We study, theoretically and empirically, how countries choose intra-bloc tariffs and preferential margins when they form Preferential Trade Agreements (PTAs). Our model indicates that countries should set systematically lower preferential margins when the bloc takes the form of a free trade area...

The proposed Transatlantic Trade and Investment Partnership (TTIP) between the European Union and the United States of America would be the largest preferential trade agreement in the world. Encompassing almost half of world GDP, it will have strong economic effects on Germany. In this paper, we...

This paper explores the economic impacts of preferential trade agreements, conditional on their level of ambition. We cluster 278 agreements, encompassing 910 provisions over 18 policy areas and estimate the trade elasticity for the different clusters. We then use these elasticities in a series...

Geography, economic size, or common history, help predicting signed regional trade agreements (RTAs). However, not all signed RTAs are "natural" according to economic determinants. En-dogeneity and general equilibrium effects of RTAS are the two mechanisms addressed in this paper. We estimate...

Regional trade agreements have proliferated in the past two decades while multilateral trade negotiations have stalled. Both these agreements are governed by the WTO and have to abide by the non-discriminatory (Most-Favored Nation, MFN) clause to varying degrees-regional agreements to a lesser...

We show that multilateral tariff binding liberalization substantially impacts the nature and extent of Preferential Trade Agreement (PTA) formation. First, it shapes the nature of forces constraining expansion of Free Trade Agreements (FTAs). The constraining force is a free riding incentive of...

This paper sets up a model of trade, in which two countries with differing levels of technology specialize in the production of sub-stages of the global value chain. In the open economy, the technologically backward country exports intermediates in exchange for imports of a homogeneous...

We study the procompetitive effects of trade policies against a foreign oligopoly in a model of vertical product differentiation. We show that a uniform tariff policy like the Most Favored Nation (MFN) clause is always welfare superior to free trade because of a pure rent-extraction effect....

Japan and India signed the much-awaited Comprehensive Economic Partnership Agreement (CEPA) on 16th February 2011. The CEPA will eliminate tariff on goods that account for 94% of their two way trade over ten years and will boost bilateral trade and investment. Indian exports which were subject...