Non-Preferential Trading Clubs

Alan Woodland and Pascalis Raimondos ()

No 3572, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This Paper examines the welfare implications of non-discriminatory tariff reforms by a subset of countries, which we term a non-preferential trading club. We show that there exist coordinated tariff reforms, accompanied by appropriate income transfers between these countries, which unambiguously increase the welfare of these member countries while leaving the welfare of non-members unaltered. These tariff reforms are chosen to maintain world prices at their pre-club levels and, in this respect, the trading clubs act in a Kemp-Wan-like manner. In terms of economic policy implications, our results show that there exist regional, MFN-consistent arrangements that lead to Pareto improvements in world welfare. Open regionalism is an example of such trading arrangements.

Keywords: Trading clubs; Non-preferential tariff policies; Open regionalism; Customs unions; Kemp-wan proposition (search for similar items in EconPapers)
JEL-codes: F15 (search for similar items in EconPapers)
Date: 2002-10
New Economics Papers: this item is included in nep-mic
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Related works:
Journal Article: Non-preferential trading clubs (2006)
Working Paper: Non-Preferential Trading Clubs (2006)
Working Paper: Non-Preferential Trading Clubs (2004)
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