A 3 × 3 Model of Customs Unions

Raymond Riezman

Chapter 1 in International Trade Agreements and Political Economy, 2013, pp 7-20 from World Scientific Publishing Co. Pte. Ltd.

Abstract: AbstractIn this paper we develop a three-country-three-good model of customs unions. The main result is that a sufficient condition for two countries to benefit from forming a customs union is that they are similar in the sense that their mutual trade is small. This result is obtained by analyzing the terms of trade effects rather than the more traditional emphasis on trade creation-trade diversion effects.

Keywords: International Trade; Political Economy; Theory of International Free Trade Agreements; Customs Unions; Tariff Dynamics; Storable Votes (search for similar items in EconPapers)
Date: 2013
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Journal Article: A 3 x 3 model of customs unions (1979)
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