Overlapped Free Trade Areas and the Agreements of Multilateral Trade

Nankai University (Philosophy and Social Sciences) 5:118-124 (2006)
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Abstract

Overlapping free trade zone since the 1990s as the Free Trade Area of the prominent phenomena in the development of the multilateral trading system had a major impact. Use of infinitely repeated game analysis, it can be argued axle country has special advantages, will produce the cohesion of the effects of industrialization, and spoke countries will face discriminatory treatment, resulting in the decentralization of industry effects. Overlapping free trade agreement itself has the characteristics of self-executing, as opposed to the traditional free trade zones, the multilateral trading system more easily satisfy the incentive compatibility constraints. The overlapped free trade areas developed fast and had an influence on multilateral trade system in 1990s. The special advantages of axle countries can be proved with the analytical method of infinite times repeat games, which will produce condense effects on the industries; while those wheel scope countries will be in the face of discriminate and some decentralization effect will appear. The overlapping free trade has the feature of self-undertaking, which will more easily satisfy harmonic control requirement than traditional free trade areas

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