Free trade agreements and the credibility of trade reforms

David Gould

Economic and Financial Policy Review, 1992, issue Q I, 17-27

Abstract: David M. Gould argues that free trade agreements can help developing countries establish the credibility essential to successful trade reform. Credibility, he explains, is necessary if trade reform policies are to entice investment into the economic sectors where the liberalizing country has its greatest comparative advantage. As Gould explains, a free trade agreement enhances the credibility of trade reform policies by providing evidence of a government's long-term commitment to free trade and by discouraging protectionist policies in foreign markets. Gould concludes with an outlook for U.S.-Mexican free trade.

Keywords: Free trade; International trade (search for similar items in EconPapers)
Date: 1992
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