Are Preferential Trade Agreements with Non-trade Objectives a Stumbling Block for Multilateral Liberalization?
          
                  Nuno Limão
      
  
, 
            3
      (    
                  74
      
  
)
            Review of Economic Studies
      
            821-855
      
            July
      
            2007
      
            restud_rr2.pdf722.7 KB
          
                          
      
  
  Abstract
              In many preferential trade agreements (PTAs) countries exchange not only reductions in trade barriers but also cooperation in non-trade issues such as labor and environmental standards, intellectual property, etc. We provide a model of PTAs motivated by cooperation in non-trade issues and analyze its implications for global free trade and welfare. We find that such PTAs increase the cost of multilateral tariff reductions and thus cause a stumbling block to global free trade.
