The value of multilateral trade liberalization and the need for third-party sanction

Kong-Pin CHEN, Cheng Zhong QIN, Larry D. QIU

Research output: Book Chapters | Papers in Conference ProceedingsBook ChapterResearch


The GATT/WTO and preferential trade agreements help member countries to achieve further gains from trade by promoting deeper trade liberalization. In general, free trade does not automatically follow from individualistic behavior. A major reason for this has to do with the existence of monopolistic power in trade.1 Trade liberalization requires that countries behave cooperatively and reciprocally. In certain circumstances, greater cooperation and reciprocity can only be achieved through multilateral trade agreements, as opposed to a web of bilateral trade agreements,2 and sustained through third-party punishments.
Original languageEnglish
Title of host publicationInternational economic policies in a globalized world
EditorsSeiichi KATAYAMA, Heinrich W. URSPRUNG
Place of PublicationBerlin
Number of pages11
ISBN (Electronic)9783642620720
ISBN (Print)9783642171345
Publication statusPublished - 2004
Externally publishedYes

Bibliographical note

We benefitted from comments by Stephen Ching and participants at the International Conference on Greater China and the WTO, held in March 2001 in Hong Kong. Financial support from Hong Kong SAR Government (HKUST6214100H) is greatly acknowledged.


  • Nash Equilibrium
  • Trade Policy
  • Trade Liberalization
  • Consumer Surplus
  • Pareto Improvement


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