This chapter provides a formal analysis of the economic welfare effects for large and small partners to free trade agreements. Michaely (1998) has demonstrated that large country welfare is U-shaped in the small country's size. I derive the welfare for the large country for all possible small...

This paper reviews the most significant recent developments in the theory of trade agreements. The paper offers an integrated approach to evaluating trade agreements, and uses the approach to present results on preferential and multilateral trade agreements. The paper identifies also several...

This article argues that the terms-of-trade and volume-of-trade taxonomy from the theory of tariffs constitutes an attractive alternative to Viner's trade diversion and creation effects for the analysis of preferential trading arrangements. In applications of the alternative approach, the...