MEASURING THE EFFECTS OF ECONOMIC-INTEGRATION ON 3RD COUNTRIES - A COMMENT

This paper examines the properties of a method recently developed by K reinin and Plummer of measuring the effect of economic integration sch emes (such a the North American Free Trade Agreement or the European C ommunity) on third countries. The Kreinin-Plummer measure is shown to produce upward-biased estimates. The measure is useful because of its meager data requirements, but it should be used as a guide to the maxi mum likely impact on third countries rather than as an unbiased estima te of the true impact.