The slow pace of multilateral negotiations has given a greater impetus to regional trade arrangements (RTA) as countries are eager to take advantage of welfare enhancing trade creation effect of trade liberalization. At the same time, this approach raises concerns as due their discriminatory...

Liberalization increases competitive pressures on domestic firms, creating incentives for reducing costs of production through technological progress. Through this channel, backward countries get a chance to narrow the technological gap with advanced countries. In this paper, the case of...