| ID | 189457 |
| Title Proper | Endogenous Security, Third-Party Trade, and Interstate Disputes |
| Other Title Information | a Conflict-Theoretic Analysis |
| Language | ENG |
| Author | Chang, Yang-Ming ; Sellak, Manaf |
| Summary / Abstract (Note) | This paper examines third-party trade and its implications for conflicts between hostile countries not engaging in trade. We present a conflict-theoretic model to analyze two adversaries’ endogenous arming decisions when they separately establish a free trade agreement (FTA) with a neutral third-party state. We contrast this multiple FTAs regime with a single FTA regime between one adversary and the third-party state, which excludes the other adversary as a non-member. In our analysis, the benchmark case is a protectionist regime when the bilateral trade between the third-party state and each of the adversaries is a tariff war. Among the three trade regimes, we show that the two adversaries’ aggregate arming is the lowest under multiple FTAs but is the highest under a single FTA. These results suggest that, despite no trade between two adversary countries, multiple FTAs through third-party trade have the pacifying or appeasing effect of lowering overall military buildups in interstate conflicts. |
| `In' analytical Note | Defence and Peace Economics Vol. 34, No.2; Mar 2023: p.160-182 |
| Journal Source | Defence and Peace Economics Vol: 34 No 2 |
| Key Words | Free Trade Agreements ; Inter State conflict ; Arming ; third-party trade ; optimal tariffs |