Preferential Trade Agreements as Stumbling Blocks for Multilateral Trade Liberalization: Evidence for the Us

34 Pages Posted: 25 May 2005

See all articles by Nuno Limão

Nuno Limão

University of Maryland - Department of Economics

Date Written: January 2005

Abstract

Most countries are members of preferential trade agreements (PTAs). The effect of these agreements has attracted much interest and raised the question of whether PTAs promote or slow down multilateral trade liberalization, i.e., whether they are a 'building block' or a 'stumbling block' to multilateral liberalization. Despite this long-standing concern with PTAs and the lack of theoretical consensus there is no systematic evidence on whether they are actually a stumbling block to multilateral liberalization. We use detailed data on US tariff reductions during the most recent multilateral trade round to provide the first systematic evidence that the US's PTAs were a stumbling block to its multilateral liberalization. We also provide evidence of reciprocity in multilateral tariff reductions that amplify the stumbling block effect.

Keywords: Preferential trade agreements, multilateral trade negotiations, MFN tariff concessions, reciprocity

JEL Classification: D78, F13, F14, F15

Suggested Citation

Limão, Nuno, Preferential Trade Agreements as Stumbling Blocks for Multilateral Trade Liberalization: Evidence for the Us (January 2005). CEPR Discussion Paper No. 4884. Available at SSRN: https://ssrn.com/abstract=729124

Nuno Limão (Contact Author)

University of Maryland - Department of Economics ( email )

College Park, MD 20742
United States
301-405-7842 (Phone)
301-405 3542 (Fax)

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