This paper examines the effect of regionalism on unilateral trade liberalization using industry-level data on applied most-favored nation tariffs and bilateral preferences for ten Latin American countries from 1990 to 2001. The findings show that preferential tariff reduction in a given sector...

We examine the effect of regionalism on unilateral trade liberalization using industry-level data on applied most-favored nation (MFN) tariffs and bilateral preferences for ten Latin American countries from 1990 to 2001. We find that preferential tariff reduction in a given sector leads to a...

Krishna (1998) shows that a bilateral agreement between two countries render a multilateral agreement less attractive if the bilateral agreement is trade diverting. This paper combines Krishna’s model with the empirical approach of Anderson and van Wincoop (2003) to show that the estimated...