Does regionalism affect trade liberalization towards non-members?
By A. Estevadeordal, Caroline Freund, Emanuel Ornelas. 2008
279 citations recorded by the source corpus.
We examine the effect of regionalism on unilateral trade liberalization using industry-level data on applied 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.
Subfields: Economics and Econometrics, Finance, Political Science and International Relations
View Paper: https://www.semanticscholar.org/paper/9888e3ca6c67087463aef9c4349a536d328f4159
Citations in the corpus
- Regional trade agreements: blessing or burden? (2009, unknown): “Their findings corroborate those of Estevadeordal et al. (2008) for FTAs: there is strong evidence that preferences have induced a deeper decline in external tariffs.”
- Trade and Investment under Policy Uncertainty: Theory and Firm Evidence (2015, unknown): “Estevadeordal et al (2008) nd that PTAs within Latin America generated reductions in external tari¤s in those Latin American countries. particularly useful way to try to isolate and estimate a TPU reducing role of reciprocal PTAs is to consider cases where it primarily secures pre-existing…”
- Is the Washington Consensus Dead? Growth, Openness, and the Great Liberalization, 1970s–2000s (2013, unknown): “Estevadeordal, Freund, and Ornelas (2008) find that a country that provides preferential tariff-free access in a sector with a 15% MFN tariff is likely to subsequently lower its MFN tariff by 3 percentage points, suggesting that the WTO mechanism encourages countries to set MFN rates close to…”