with the location effects deriving from trade costs, increasing returns to scale, product dif ferentiation, and … depends negatively on the magnitude of the trade costs. Hence, the model accommodates high levels of intra-industry trade … among countries with similar level of development, as well as high levels of interindustry trade among countries with …

Preferential trade agreements could lead to a reallocation of resources across sectors and countries. Production …, empirical evidence on South-South trade agreements is limited. The purpose of this paper is to fill this gap in the empirical …, and Uruguay over the period 1985-1998. We find that deepened preferential trade liberalization has fostered a reshaping of …