Arbeitspapier
Flexibility in Trade Bloc Design
A key characteristic of any trade bloc is its “flexibility” – the extent to which it can be modified or augmented by existing members. This paper investigates how prospective trade bloc members value the flexibility of proposed trade agreements in a changing trading environment. We demonstrate that country characteristics as well as the nature of the trade shock influence a nation’s desire for trade bloc flexibility. Our model of endogenous coalition formation yields predictions that are consistent with three stylized facts which characterize regionalism: (i) overlapping trade agreements, (ii) the popularity of free trade areas relative to customs unions and (iii) renegotiation or disbandment of existing trade agreements is rare. Finally, for the first time in the literature, we provide clear predictions about the identity of “hub” and “spoke” trade bloc members when overlapping free trade areas arise in equilibrium.
- Sprache
-
Englisch
- Erschienen in
-
Series: Working paper ; No. 2-2010
- Klassifikation
-
Wirtschaft
Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
Trade Policy; International Trade Organizations
Empirical Studies of Trade
Economic Integration
- Thema
-
Trade agreement flexibility
optimal trade bloc design
regional trade agreements
free trade areas
customs unions
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Melatos, Mark
Dunn, Stephanie
- Ereignis
-
Veröffentlichung
- (wer)
-
Copenhagen Business School (CBS), Department of Economics
- (wo)
-
Frederiksberg
- (wann)
-
2010
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:44 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Melatos, Mark
- Dunn, Stephanie
- Copenhagen Business School (CBS), Department of Economics
Entstanden
- 2010
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