IDEAS home Printed from https://ideas.repec.org/a/ejn/ejefjr/v6y2018i3p52-58.html
   My bibliography  Save this article

From Bilateral Approach To Global Free Trade

Author

Listed:
  • Ali Yavuz Polat

    (Abdullah Gul University, Turkey)

Abstract

Previous literature questions whether it is possible to reach global free trade from a bilateral approach, and concludes that bilateral trade negotiations cannot guarantee global free trade. But his result is sensitive to the assumption on the existence of only one large country that has the enforcement power. We develop a model that has two large countries where they may interact/cooperate or compete. Assuming that the two large countries are in a Bertrand competition, bilateral approach still cannot lead to global free trade. On the other hand, we found that the outcome is the efficient allocation. This is due to the fact that all countries that have valuation more than the cost of the free trade are being offered free trade. Moreover, multilateral negotiations are found to be equivalent to bilateral case.

Suggested Citation

  • Ali Yavuz Polat, 2018. "From Bilateral Approach To Global Free Trade," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 6(3), pages 52-58.
    • Handle: RePEc:ejn:ejefjr:v:6:y:2018:i:3:p:52-58
    as

    Download full text from publisher

    File URL: https://eurasianpublications.com/wp-content/uploads/2021/02/EJEF-6.3.4.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Wilfred J. Ethier, 1998. "Regionalism in a Multilateral World," Journal of Political Economy, University of Chicago Press, vol. 106(6), pages 1214-1245, December.
    2. Baldwin, Richard & Jaimovich, Dany, 2012. "Are Free Trade Agreements contagious?," Journal of International Economics, Elsevier, vol. 88(1), pages 1-16.
    3. Bulow, Jeremy & Roberts, John, 1989. "The Simple Economics of Optimal Auctions," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1060-1090, October.
    4. Ludema, Rodney D. & Mayda, Anna Maria, 2009. "Do countries free ride on MFN?," Journal of International Economics, Elsevier, vol. 77(2), pages 137-150, April.
    5. Bagwell, Kyle & Staiger, Robert W., 2004. "Multilateral trade negotiations, bilateral opportunism and the rules of GATT/WTO," Journal of International Economics, Elsevier, vol. 63(1), pages 1-29, May.
    6. McCalman, Phillip, 2002. "Multi-lateral trade negotiations and the Most Favored Nation clause," Journal of International Economics, Elsevier, vol. 57(1), pages 151-176, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Katerina Gradeva & Dany Jaimovich, 2014. "Multilateral determinants of regionalism revisited," The Review of International Organizations, Springer, vol. 9(2), pages 163-203, June.
    2. Maggi, Giovanni, 2014. "International Trade Agreements," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 317-390, Elsevier.
    3. Kyle Bagwell & Chad P. Bown & Robert W. Staiger, 2016. "Is the WTO Passé?," Journal of Economic Literature, American Economic Association, vol. 54(4), pages 1125-1231, December.
    4. Saggi, Kamal & Wong, Woan Foong & Yildiz, Halis Murat, 2017. "Preferential Trade Agreements and Rules of the Multilateral Trading System," MPRA Paper 76330, University Library of Munich, Germany.
    5. Cornelius Hirsch & Harald Oberhofer, 2017. "Bilateral Trade Agreements and Trade Distortions in Agricultural Markets," Department of Economics Working Papers wuwp240, Vienna University of Economics and Business, Department of Economics.
    6. Kamal Saggi & Woan Foong Wong & Halis Murat Yildiz, 2022. "The role of non‐discrimination in a world of discriminatory preferential trade agreements," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 55(1), pages 174-212, February.
    7. Juyoung Cheong & Do Won Kwak & Kam Ki Tang, 2015. "Can Trade Agreements Curtail Trade Creation and Prevent Trade Diversion?," Review of International Economics, Wiley Blackwell, vol. 23(2), pages 221-238, May.
    8. Horn, Henrik & Mavroidis, Petros C., 2001. "Economic and legal aspects of the Most-Favored-Nation clause," European Journal of Political Economy, Elsevier, vol. 17(2), pages 233-279, June.
    9. Bagwell,K. & Staiger,R.W., 2000. "GATT-think," Working papers 19, Wisconsin Madison - Social Systems.
    10. Ludema, Rodney D. & Mayda, Anna Maria, 2009. "Do countries free ride on MFN?," Journal of International Economics, Elsevier, vol. 77(2), pages 137-150, April.
    11. McCalman, Phillip, 2010. "Trade policy in a "super size me" world," Journal of International Economics, Elsevier, vol. 81(2), pages 206-218, July.
    12. Bagwell, Kyle & Staiger, Robert W., 2010. "Backward stealing and forward manipulation in the WTO," Journal of International Economics, Elsevier, vol. 82(1), pages 49-62, September.
    13. repec:wsr:wpaper:y:2017:i:176 is not listed on IDEAS
    14. Aghion, Philippe & Antras, Pol & Helpman, Elhanan, 2007. "Negotiating free trade," Journal of International Economics, Elsevier, vol. 73(1), pages 1-30, September.
    15. Kamal Saggi & Faruk Sengul, 2018. "On the emergence of an MFN club: equal treatment in an unequal world," World Scientific Book Chapters, in: Kamal Saggi (ed.), Economic Analysis of the Rules and Regulations of the World Trade Organization, chapter 4, pages 76-108, World Scientific Publishing Co. Pte. Ltd..
    16. NAGEL Daniel, 2017. "The Fate of 21st Century Multilateralism," European Journal of Interdisciplinary Studies, Bucharest Economic Academy, issue 02, June.
    17. Kamal Saggi, 2018. "The MFN clause, welfare, and multilateral cooperation between countries of unequal size," World Scientific Book Chapters, in: Kamal Saggi (ed.), Economic Analysis of the Rules and Regulations of the World Trade Organization, chapter 14, pages 312-323, World Scientific Publishing Co. Pte. Ltd..
    18. Nuno Limão, 2016. "Preferential Trade Agreements," NBER Working Papers 22138, National Bureau of Economic Research, Inc.
    19. Wisarut Suwanprasert, 2020. "The role of the most favored nation principle of the GATT/WTO in the New Trade model," Review of International Economics, Wiley Blackwell, vol. 28(3), pages 760-798, August.
    20. Huang, Qiuyue & Li, Zhiyuan, 2024. "Trade and peace: The WTO case," China Economic Review, Elsevier, vol. 83(C).
    21. Rotunno, Lorenzo, 2016. "Political stability and trade agreements: Evidence for ‘endgame FTAs’," European Journal of Political Economy, Elsevier, vol. 45(C), pages 133-148.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ejn:ejefjr:v:6:y:2018:i:3:p:52-58. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Esra Barakli (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.