Fortress Europe: Jericho or Château d’If?

Dominique Desruelle and Martin Richardson

Chapter 10 in Dimensions of Trade Policy, 2017, pp 195-217 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Traditional analysis of customs union formation suggests that it leads to an increase in members’ external tariffs. This paper stresses two aspects of European trade and trade policy — a large volume of intra-industry trade between similar countries and a political motivation for tariffs — and highlights a role for tariff coordination in a model of differentiated products in which tariffs affect domestic costs and thus export prices and the magnitude of monopolistic rents. We show that when workers choose the tariffs and receive but a small portion of tariff revenues, the union’s tariff wall falls.

Keywords: Trade Policy; Preferential Trading Agreements; Content Protection; Parallel Imports (search for similar items in EconPapers)
JEL-codes: F13 (search for similar items in EconPapers)
Date: 2017
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Journal Article: Fortress Europe: Jericho or Chateau d'If? (1997)
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