The Consistency of Partial Equilibrium Estimates of Trade Creation and Diversion

Predicting the trade effects of tariff reductions has received considerable attention in recent years with the advent of many preferential trade arrangements and the Tokyo Round negotiations. A widely cited article by Baldwin, Murray [1977] and a subsequent UNCTAD study by Ginmanal. ountries (LDCs) as a result of tariff cuts in more developed countries under the generalized system of preferences (GSPs) and under the most-favorednation (MFN) system. In a Brookings Institution study, Cline predicted the effects of various Tokyo Round concessions, taking into account the reduction in European Economic Community (EEC) trade diversion as a result of decreases in the common external tariff.

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	MacPhee, Craig R Paul C. Burmeister College Professor of Economics Expertise: International - Asia International - Europe International Trade & Finance NAFTA Public Policy Analysis Economics CBA 353 P.O. Box 880489 University of Nebraska-Lincoln Lincoln, NE 68588-0489, USA Phone: (402) 472-2449 Fax: (402) 472-9700 cmacphee1@unl.edu	MacPhee, Craig R	Economics