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Publication Type:
journal articles

Publication Year:
2018

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Are Customs Unions Really so Scarce?

Economic Record, 2018.

Abstract: We show that generalized customs unions (CUs), in which members choose different external tariff rates while still maximizing total member welfare, are always welfare-superior to both standard CUs with common external tariffs and free trade areas (FTAs). Since generalized CUs are indistinguishable to FTAs in practice, our analysis implies that observed TAs that have the appearance of FTAs may, in fact, be CUs. This possibility offers one potential explanation for the design of the WTO's rules on regional trade agreements, in particular the WTO's specification of a CET as the defining feature of a CU. Our results also suggest that empirical estimates of the different impacts of FTAs and CUs may be subject to a trade-agreements-misclassification bias.

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Publication Reference Link:
https://onlinelibrary.wiley.com/doi/abs/10.1111/1475-4932.12436?af=R

Break down of publication data into fields

Publication Title:
Are Customs Unions Really So Scarce?

Author Name:
Elie Appelbaum

Co-Author Name(s):

Mark Melatos

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