Deepening of Regional Integration and Multilateral Trade Agreements

Bond, Eric W, Syropoulos, Constantinos and Winters, L. Alan (2001) Deepening of Regional Integration and Multilateral Trade Agreements. Journal of International Economics, 53 (2). pp. 335-361. ISSN 0022-1996

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We construct a three-country, two-bloc, multi-product trade model in which tariff agreements between customs union members are binding whereas inter-bloc tariff agreements are self-enforcing. Our main objective is to explore how the liberalization of trade between customs union members (i.e. the deepening of regional integration) affects the sustainability of tariff agreements with the rest of the world (ROW). We derive conditions under which Kemp¿Wan [Kemp, M.C. and H. Wan, Jr., 1976, An elementary proposition concerning the formation of customs unions, Journal of International Economics 6, 95¿97] adjustments in the external tariffs of union members result in self-enforcing tariff agreements with ROW and then use these adjustments to evaluate the general tariff-setting incentives of the two trading blocs.

Item Type: Article
Schools and Departments: University of Sussex Business School > Economics
Depositing User: L.Alan Winters
Date Deposited: 06 Feb 2012 18:15
Last Modified: 27 Mar 2012 07:57
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