Do South-South Preferential Trade Agreements Undermine the Prospects for Multilateral Free Trade?

Paul Missios and Halis Yildiz

No 45, Working Papers from Toronto Metropolitan University, Department of Economics

Abstract: Due to trade diversion, there has been concerns expressed over the proliferation of preferential trade agreements (PTAs) between South countries. In this paper, we compare welfare across the various forms of bilateral free trade agreements (FTAs) and customs unions (CUs) and examine their implications for the stability of multilateral free trade. While North-North PTAs tend to yield higher welfare, we fi?nd certain cases where South-South agreements are more likely to lead to global free trade than North-North or North-South agreements, but other cases where multilateral cooperation over free trade is the least likely under South-South agreements. We also examine how the expansion of existing agreements, or the combination of separate agreements, affects the potential for free trade.

Keywords: trade agreements; free trade; development; tariffs (search for similar items in EconPapers)
JEL-codes: F12 F13 O19 O24 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2013-07, Revised 2015-02
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (1)

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https://www.arts.ryerson.ca/economics/repec/pdfs/wp045.pdf First version, 2013 (application/pdf)
https://www.arts.ryerson.ca/economics/repec/pdfs/wp045R.pdf Revised version, 2015 (application/pdf)
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Journal Article: Do SouthSouth preferential trade agreements undermine the prospects for multilateral free trade? (2017)
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