Will the Real “Natural Trading Partner” Please Stand Up?

Maurice Schiff

Journal of Economic Integration, 2001, vol. 16, 245-261

Abstract:

Adherents to the “natural trading partner” hypothesis argue that forming a PTA is more likely to raise welfare if member countries already trade disproportionately with each other. Opponents of the hypothesis claim that the opposite is true: welfare is likely to be higher if member countries trade less with each other. This paper shows that neither analysis is correct and that the “natural trading partner” hypothesis can be rescued if it is redefined in terms of complementarity or substitutability rather than in terms of volume of trade.

Keywords: Regional Integration; Partner Relations with the Rest of the World; Choice of Partner (search for similar items in EconPapers)
JEL-codes: F02 F13 F15 (search for similar items in EconPapers)
Date: 2001
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Citations: View citations in EconPapers (9)

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Working Paper: Will the real"natural trading partner"please stand up? (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0163

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