Publication Type: Conference Paper/Unpublished Manuscript
Abstract: This paper analyzes the effectiveness of PTAs/FTAs in liberalizing trade in Asia-Pacific countries. Rather than treating PTAs as homogeneous, the paper differentiates them along three important institutional dimensions. In this paper, we focus on the comm

Publication Type: Conference Paper/Unpublished Manuscript
Abstract: This paper analyzes the effectiveness of PTAs/FTAs in liberalizing trade in Asia-Pacific countries. Rather than treating PTAs as homogeneous, the paper differentiates them by the level of credibility encapsulated in their provisions. We focus on the depth of the agreement, in particular its scope and degree of legalization; the the tariff concessions that are concluded through the agreement; and flexibility mechanisms, including escape clauses and provisions for delegation to third parties for dispute resolution. We provide two forms of evidence. The first is a snapshot of tariff barriers in a select group of Asian multilateral PTAs to show that there is a large difference in tariff reductions within PTAs, so that treating them all as equivalent is not the best strategy. Second, we examine dyadic models of trade between Asian countries and the rest of the world to to identify the institutional features of PTAs most strongly associated with a significant boost in trade among the participants. The paper’s findings have important implications for the "dynamic time path" question of whether PTAs are building blocks or stumbling blocks to trade liberalization.