<abstract xmlns="http://www.w3.org/1999/xhtml"><p>We explore the pro-competitive effects of trade policies in a model where a competitive fringe of domestic firms compete with a foreign duopoly exporting vertically differentiated goods. We show that discriminatory nonuniform tariff policies are preferred over the Most Favored Nation (MFN) clause because, besides extracting rents from foreign firms, they foster competition in the market. Regional Trading Agreements (RTAs), which favor members relative to non-members, are examples of such nonuniform tariff policies.</p></abstract>

We explore the pro-competitive effects of trade policies in a model where a competitive fringe of domestic firms compete with a foreign duopoly exporting vertically differentiated goods. We show that discriminatory nonuniform tariff policies are preferred over the Most Favored Nation (MFN) clause because, besides extracting rents from foreign firms, they foster competition in the market. Regional Trading Agreements (RTAs), which favor members relative to non-members, are examples of such nonuniform tariff policies.

On the Pro-competitive Effects of Regional Trading Agreements

VU University Amsterdam and University of Groningen

Acta Universitatis Sapientiae, Economics and Business

This article is distributed under the terms of the Creative Commons Attribution Non-Commercial License, which permits unrestricted non-commercial use, distribution, and reproduction in any medium, provided the original work is properly cited.

{"article-title":"On the Pro-competitive Effects of Regional Trading Agreements"}

We explore the pro-competitive effects of trade policies in a model where a competitive fringe of domestic firms compete with a foreign duopoly exporting...

On the Pro-competitive Effects of Regional Trading Agreements

Published Online: May 30, 2014

Page range: 5 - 22

DOI: https://doi.org/10.2478/auseb-2014-0001

© 2014

This article is distributed under the terms of the Creative Commons Attribution Non-Commercial License, which permits unrestricted non-commercial use, distribution, and reproduction in any medium, provided the original work is properly cited.