Multilateral Or Bilateral?Rethinking Of The Construction Of Free Trade Agreement Mechanism

After Brexit and the U.S withdrew from the TPP,the trend of reverse globalization began to appear.The United States intended to deviate from the multilateral trade strategy and instead seek bilateralization.Under the new situation,research on the multilateralization or bilateralization of Free Trade Agreements has a certain degree of theoretical and practical significance.On the basis of combing the relevant contents and methods of the theoretical research,this paper conducts theoretical modeling based on the perspective of the game and simulates two situations in which free trade agreements have been concluded between the three countries;On the basis of theory,the paper use CUSTA and NAFTA as empirical case,first analyze the data of the three countries of North America(the United States,Canada,and Mexico)and their main 24 trading partners from 1979 to 2016 to exam the impact brought by CUSTA and NAFTA;Then based on the manufacturing industry,the empirical parts followed by an in-depth study at the industry level,using the trade data of the manufacturing industries in the three countries of North America from 1979 to 2016 to perform basic regression and sub-industry attributes(labor-intensive,capital-intensive,and technology-intensive)regression.The last part is a difference-in-difference method to further explore the effect of CUSTA and NAFTA.The research in this paper shows that:from the national level,the welfare effects of several bilateral trade agreements in member countries are no less than a multilateral trade agreement,and the benefits of the North-North Trade Agreement are greater than those of South-South and North-South;The more competitive industries are more likely to benefit from bilateral trade.Empirical tests have found that the actual benefits of bilateral free trade agreements are better than the trilateral free trade agreements,and that the profit of CUSTA,a north-south free trade agreement,is greater than NAFTA,a free trade agreement involving the north and south;Subdividing the manufacturing industry for further inspection,the conclusion is still valid.Last,this paper puts forward some suggestions in order to make certain marginal contributions to theory and reality.