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Are Trade Blocs Conducive to Free Trade?


José Manuel Campa


University of Navarra - Madrid Campus - IESE Business School; National Bureau of Economic Research (NBER)

Tim Sorenson


Seattle University

IB-94-l

Abstract:     
This paper examines the sustainability of free trade as an equilibrium outcome of an infinitely repeated tariff-setting game in a model of intraindustry trade. The paper shows that in a world consisting of a single dominant country (or "province") and numerous small countries, integration of the latter raises the likelihood of free trade. However, in a world consisting of equally sized integrated trading blocs, free trade is less likely the smaller the number of trading blocs.

JEL Classification: F17

working papers series


Date posted: August 23, 1998  

Suggested Citation

Campa, José Manuel and Sorenson, Tim L., Are Trade Blocs Conducive to Free Trade?. IB-94-l. Available at SSRN: http://ssrn.com/abstract=6823

Contact Information

José Manuel Campa (Contact Author)
University of Navarra - Madrid Campus - IESE Business School ( email )
Camino del Cerro del Aguila 3
Madrid, 28023
Spain
+34 91 357 0809 (Phone)
+34 91 357 2913 (Fax)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Timothy L. Sorenson
Seattle University ( email )
900 Broadway
Seattle, WA 98122
United States
Feedback to SSRN (Beta)


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