Office of Economics Working Paper: On the Effects of the Expansion of RegionalArrangements: An Intra-Industry Trade Model

摘要

This paper uses a differentiated-good model to study the welfare effects ofRegional Integration Arrangements (RIAs). It shows, on the one hand, that an expansion of a regional grouping always unambiguously hurt those that are left out even if the external tariffs of the RIA remain constant. On the other hand, the effects of an expansion on a member countrys welfare is positive for small RIA size but becomes negative as the RIA becomes large.