Author(s)

Chu-Chuan Hsu

Department of Marketing and Logistics Management, Yu Da University of Science and Technology, Miaoli.

Via the intra-industry trade Cournot model in heterogeneous goods, the study deals with the strategies of how to select partner countries of free trade agreement on basis of social welfare criteria of a country. Thus, it gets the following results: Firstly, in a two-side FTA lowers tariffs on imports from any-member states. The FTA established on the similar market size of states. To establish a one-step global FTA is easier than other ways. Finally, as for allied strategies of the FTA, the first priority big country wants to ally itself with is a medium-sized country, the second one of which is a small country. Nevertheless, it is likely that big country will never have allies; the top priority a medium-sized country wants to ally itself with is a big country; a small country is willing to ally itself to any country.

Economic Integration, Intra-Industry Trade, Bilateralism, Multilateralism

Hsu, C. (2016) On Selecting Strategies of FTA Partners. Modern Economy, 7, 677-696. doi: 10.4236/me.2016.75072.