Chichilnisky, Graciela (1996): Trade regimes and GATT: resource-intensive vs. knowledge intensive growth. Published in: Economic Systems merged with Journal of International Comparative Economics , Vol. 20, (1996): pp. 147-181.
Download (5MB) | Preview
Trading blocks can help or hinder the liberalization of world trade. A determining factor is whether trade within the block is organized around traditional comparative advantages, or around economies of scale.
Regional free trade agreements such as NAFTA can be a substitutes for global free trade when they are based on traditional comparative advantages; then each regional market develops market power and incentives to impose tariffs on the rest of the word. Alternatively, regional trade agreements can be complementary to global free trade. This occurs when the blocks are organized around the exploitation of economies of scale and based on knowledge-intensive sectors.
I establish that external economies of scale produce incentives for expanded trade; they can defeat the standard argument for "optimal tariffs" and mitigate another negative feature of trading blocks: their tendency to divert trade from efficient to inefficient sources. The emergence of regional blocks organized around economies of scale can therefore lead to increasingly open international markets. I discuss policy implications for the EU and for free trade in the Americas.
|Item Type:||MPRA Paper|
|Original Title:||Trade regimes and GATT: resource-intensive vs. knowledge intensive growth|
|Keywords:||international trade; global policy; trade policy; trading blocks; economies of scale|
|Subjects:||F - International Economics > F1 - Trade > F13 - Trade Policy; International Trade Organizations
F - International Economics > F5 - International Relations and International Political Economy > F53 - International Agreements and Observance; International Organizations
F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies
|Depositing User:||Graciela Chichilnisky|
|Date Deposited:||28. Apr 2008 02:56|
|Last Modified:||21. Feb 2013 11:45|
AMELUNG T.: "Tropical Deforestation as an International economic Problem", Linz (Austria), Egon Sohmen Foundation, Paper presented at the Conference on Economic Evolution and Environmental Concerns, August 30-31, 1991.
BARBIER E.B. - BURGER J.C. - MARKANDYA A.: «The Economics of Tropical Deforestation, Ambio», vol. 20, n. 2, 1991, pp. 55-8.
BINKLEY C.S. - VINCENT J.R.: "Forest Based Industrialization: a Dynamic Perspective", Washington (D.C.), World Bank, Forest Policy Issues Paper, 1990.
CHICHILNISKY G.: "Terms of Trade and Domestic Distribution: Export Led Growth with Abundant Labor", Journal of Development Economics, n. 8, 1981, pp. 163-92.
CHICHILNISKY G.: "A General Equilibrium Theory of North-South Trade", Part 1: Equilibrium Analysis, Essays in Honor of Kenneth Arrow, Cambridge, Cambridge University Press, 1986, pp. 3-56.
CHICHILNISKY G.: "North-South Trade and the Global Environment" American Economic Review, Vol. 84, No. 4, Sep., 851-874.
CHICHILNISKY G.: "North-South Trade and the Dynamics of Renewable Resources", Columbia University, Working Paper, 1992.
Chichilnisky, G.  "North-South Trade and the Dynamics of Renewable Resources", Columbia University, Working Paper, Structural Change and Economic Dynamics, December, 4 (2): 219-248.
CHICHILNISKY, G. (1992) Trading blocks with external economies of scale, Working Paper, Columbia University, also in "Strategies for Trade Liberalization in the America", in Trade Liberalization in the Western Hemisphere, IDB-ECLAC, 1995, P. 165-188.
CHICHILNISKY G. - HEAL G.: The Evolving International Economy, Cambridge, Cambridge University Press, 1987.
DADZIE K.: "Accelerating the Development Process: Challenges for National and International Policies in the 1990's", Report by the Secretary General of UNCTAD to UNCTAD VIII, New York, United Nations Conference on Trade and Development, 1991.
ETHIER, W.J. (1982) Decreasing costs in international trade and Frank Graham's argument for protection, Econometrica 50/5: 1243-1267.
GRAHAM, F. (1923) Some aspects of protection further considered, Quarterly Journal of Economics 37: 199-227.
HYDE W.F. - NEWMAN D.H.: "Forest Economics in Brief-with Summary Observations for Policy Analysis", Washington (DC), World Bank, First Report on Agricultural and Rural Development, 1991.
JACOBS, J. (1985) Cities and the wealth of nations, Random House.
KENNAN J. - RIEZMAN R.: "Do Big Countries Win Tariff Wars", International Economic Review, vol. 29, n. 1, 1988, pp. 81-5.
KRUGMAN P. - OBSTFELT M.: International Economics, Illinois, Boston, London, Scott, Foresman and Company, 1988.
LERNER A.: "The Symmetry Between Import and Export Taxes", Economica, n. 3, 1936, pp. 306-13.
MATHEWS, RCO (1950) Reciprocal demand and increasing returns, Review of Economic Studies 17: 149-158.
MEADE J.: The Theory of Customs Unions, Amsterdam, North-Holland, 1955.
MEADE J. (1952) The geometry of international trade: George Allen and Unwin, London.
MEADE J. (1971) The theory of indicative planning, Allen and Unwin, London.
METZLER L.: "Tariffs the Terms of Trade and Distribution of National Income", Journal of Political Economy, n. 57, 1949, pp. 1-29.
NICHOLSON W.: Microeconomic Theory, Hinsdale (Ill.), The Dryden Press, 1978.
RIEZMAN R.: "Customs Unions and the Core", Journal of International Economics, n. 19, 1985, pp. 355-65.
VINER J.: The Customs Union Issue, New York, Carnegie Endowment for International Peace.
VINER, J. (1937) Studies in the theory of international trade, Harper, New York.