Third-Country Effects On The Formation Of Free Trade Agreements

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The recent proliferation of free trade agreements (FTA) has led to an increasingly complex network of privileged trade relationships. The economic literature has generally studied the formation of free trade agreements based on the economic characteristics of the participating countries. In this article, we show, both theoretically and empirically, that the choice of a free trade agreement also depends decisively on existing free trade agreements with third countries. Taking into account the interdependence of free trade agreements helps to explain an important part of free trade agreements that would otherwise not be predicted by the economic characteristics of countries. Egger, P., Larch, M., 2008. Interdependent preferential adherences to the trade agreement: an empirical analysis. Journal of International Economics 76 (2), 384-399. Aghion, P., Antras, P., Helpman, E., 2007. Verhandlungen ├╝ber Freihandel. Journal of International Economics 73 (1), 1-30. Bond, E., Riezman, R., Syropoulos, C., 2004.

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