Does Regionalism Affect Trade Liberalization toward Non-Members?
This paper examines the effect of regionalism on unilateral trade liberalization using industry-level data on applied most-favored nation tariffs and bilateral preferences for ten Latin American countries from 1990 to 2001. The findings show that p...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2008/10/9934137/regionalism-affect-trade-liberalization-toward-non-members http://hdl.handle.net/10986/6936 |
| Summary: | This paper examines the effect of
regionalism on unilateral trade liberalization using
industry-level data on applied most-favored nation tariffs
and bilateral preferences for ten Latin American countries
from 1990 to 2001. The findings show that preferential
tariff reduction in a given sector leads to a reduction in
the external (most-favored nation) tariff in that sector.
External liberalization is greater if preferences are
granted to important suppliers. However, these
"complementarity effects" of preferential
liberalization on external liberalization do not arise in
customs unions. Overall, the results suggest that concerns
about a negative effect of preferential liberalization on
external trade liberalization are unfounded. |
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