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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...
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to the elimination of tariffs and cuts in non-tariff measures by 25%, is in the range of 1% to 4% of initial consumption …
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We study, theoretically and empirically, how countries choose intra-bloc tariffs and preferential margins when they … to a customs union (where members coordinate external tariffs). Moreover, in customs unions (but not necessarily in free …
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the effects of free trade agreements (FTAs) on external tariffs under a political economy setup. I extend the Grossman and … feasibility of an FTA. I find that the expectation of tariff reductions under endogenous tariffs makes an otherwise feasible FTA … under fixed tariffs become infeasible. However, if domestic import-competing sectors are relatively smaller, an FTA is more …
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