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Why are Trade Agreements more Attractive in the Presence of Foreign Direct Investment? / World Trade Organization.
- Format:
- Book
- Government document
- Author/Creator:
- World Trade Organization.
- Series:
- WTO Working Papers, 25189808 ; no.1998/03.
- WTO Working Papers, 25189808 ; no.1998/03
- Language:
- English
- Subjects (All):
- Economic research and trade policy analysis.
- Local Subjects:
- Economic research and trade policy analysis.
- Physical Description:
- 1 online resource (26 pages).
- Place of Publication:
- Geneva : World Trade Organization, 1998.
- System Details:
- text file
- Summary:
- This paper argues that interests of nationals and owners of home-based foreign capital in the formation of a Trade Agreements (TA) are not antagonistic, except under rather particular assumptions on initial tariffs among potential members. Further, if initial tariffs are endogenously determined through an industry-lobbying process, then TA that would have been immiserising in the absence of Foreign Direct Investment (FDI), may be welfare-enhancing in the presence of foreign-owned firms. The rationale is linked to the effect that the entry of FDI has on the pre-TA tariff, through contributions to the incumbent government. These results may help explain recent integration programs between developed and developing countries.
- Access Restriction:
- Restricted for use by site license.
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