FTA Trade in Goods Agreements: ‘Entrenching’ the benefits of reciprocal tariff concessions

Title
FTA Trade in Goods Agreements: ‘Entrenching’ the benefits of reciprocal tariff concessions
Authors
Kim, Jong Bum
Issue Date
2007-03
Series/Report no.
KDI Working Paper Series;07-03
Abstract
Despite the proliferation of free trade agreements (FTAs) between nations today, academics and policy makers alike have yet to fully understand what aims do trading nations have when they pursue free trade agreements. This paper provides an explanation that an FTA is a contract through which FTA partners agree to a reciprocal exchange of preferential market access. Trading nations pursue FTAs to avoid exclusionary effects on non-members by securing preferential market access with FTA partners. Review of FTA tariff elimination provisions reveals that FTAs ensure that the expected benefits obtained from tariff elimination or reductions are protected from any future actions by an FTA partner or a third party. The paper concludes with a cautionary observation that the chance of a successful multilateral trade round is further reduced as the exclusionary effects of existing FTAs provide further incentives for non-parties to form new FTAs.
URI
http://archives.kdischool.ac.kr/handle/11125/17102
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