Journal Article

Why a Marketplace Must Not Discriminate

Authors

  • Langhammer
  • R.J.
Publication Date

The paper discusses the pros and cons of a Transatlantic free trade area (TAFTA) against the concept of an informal trade-facilitating marketplace between Europe and the US. It finds considerably more cons expecially since TAFTA would be expected to have ever more discriminatory effects to the detriment of dynamic non-member economies mainly in Asia but also in food-exporting regions. Efficiency-enhancing effects are argued to be achievable under a marketplace concept which does not separate insiders from outsiders. It is also shown that in foreign direct investment (FDI) and FDI-related service trade TAFTA seems redundant as in recent years bilateral capital and trade flows have proven to be buoyant without preferential treatment.

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Info

JEL Classification
F13, F15

Key Words

  • free trade area
  • multilateral trade policy
  • Multilaterale Handelspolitik
  • Regional trading arrangements