This paper explores the effects of preferential trade agreements (PTAs) on multilateral negotiations using a three-country, noncooperative bargaining model. PTAs are treated as outside options of the multilateral negotiation, with the feature that they continue to negotiate after they form. The...

This paper constructs a model of bilateral trade negotiations in the presence of political risk to demonstrate that unilateral trade liberalization may be an optimal policy for a large country. The political risk takes the form of domestic opposition to trade agreements. Unilateral...