POLI 441 Lecture Notes - Lecture 23: Trade Diversion, Multilateralism, Efficient-Market Hypothesis
23 Oct 2018
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Deving countries invariably against standards: we may have different prefs and capacities for upholding standards. A single universal standard inevitably comes at the cost of one or the other: can we leave standards to consumers, labeling and information may be sufficient. If industry, is it a high or low-cost standard follower: remains imperfect criterion. 1930s: first wave of regionalism in 1960s, resurgence of regionalism in 1990s. Share of trade between members was high pre-pta, the diversion. Is unlikely, and welafre improvement likely. caps: power looms larger in regional setting, cost of exclusion: e. g. tpp and china. Increases exit options=multilateralism becomes progressively less likely: plurilateral may allow self-selected groups to liberalize new areas if they want to e. g. gov procurement at the wto, ptas can serve as laboratories for insts. Domestic markets are limited, poor want access to large, wealthy market, but why rich countries into poor: answer: for investment and re-export.
