U.S. Hub-and-spoke Bilaterals and the Multilateral Trading System
Author: Ronald J. Wonnacott
Publisher:
Published: 1990
Total Pages: 28
ISBN-13:
DOWNLOAD EBOOKOn January 1, 1989, the U.S. entered into a free trade agreement with Canada. By 1993 it may conclude a similar agreement with Mexico and perhaps other countries in the Americas. This document describes two broad possible frameworks for this emerging free trade system: a plurilateral free trade agreement by n plus 1 countries in which the U.S. and the other n countries are trading freely; and a hub-and-spoke trading system in which the U.S., as the hub in a rimless wheel, has a bilateral spoke agreement with each of the other n countries. The purpose of the paper is to examine the economics of the two broad options in order to clarify where trade in the Americas is headed in this threshold period in which the risk of decision by default is high.