ABSTRACT
Normative trade theory has developed in a general competitive setting of Walras-Arrow-Debreu-McKenzie (WADM) type, where generality is reckoned in terms of the potentially large numbers of products and primary factors recognized, in terms of the weakness of the restrictions placed on the relationships in WADM models, in terms of the ease with which (time, place) subscripts accommodate imperfect product and factor mobility, and in other ways. The generality of the WADM models has not prevented the derivation of many propositions of broad scope dealing with the potential benefits of free trade to individual trading nations or with the potential Pareto improvements associated with particular types of free trade associations (including customs unions); see, for example, Kemp and Wan (1972, 1976), Kemp and Shimomura (2001b) and Kemp (2005). Moreover, in recent years, the focus of normative trade theory has drifted away from perfectly competitive to oligopolistic structures but without serious diminution in the generality of the models employed or of the conclusions derived; see, for example, the two Kemp-Shimomura (K-S) papers of 2001 (2001a, 2001c).
