A free trade area and its neighbor's welfare: A revealed preference approach

Masahiro Endoh, Koichi Hamada, Koji Shimomura

研究成果: Chapter


Purpose - A free trade agreement (FTA) or a preferential trade agreement (PTA) is almost always negotiated without concessions to the non-member countries. This chapter studies the welfare effects of such an FTA or PTA on the non-member countries. Methodology/approach - This chapter employs the revealed preference approach (e.g., Ohyama, 1972; Kemp and Wan, 1976 Deardorff, 1980). Findings - Under such conditions that the initial levels of the tariffs are small, or that the effects on production efficiency dominate the effects on tariff revenue, or that the tax-subsidy scheme proposed by Bhagwati, Ramaswami, and Srinivasan is employed in all the countries, the formation of a PTA without any tariff concessions to the outside countries will harm the welfare of the outside countries. Practical implications - In order to make a PTA beneficial not only for member countries but for the rest of the world, member countries need to grant some tariff concessions to the imports from the non-member countries.

ホスト出版物のタイトルGlobalization and Emerging Issues in Trade Theory and Policy
出版社Emerald Group Publishing Ltd.
出版ステータスPublished - 2008 1月 1


名前Frontiers of Economics and Globalization

ASJC Scopus subject areas

  • 経済学、計量経済学および金融学(全般)


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