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Why a Marketplace Must Not Discriminate

Published online by Cambridge University Press:  20 January 2017

Rolf J. Langhammer
Rolf J. Langhammer*
Affiliation:
Kiel Institute for the World Economy
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Abstract

This paper discusses the pros and cons of a Transatlantic Free Trade Area (TAFTA) in comparison with an informal trade-facilitating marketplace between Europe and the US. It finds considerably more cons, especially since TAFTA would be expected to produce larger, more detrimental discriminatory effects on dynamic non-member economies, mainly in Asia but also in food-exporting regions as well. 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.

Keywords

regional trading arrangementmultilateral trade policyfree trade area
Type
Article
Information
Business and Politics , Volume 11 , Issue 3 , October 2009 , pp. 1 - 23
Copyright
Copyright © V.K. Aggarwal 2009 and published under exclusive license to Cambridge University Press 

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