Bilateralism and free trade

Sanjeev Goyal, Sumit Joshi

Research output: Contribution to journalArticlepeer-review


We study a setting with many countries; in each country there are firms that can sell in the domestic as well as foreign markets. Countries can sign bilateral free-trade agreements that lower import tariffs and thereby facilitate trade. We allow a country to sign any number of bilateral free-trade agreements. A profile of free-trade agreements defines the trading regime. Our principal finding is that, in symmetric settings, bilateralism is consistent with global free trade. We also explore the effects of asymmetries across countries and political economy considerations on the incentives to form trade agreements.

Original languageEnglish (US)
Pages (from-to)749-778
Number of pages30
JournalInternational Economic Review
Issue number3
StatePublished - Aug 2006

ASJC Scopus subject areas

  • Economics and Econometrics


Dive into the research topics of 'Bilateralism and free trade'. Together they form a unique fingerprint.

Cite this