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Can FTAs be leveraged for FDI?

Once tariffs are eliminated, the markets of the FTA partners can be served from a single unified location. This allows some firms to grow beyond what is achievable in the national market of a single country
Empirical studies have shown that trade pacts and investments are complements when the partner countries differ in relative endowments and are at different stages of development, while trade pacts and investments could be substitutes when the partner countries are similarly endowed and competing for the same FDI.
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