Spaghetti Regionalism

20 Pages Posted: 17 Jan 2001

See all articles by Caroline L. Freund

Caroline L. Freund

World Bank - Macro, Trade and Investment

Date Written: September 2000

Abstract

This paper examines the welfare implications of multiple free trade agreements in a model of imperfect competition. We show that free trade is the unique Nash equilibrium under the simple rule that any two countries can form a bilateral free trade agreement. Specifically, a country is always better off forming a bilateral trade agreement with every other country, irrespective of previous agreements. This suggests that each new preferential free trade agreement may be a step towards multilateral free trade.

Keywords: trade, regionalism, and imperfect competition

Suggested Citation

Freund, Caroline L., Spaghetti Regionalism (September 2000). Available at SSRN: https://ssrn.com/abstract=244072 or http://dx.doi.org/10.2139/ssrn.244072

Caroline L. Freund (Contact Author)

World Bank - Macro, Trade and Investment ( email )

1818 H Street, N.W.
MC3-329
Washington, DC 20433
United States
(202)458-0847 (Phone)

HOME PAGE: http://econ.worldbank.org/staff/cfreund

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
249
Abstract Views
1,660
Rank
253,108
PlumX Metrics