Economics, Econometrics and Finance
3 years ago

Tariff bindings shape global trade agreements, paving the way for free trade.

SSRN Electronic Journal
Tariff Bindings and the Dynamic Formation of Preferential Trade Agreements
James Lake, Moïse Nken, Halis Murat Yildiz

Paper Summary

Related papers

Economics, Econometrics and Finance
4 years ago

Free Trade Agreements Slash External Tariffs, Boosting Global Economic Integration

Trade Impact
International Law
State Aid
Economics, Econometrics and Finance
4 years ago

ASEAN Trade Deal Boosts Regional Economies, Reshapes Global Commerce

Trade Impact
International Law
Foreign Aid
Economics, Econometrics and Finance
4 years ago

Tariff bindings shape global trade agreements, paving the way for free trade.

Trade Impact
Market Dynamics
Tax Avoidance

Multilateral tariff binding liberalization affects the formation of Preferential Trade Agreements (PTAs). High bindings lead to Free Trade Agreement (FTA) expansion constraints due to free riding incentives, while low bindings lead to exclusion incentives. Initially, tariff binding liberalization results in Custom Union (CU) formation, hindering global free trade. However, further liberalization leads to FTA formation, promoting global free trade. This research sheds light on the debate between FTAs and CUs.