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Preferential Trade Agreements as Stumbling Blocks for Multilateral Trade Liberalization: Evidence for the United States

In: Policy Externalities and International Trade Agreements

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  • NUNO LIMÃO

Abstract

Nearly all countries are currently part of preferential trade agreements (PTAs). The importance of PTAs is difficult to overstate, and thus understanding their effects has become a central concern. During the late 1980s and early 1990s multilateral trade negotiations were stalled while the United States and the European Union successfully pursued PTAs. This triggered the question of whether PTAs promote or slow multilateral trade liberalization (MTL) or, as Jagdish Bhagwati (1991) puts it, whether PTAs are a “building block” or a “stumbling block” to MTL. After a decade of theoretical work on that question, no consensus has been reached and there is a surprising absence of empirical evidence on it. We use detailed data on U.S. tariffs to provide the first systematic evidence that the direct effect of U.S. PTAs was to generate a stumbling block to its own MTL…

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  • Nuno Limão, 2018. "Preferential Trade Agreements as Stumbling Blocks for Multilateral Trade Liberalization: Evidence for the United States," World Scientific Book Chapters, in: Policy Externalities and International Trade Agreements, chapter 13, pages 353-371, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789813147980_0013
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    More about this item

    Keywords

    Trade; International Trade; WTO; World Trade Organization; Investment; Globalization; Externality; Policy; Cooperation;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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