Cadot, Olivier; De Melo, Jaime; Olarreaga, Marcelo - 1998 - Manuscript date: June, 1998
Using the influence-driven approach to endogenous trade-policy determination, we show how a free-trade agreement (FTA) with rules of origin can work as a device to compensate losers from trade liberalization. The FTA constructed in this paper is characterized by external tariff structures that...