Est-ce que le fait que les blocs économiques peuvent signer des accords bilatéraux rend le libre échange moins probable? La réponse est que cela dépend de la distribution de la taille des blocs. Quand il y a un gros bloc et plusieurs petits, alors les accords commerciaux bilatéraux peuvent faciliter l'accès au libre échange. Si le blocs sont à peu près de même taille, alors les accords commerciaux bilatéraux permettent à des groupes de blocs de mieux monopoliser le commerce mondial et dans ce cas ces accords rendent le libre échange moins probable.
ISSN:0008-4085
1540-5982
DOI:10.2307/136448