Technology Choice and Trade Policy in International Oligopolistic Market

本研究探讨不同国家间双边自由贸易协定的形成是否会成为多边自由贸易的基石。我们得到了以下结论：(1)除非谈判国的市场规模相差很大，否则可以形成双边自由贸易协定；(2)只有在相对较大的国家之间形成初始自由贸易协定，双边自由贸易协定才能通过形成重叠的自由贸易协定成为自由贸易的构建集团。这些结果表明，只有先形成发达国家之间的自由贸易协定，再形成发达国家与发展中国家之间的自由贸易协定，才能实现多边自由贸易。

This research investigates whether a formation of bilateral FTA between dissimilar countries becomes a building bloc for multilateral free trade. We obtain the following results: (i) a bilateral FTA can be formed unless the market sizes of the negotiating countries are quite different, and (ii) a bilateral FTA can be a building bloc for free trade through the formation of overlapping FTAs only when the initial FTA is formed between relatively large countries. These results imply that multilateral free trade can be realized when FTAs between developed countries are formed firstly and then FTAs between developed and developing countries are formed.