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Welfare Implications of RTAs Within the WTO System in the Presence of FDI

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  • Jung Hur
  • Donghyun Park

Abstract

We examine the welfare implications of the two major types of regional trade agreements (RTAs)—free trade agreements (FTAs) and customs unions (CUs)—within the WTO system in the presence of FDI. To do so, we analyze multilateral tariff cooperation in the context of two types of WTO regimes: a pure WTO regime without any RTAs and a modified WTO regime in which RTAs coexist with the multilateral framework. Our main finding is that in the presence of significant foreign ownership, RTAs within a multilateral system do not raise the national welfare of its members, thereby weakening the incentives of countries to form RTAs. Copyright Kluwer Academic Publishers 2004

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  • Jung Hur & Donghyun Park, 2004. "Welfare Implications of RTAs Within the WTO System in the Presence of FDI," Open Economies Review, Springer, vol. 15(1), pages 87-103, January.
    • Handle: RePEc:kap:openec:v:15:y:2004:i:1:p:87-103
    DOI: 10.1023/B:OPEN.0000009427.83916.68
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    Cited by:

    1. Alberto Chong & Carla Srebot, 2023. "Can Regional Trade Agreements Negatively Impact Primary Schooling?," Open Economies Review, Springer, vol. 34(2), pages 317-339, April.

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