EconPapers    
Economics at your fingertips  
 

Bilateralism and free trade

Sanjeev Goyal and S. Joshi

No EI 9953-/A, Econometric Institute Research Papers from Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute

Abstract: In recent years, there has been a great deal of research on the relative merits of multilateralism and bilateralism and their implications for the nature of the trading regime between countries. In this paper we explore the scope of bilateral free-trade agreements as a foundation for free trade, using recent developments in the theory of strategic network formation. We study a setting with many contries; in each country there are firms, which can sell in the domestic market as well as sell in the foreign markets. The possibility of selling in foreign markets depends on the nature of import tariffs faced by firms. Countries can sign bilateral free-trade agreements which lower import tariffs and thereby facilitate trade. We allow a country to sign any number of bilateral trade agreements. A profile of trade agreements defines the trading regime. We study the nature of trading regimes that are consistent with the incentives of individual countries. Our principal finding is that bilateralism is consistent with global free trade.

Keywords: bilateralism; free trade; strategic network formation (search for similar items in EconPapers)
Date: 1999-12-22
References: Add references at CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
https://repub.eur.nl/pub/1625/feweco19991222152410.pdf (application/pdf)

Related works:
Journal Article: BILATERALISM AND FREE TRADE (2006) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ems:eureir:1625

Access Statistics for this paper

More papers in Econometric Institute Research Papers from Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute Contact information at EDIRC.
Bibliographic data for series maintained by RePub ().

 
Page updated 2019-11-10
Handle: RePEc:ems:eureir:1625