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Why are there so many Preferential Trade Areas? A Political Economy Perspective

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  • Jaleel Ahmad

Abstract

This paper investigates the causes of the phenomenal growth of preferential trade areas (PTAs) in the world economy during recent decades. A political economy analysis suggests that the attraction of PTAs may be due, in large parts, to (a) a preference for manufacturing industry, rather than merely the gross domestic product (GDP), and (b) the prospect of greater foreign direct investments, in countries forming or joining a PTA.

Suggested Citation

  • Jaleel Ahmad, 2008. "Why are there so many Preferential Trade Areas? A Political Economy Perspective," Global Economic Review, Taylor & Francis Journals, vol. 37(1), pages 51-62.
    • Handle: RePEc:taf:glecrv:v:37:y:2008:i:1:p:51-62
    DOI: 10.1080/12265080801911915
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    References listed on IDEAS

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    1. Louis T. Wells, Jr., 1992. "Conflict or Indifference: US Multinationals in a World of Regional Trading Blocs," OECD Development Centre Working Papers 57, OECD Publishing.
    2. Magee,Stephen P. & Brock,William A. & Young,Leslie, 1989. "Black Hole Tariffs and Endogenous Policy Theory," Cambridge Books, Cambridge University Press, number 9780521377003, September.
    3. Caroline L. Freund & John McLaren, 1999. "On the dynamics of trade diversion: evidence from four trade blocs," International Finance Discussion Papers 637, Board of Governors of the Federal Reserve System (U.S.).
    4. Jagdish N. Bhagwati, 1982. "Import Competition and Response," NBER Books, National Bureau of Economic Research, Inc, number bhag82-1.
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