NAFTA as a Means of Raising Rivals' Costs
The North American Free Trade Agreement (NAFTA) was designed to reduce tariff rates between Mexico, Canada and the U.S.A. over a period of ten years. However, lower tariff rates are only available to firms that comply with complicated and costly NAFTA filing regulations. Such regulations raise costs...
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Veröffentlicht in: | Review of industrial organization 1999-09, Vol.15 (2), p.103-113 |
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description | The North American Free Trade Agreement (NAFTA) was designed to reduce tariff rates between Mexico, Canada and the U.S.A. over a period of ten years. However, lower tariff rates are only available to firms that comply with complicated and costly NAFTA filing regulations. Such regulations raise costs of small firms relative to large firms in a domestic industry which engages in trade between NAFTA countries. This implication of NAFTA regulations can lead to increased concentration in domestic industries, an hypothesis which can be tested as the transition period comes to an end. Finally, our model suggests an explanation for why the levels of trade from the U.S.A. to Mexico have been lower than general expectations. |
doi_str_mv | 10.1023/A:1007796825076 |
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source | PAIS Index; SpringerLink Journals; EBSCOhost Business Source Complete; JSTOR Archive Collection A-Z Listing |
subjects | Competition Competitive advantage Compliance Compliance costs Costs Economic costs Economic models Fixed costs Free trade Game theory Hypotheses Industrial concentration Industrial economics Industrial market Industrial regulation Marginal costs NAFTA North American Free Trade Agreement Regulation Size of enterprise Small & medium sized enterprises-SME Studies Tariffs Trade Trade agreements Trade regulations Writers |
title | NAFTA as a Means of Raising Rivals' Costs |
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