Joining an Existing Regional Trade Agreement from the Perspective of a Small Open Economy: Chile's Accession to NAFTA and MERCOSUR

Valdés, Alberto

doi:10.2307/1243363

Cited by 5 publications

(4 citation statements)

References 1 publication

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“…But if firms do not comply, because there is a strong incentive to disregard higher environmental standards, enforcing compliance with these regulatory policies necessitates increased governmental efforts (Gordon and Hafer 2005, 2007). Moreover, regulatory legislation can lower incentives for (foreign direct) investment (Valds 1995), as it influences comparative advantages in pollutive production.…”

Section: The Modelmentioning

confidence: 99%

Changing Economic Openness for Environmental Policy Convergence: When Can Bilateral Trade Agreements Induce Convergence of Environmental Regulation?

Bechtel

Tosun

2009

International Studies Quarterly

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Citizens’ concerns about (international) environmental protection standards are of increasing importance to governments in industrially advanced, high‐regulating countries. In almost any proposal for a trade agreement, countries with low environmental regulation standards are required to introduce higher policy standards in exchange for high‐regulating countries dismantling their trade barriers and granting access to their domestic markets. Low‐regulating countries often act as required and introduce legislation aimed at reducing pollution. This leads to declaratory or de jure policy convergence. But such legislative action is not always associated with de facto or actual policy convergence, since policies are not always enforced. To analyze the strategic aspect of this potential “slippage,” we set up a game‐theoretic model with imperfect information. In the model, a high‐regulating and a low‐regulating country negotiate a bilateral free trade agreement with environmental provisions. We show how potential gains from trade, policy enforcement, and reputation costs, as well as domestic demands for environmental protection affect the occurrence of environmental policy convergence through conditional trade agreements. This study thereby advances our understanding of the relationship between bilateral trade and convergence of environmental policies.

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Section: The Modelmentioning

confidence: 99%

Changing Economic Openness for Environmental Policy Convergence: When Can Bilateral Trade Agreements Induce Convergence of Environmental Regulation?

Bechtel

Tosun

2009

International Studies Quarterly

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“…Based on the latter's results, which focus on agriculture, Donoso and Hachette estimate that access to the mercosur market would not offer significant gains to Chile. See also Valdes (1995).…”

Section: Options For Preferential Trade Areasmentioning

confidence: 99%

Trade Policy Options for Chile: The Importance of Market Access

Harrison¹

2002

The World Bank Economic Review

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This article uses a multisector, multicountry, computable general equilibrium model to examine Chile's strategy of "additive regionalism"-negotiating bilateral free trade agreements with all of its significant trading partners. Taking Chile's regional arrangements bilaterally, only its agreements with Northern partners provide sufficient market access to overcome trade diversion costs. Due to preferential market access, however, additive regionalism is likely to provide Chile with gains that are many multiples of the static welfare gains from unilateral free trade. At least one partner country loses from each of the regional agreements considered, and excluded countries as a group always lose. Gains to the world from global free trade are estimated to be vastly larger than gains from any of the regional arrangements.

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“…On the enlargement of the EU and monetary uni cation, see Bo nger 1995; Michalski and Wallace 1992;Winters 1993b;and Alesina and Grilli 1994. On the expansion of NAFTA, see Brown, Deardorff, and Stern 1995;Silva 1996;Curry 1993;Gestrin and Rugman 1994;Rivera 1995;and Valdes 1995. International Organization 52, 2, Spring 1998, pp. 397-419 r 1998 by The IO Foundation and the Massachusetts Institute of Technology that contains behavioral implications not found in other theories.…”

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confidence: 99%

Managing the Evolution of Multilateralism

Downs¹,

Rocke²,

Barsoom³

1998

Int Org

152

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One of the most prominent characteristics of multilateral organizations is that they do not “spring forth full blown”; they grow. Although this is well known, relatively few attempts have been made to explain it at a general level or to explore its implications. In this paper we show why states that desire to create a multilateral organization or agreement might be attracted to a strategy that involves admitting potential members sequentially based on their preferences. Such a “sequential construction” strategy can generate an unusual kind of structure-induced equilibrium that dramatically mitigates the breadth-depth trade-off and increases the level of cooperation a multilateral is able to attain. We evaluate these claims with data drawn from the history of the European Union and twenty environmental multilaterals.

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Joining an Existing Regional Trade Agreement from the Perspective of a Small Open Economy: Chile's Accession to NAFTA and MERCOSUR

Cited by 5 publications

References 1 publication

Changing Economic Openness for Environmental Policy Convergence: When Can Bilateral Trade Agreements Induce Convergence of Environmental Regulation?

Changing Economic Openness for Environmental Policy Convergence: When Can Bilateral Trade Agreements Induce Convergence of Environmental Regulation?

Trade Policy Options for Chile: The Importance of Market Access

Managing the Evolution of Multilateralism

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