Template-Type: ReDIF-Paper 1.0

Author-Name: Lutz G. Arnold
Author-X-Name-First: Lutz G.
Author-X-Name-Last: Arnold

Author-Name: Michael Heyna
Author-X-Name-First: Michael
Author-X-Name-Last: Heyna

Title:"Low-Wage Competition: Pains From Trade for Medium-Wage Countries"
	
Abstract: The entry of a low-wage country into a world economy with pre-existing
wage differentials puts the gains from trade in a former low-wage and then
medium-wage country under pressure. If negotiations over the formation of
a free trade area cover international transfers, there is a strong presumption
that they bring about global free trade and compensation of the mediumwage
country if necessary. In the absence of international transfers, by contrast,
the medium-wage country is not compensated when global free trade
causes a reduction in its gains from trade, and it may even happen that it
is not part of the equilibrium free trade area.

Length: 25 pages
Creation-Date:  2020-12
File-URL: http://www.bgpe.de/texte/DP/200_Arnold_Lutz.pdf
File-Format: Application/pdf
File-Function: First version, 2020
Number: 200
Classification-JEL: F11, F61

Keywords: gains from trade, low-wage competition, North-South trade, free
trade area, core, equality

Handle: RePEc:bav:wpaper:200_ArnoldHeyna