Economics and Political Economy of Regional Trade Agreements

Jan Pokrivcak

No 7286, Working Papers from TRADEAG - Agricultural Trade Agreements

Abstract: This paper provides a literature review of selected aspects of economics and political economy of regional trade agreements. From a static perspective regional trade agreements have ambiguous effects on the welfare. Assumption of welfare maximization cannot explain the proliferation of regional trade agreements as it cannot explain extensive use of trade barriers. New political economy approach endogenizes trade policy as well as decisions to form a regional trade agreement. According to major models of political economy, regional trade agreements are likely to be formed when they secure higher protection and trade diversion. Furthermore the literature mostly concludes that integration affects external tariffs.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Pages: 33
Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:ags:tragwp:7286

DOI: 10.22004/ag.econ.7286

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