The impact of regionalism and investment on multilateral free trade a three-country model /

by Phan, Dinh Hoai

The thesis includes the examination of a three-country model to demonstrate the effects of regionalism and investment on multilateral free trade, and the change in the governments´ attitute and behavior as a consequence of regionalism. Evaluating these effects the final conclusion can be drawn that FTAs obstruct an otherwise feasible multilateral free trade agreement, exactly because of their trade creating characteristic, in a way that the from the FTA excluded country benefits so much from the formation of the FTA, that its support to an MTA may be reversed. This analysis shows that an investment of a member country will lead to more trade creation, and consequently constitutes an even bigger “stumbling block” to global free trade.