DP7703 The 'Emulator Effect' of the Uruguay Round on US Regionalism

Author(s): Marco Fugazza, Frédéric Robert-Nicoud
Publication Date: February 2010
Keyword(s): Multilateralism, Regionalism, Stumbling bloc, Uruguay Round
JEL(s): F13, F14, F15, N70
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=7703

Using a detailed data set at the tariff line level, we find an emulator effect of multilateralism on subsequent regional trade agreements involving the US. We exploit the variation in the frequency with which the US has granted immediate duty free access (IDA) to its Free Trade Area partners across tariff lines. A key finding is that the US has granted IDA status especially on goods for which it had cut the multilateral MFN tariff during the Uruguay round the most. Thus, the Uruguay Round (multilateral) ?concessions? have emulated subsequent (preferential) trade liberalisation. We conclude from this that past liberalisation sows the seeds of future liberalisation and that multilateral and preferential trade agreements are dynamic complements.