Tariff protection and trade agreements

Leonardo Medrano
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Leonardo Medrano: Centro de Investigación y Docencia Económicas

Estudios Económicos, 1999, vol. 14, issue 2, 217-229

Abstract: This paper studies the optimal tariff rates on goods imported from the rest of the world when a commercial club accepts a new partner. It shows that when a new member is accepted into the club, the other members of a free trade agreement have incentives to reduce tariffs on the rest of the world’s goods. However, when the trade agreement is a custom union, the union may have incentives to increase the common external tariff. This happens when the industry of the custom union is small compared to the world industry

Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:emx:esteco:v:14:y:1999:i:2:p:217-229

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