Preferential trade agreements (PTAs) are characterized by liberalization with respect to only a few partners and thus they can potentially clash with, and retard multilateral trade liberalization (MTL). Yet there is almost no systematic evidence on whether the numerous existing PTAs actually affect MTL. We provide a model showing that PTAs hinder MTL unless they entail accession to a customs union with internal transfers.
The Clash of Liberalizations: Preferential vs. Multilateral Trade Liberalization in the European UnionBaybars Karacaovali and Nuno Limão ,
2( 74 )
Journal of International Economics
The Clash of Liberalizations: Preferential vs. Multilateral Trade Liberalization in the European Union