Common External Tariff Choice in Core Customs Unions*

Mark Melatos and Alan Woodland

Review of International Economics, 2009, vol. 17, issue 2, 292-303

Abstract: This paper investigates how customs union members select the common external tariff (CET) to levy on imports from nonmembers. A perfectly competitive, pure exchange, general‐equilibrium model of world trade is simulated. Contrary to most previous work, countries have the freedom to share authority over CET choice and to select from a variety of possible coalition forms. The results confirm that when customs unions are observed in the core, members may wish to share responsibility for CET choice in a variety of ways. Generally, however, the member country that is relatively well‐endowed or has relatively elastic consumer preferences tends to take the lead in CET choice.

Date: 2009
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