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Why Are Countries so Eager to Form Free Trade Areas?

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Kar-yiu Wong

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Working paper

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l   The Viner approach considers only the import side of an economy.

l   The export side of an economy should also be considered as well.

l   Some governments put more emphasis on the export side.

l   There is two good reasons for governments¡¦ emphasis on the export side:

ü  wants to help local firms to compete in foreign markets;

ü  This type of FTAs (aggressive FTAs) are beneficial for the market.