eprintid: 17782
rev_number: 19
eprint_status: archive
userid: 600
dir: disk0/00/01/77/82
datestamp: 2009-11-06 17:04:22
lastmod: 2015-07-23 09:37:47
status_changed: 2009-11-06 17:04:22
type: working_paper
metadata_visibility: show
item_issues_count: 0
creators_name: Aghion, P.
creators_name: Antras, P.
creators_name: Helpman, E.
creators_id: PAGHI04
creators_id: 
creators_id: 
title: Negotiating free trade
ispublished: pub
subjects: 12000
divisions: F24
note: Please see http://eprints.ucl.ac.uk/17733/ the version published in the Journal of International Economics
abstract: We develop a dynamic bargaining model in which a leading country endogenously decides whether to sequentially negotiate free trade agreements with subsets of countries or engage in simultaneous multilateral bargaining with all countries at once. We show how the structure of coalition externalities shapes the choice between sequential and multilateral bargaining, and we identify circumstances in which the grand coalition is the equilibrium outcome, leading to worldwide free trade. A model of international trade is then used to illustrate equilibrium outcomes and how they depend on the structure of trade and protection. Global free trade is not achieved when the political-economy motive for protection is sufficiently large. Furthermore, the model generates both building bloc' and stumbling bloc' effects of preferential trade agreements. In particular, we describe an equilibrium in which global free trade is attained only when preferential trade agreements are permitted to form (a building bloc effect), and an equilibrium in which global free trade is attained only when preferential trade agreements are forbidden (a stumbling bloc effect). The analysis identifies conditions under which each of these outcomes emerges.
date: 2004-09
publisher: National Bureau of Economic Research
official_url: http://www.nber.org/papers/w10721
vfaculties: VSHS
oa_status: green
language: eng
primo: open
primo_central: open_green
lyricists_name: Aghion, P
lyricists_id: PAGHI04
full_text_status: public
series: NBER Working Papers
number: 10721
place_of_pub: Cambridge, US
citation:        Aghion, P.;    Antras, P.;    Helpman, E.;      (2004)    Negotiating free trade.                    (NBER Working Papers  10721). National Bureau of Economic Research: Cambridge, US.       Green open access   
 
document_url: https://discovery.ucl.ac.uk/id/eprint/17782/1/17782.pdf