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Via the intra-industry trade Cournot model in heterogeneous goods, thestudy deals with the strategies of how to select partner countries of freetrade agreement on basis of social welfare criteria of a country. Thus, it getsthe following results: Firstly, in a two-side FTA lowers tariffs onimports from any-member states. The FTA established on the similar market sizeof states. To establish a one-step global FTA is easier than other ways. Finally,as for allied strategies of the FTA, the first priority big country wants toally itself with is a medium-sized country, the second one of which is a smallcountry. Nevertheless, it is likely that big country will never have allies;the top priority a medium-sized country wants to ally itself with is a bigcountry; a small country is willing to ally itself to any country.

KEYWORDS

Economic Integration, Intra-Industry Trade, Bilateralism, Multilateralism

Cite this paper

Hsu, C. 2016 On Selecting Strategies of FTA Partners. Modern Economy, 7, 677-696. doi: 10.4236-me.2016.75072.





Author: Chu-Chuan Hsu

Source: http://www.scirp.org/



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