This paper presents one channel through which the creation of a Preferential Trading Arrangement (PTA) can undermine multilateral trade liberalization. Using a modified Meade model, it is shown how a PTA shrinks the export sectors in the excluded countries. This in turn leads to an expansion of...

The creation or the expansion of a Preferential Trade Arrangement (PTA), in general, hurts the non-member countries because of trade diversion. This could increase the pressure for protection in the non-member countries and, ultimately, worsen the member countries' market access in those...

This paper uses a differentiated-good model to study the welfare effects of Regional Integration Arrangements (RIAs). It shows, on the one hand, that an expansion of a regional grouping always unambiguously hurt those that are left out even if the external tariffs of the RIA remain constant. On...

In a sequential Computable General Equilibrium analysis, we investigate the likely effects of the EU-South Africa Free Trade agreement (FTA), with a special emphasis on South Africa's growth prospects. We find that the FTA increases South African output and welfare. We note, however, that the...

Will the current wave of regional integration arrangements lead to the world being divided into competing inward-looking trading blocs? Or will it lead to a more open multilateral trading system? Using a multicountry political economy model, and after having shown that global free trade is...

The paper studies the effects of regional integration on the incentives of members and non-members to undertake multilateral trade liberalization. Using a three-country political economy model with imperfect competition, it shows how regionalism can undermine support for multilateralism....