International sourcing, complementary inputs, and the structure of trade agreements: Deep, shallow, narrow, and wide.
We analyze Preferential Trade Agreement (PTA) formation among a subset of members of a multilateral agreement when imported inputs are complementary to one another. A shallow (focused only on border policies) multilateral agreement does not place countries on the efficiency frontier. Furthermore, no...
| Publicado en: | Economic Inquiry Vol. 60; no. 4; pp. 1782 - 1806 |
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| Autores principales: | , |
| Formato: | Artículo |
| Publicado: |
Wiley-Blackwell
Oct2022
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| Materias: | |
| Acceso en línea: | Ver este registro en EBSCOhost |
| Sumario: | We analyze Preferential Trade Agreement (PTA) formation among a subset of members of a multilateral agreement when imported inputs are complementary to one another. A shallow (focused only on border policies) multilateral agreement does not place countries on the efficiency frontier. Furthermore, no subset of countries will form a shallow PTA. Alternatively, a deep PTA that addresses behind‐the‐border policies increases each country's welfare. This result suggests that the recent proliferation of PTA formation is driven by a need for deep integration. Although these deep PTAs increase welfare over a shallow multilateral agreement the efficiency frontier can only be reached by a deep multilateral agreement that covers both border and behind‐the‐border policies. Whether a deep PTA can generate consensus approval for further multilateral‐deep integration depends on the structure of the PTA and the success of the multilateral‐shallow agreement in lowering tariffs. |
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