Preferential Trading Arrangements as Strategic Positioning

Daniel Seidmann

No 2006-09, Discussion Papers from The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham

Abstract: We analyze a three-country model of trade negotiations in which countries can form bilateral free trade areas, customs unions or a trilateral preferential trading arrangement, and can continue negotiating after reaching an agreement. In contrast to the literature on multilateral bargaining, the set of agreements can form a (nonpartitional) network; while in contrast to the network literature, players can reach multilateral agreements. We show that patient enough countries reach bilateral arrangements if and only if insiders gain more than outsiders; and we characterize conditions under which a hub and spoke pattern emerges. We also use variants on the model to explain why a US commitment not to bargain bilaterally sustained progress at GATT negotiations; and the rarity of open access preferential trading arrangements.

Date: 2006-04
References: Add references at CitEc
Citations: View citations in EconPapers (5)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Preferential trading arrangements as strategic positioning (2009)
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:not:notcdx:2006-09

Access Statistics for this paper

More papers in Discussion Papers from The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham School of Economics University of Nottingham University Park Nottingham NG7 2RD. Contact information at EDIRC.
Bibliographic data for series maintained by Jose V Guinot Saporta ().