COUNTERTRADE AS TRADE CREATION AND TRADE DIVERSION

Abla M. Abdel‐latif and Jeffrey Nugent

Contemporary Economic Policy, 1994, vol. 12, issue 1, 1-11

Abstract: This paper analyzes countertrade as a special case of a customs union in which the countertrade agreement gives rise (as in customs union theory) to both trade‐creating and trade‐diverting effects. The net effects on welfare are ambiguous. A detailed case study from Egypt and brief examples from other countries illustrate the relevance of this interpretation.

Date: 1994
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https://doi.org/10.1111/j.1465-7287.1994.tb00407.x

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