Bilateralism, multilateralism, and the quest for global free trade

Saggi, Kamal; Yildiz, Halis Murat

doi:10.1142/9789813233058_0007

Cited by 33 publications

(68 citation statements)

References 20 publications

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“…Moreover, it is also a stable equilibrium since there is no beneficial self‐enforcing coalition deviation. This argument established the following result, which is consistent with the results from Saggi and Yildiz ():…”

Section: Multilateralism Versus Bilateralismsupporting

confidence: 92%

“…Finally, Saggi and Yildiz () and Saggi et al () show that, for FTAs and CUs, the forces preventing global free trade to be a stable equilibrium are free riding and exclusion incentives, respectively. This is true in this framework as well.…”

Section: Discussion and Extensionsmentioning

confidence: 99%

“…Two most closely related papers are Saggi and Yildiz () and Saggi et al (). In both papers an endogenous PTA formation game is considered: the former focuses on FTAs and the latter focuses on CUs.…”

Section: Literature Reviewmentioning

confidence: 99%

“…First of all, it is easier to analyze the model and build intuition when we have “larger” and “smaller” countries as opposed to arbitrary asymmetry between three countries. Second, in doing so, I follow the structure of Saggi and Yildiz () and Saggi et al () . Therefore, having the same assumptions allows me to directly compare the results derived here with their results.…”

Section: The Modelmentioning

confidence: 99%

“…Following Saggi and Yildiz (), if countries

i

and

j

agree to sign a multilateral trade agreement

(}{, {ij}^{m})

they choose the tariff pair

()(t_{i}^{m}, t_{j}^{m})

to maximize joint welfare:

(t_{i}^{m}, t_{j}^{m}) \equiv A r g m a x [W_{i} ()(, \{{italicij}^{m}\}) + W_{j} ()(, \{{italicij}^{m}\})] .

…”

Section: Multilateralism Versus Bilateralismmentioning

confidence: 99%

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Trade in intermediate inputs, customs unions, and global free trade

Tsirekidze¹

2019

Rev International Economics

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In a three‐country customs union (CU) formation game, I introduce international trade in intermediate inputs and rules of origin (RoO) restrictions. In the case of symmetric countries, I show that as countries become more involved in global supply chains, global free trade is less likely to be a stable equilibrium outcome. RoO can help solve this problem. In the case of asymmetry, depending on the degree of the globalization, free riding (for high degree) or exclusion motive (for low degree) prevents global free trade. Correspondingly, I show that RoO can have helpful or detrimental effects on attaining global free trade.

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Section: Multilateralism Versus Bilateralismsupporting

confidence: 92%

Section: Discussion and Extensionsmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Section: The Modelmentioning

confidence: 99%

“…Following Saggi and Yildiz (), if countries

i

and

j

agree to sign a multilateral trade agreement

(}{, {ij}^{m})

they choose the tariff pair

()(t_{i}^{m}, t_{j}^{m})

to maximize joint welfare:

(t_{i}^{m}, t_{j}^{m}) \equiv A r g m a x [W_{i} ()(, \{{italicij}^{m}\}) + W_{j} ()(, \{{italicij}^{m}\})] .

…”

Section: Multilateralism Versus Bilateralismmentioning

confidence: 99%

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Trade in intermediate inputs, customs unions, and global free trade

Tsirekidze¹

2019

Rev International Economics

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Adopt or not adopt? Mirror clauses and the European Green Deal

Beckman

Ivanic

Jelliffe

et al. 2022

Applied Eco Perspectives Pol

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Mirror clauses have recently been discussed as a way of setting a level playing field for EU farmers in terms of the proposed European Green Deal (EGD) and the proposed reduction in usage of agricultural inputs. This study builds a Nash equilibrium model to determine if regions would implement these reductions to maintain open trade with the European Union. We find that more regions joining the EGD dampen the negative market impacts to the European Union, but we also find that major agricultural producers do not join the European Union in implementing the EGD.

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Revenue, welfare and trade effects of African Continental Free Trade Agreement (AFCFTA) on Nigerian economy

Oyelami

2021

Journal of Public Affairs

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African Continental Free Trade Agreement (AFCFTA) is gradually becoming a reality and there are needs now more than ever to investigate how African countries will thrive under this new trade regime. Based on this consideration, this study seeks to investigate the revenue, welfare and trade effect of ACFTA on Nigerian economy with the Partial Equilibrium Analysis approach using the World Trade Integrated Solution-Single Market Partial Equilibrium Simulation Tool (SMART) model. SMART is a trade simulation model developed by the World Bank and the UNCTAD using trade flow data and tariff data from Trade Analysis and Information Systems, the World Trade Organization Integrated Database and Consolidated Tariff Schedule.The findings from the study show that AFCFTA is a trade creating Free Trade Agreement in Africa and sectors like petrochemical industries, textile and maritime products are the leading trade creating sector in Nigeria. On the other hand, manufacturing activities in the production of sanitary, papers, electronics and automobiles are trade diverting in Nigeria. Overall, the total trade effect in Nigeria is US$ 145 million with an accompanying welfare effect of US$ 13 million. However, the Nigerian government might experience a loss of revenue of US$104 million as a result of tariff removal. Thus, this study concludes that AFCFTA is a trade creating and expanding policy but it comes at a huge loss of revenue on the part of the Nigerian government and this can be ameliorated with the introduction of the more comprehensive consumption tax system.

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Bilateralism, multilateralism, and the quest for global free trade

Cited by 33 publications

References 20 publications

Trade in intermediate inputs, customs unions, and global free trade

Trade in intermediate inputs, customs unions, and global free trade

Adopt or not adopt? Mirror clauses and the European Green Deal

Revenue, welfare and trade effects of African Continental Free Trade Agreement (AFCFTA) on Nigerian economy

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