Why a market place must not discriminate: The case against a US-EU free trade agreement

Rolf Langhammer

No 1407, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: The paper discusses the pros and cons of a Transatlantic free trade area (TAFTA) against the concept of an informal trade-facilitating marketplace between Europe and the US. It finds considerably more cons expecially since TAFTA would be expected to have ever more discriminatory effects to the detriment of dynamic non-member economies mainly in Asia but also in food-exporting regions. Efficiency-enhancing effects are argued to be achievable under a marketplace concept which does not separate insiders from outsiders. It is also shown that in foreign direct investment (FDI) and FDI-related service trade TAFTA seems redundant as in recent years bilateral capital and trade flows have proven to be buoyant without preferential treatment.

Keywords: Multilateral trade policy; Free trade area; Regional trading arrangement (search for similar items in EconPapers)
JEL-codes: F13 F15 (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:1407

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