Does regionalism affect trade liberalization towards non-members?
By: Antoni  Estevadeordal, Caroline Freund and Emanuel Ornelas.
Contributors: Freund, Caroline L.; Ornelas, Emanuel.; London School of Economics and Political Science. Centre for Economic Performance.
Series: CEP discussion paper -- no. 868
Publisher: Centre for Economic Performance, London School of Economics and Political Science
Published: 2008
Place of publication: London
Language: eng
Format: Electronic resource
Description: We examine the effect of regionalism on unilateral trade liberalization using industry-level data on applied MFN tariffs and bilateral preferences for ten Latin American countries from 1990 to 2001. We find that preferential tariff reduction in a given sector leads to a reduction in the external (MFN) 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, our results suggest that concerns about a negative effect of preferential liberalization on external trade liberalization are unfounded.
Notes: Title from PDF file (viewed on Oct. 10, 2008).

"May 2008."

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