EconPapers    
Economics at your fingertips  
 

Multilateral Tariff Cooperation During the Formation of Customs Unions

Kyle Bagwell and Robert Staiger ()

International Trade from University Library of Munich, Germany

Abstract: We study the implications of customs union formation for multilateral tariff cooperation. We model cooperation in multilateral trade policy as self-enforcing, in that it involves balancing the current gains from deviating unilaterally from an agreed-upon trade policy against the future losses from forfeiting the benefits of multilateral cooperation that such a unilateral defection would imply. The early stages of the process of customs union formation are shown to alter this dynamic incentive constraint in a way that leads to a temporary "honeymoon" for liberal multilateral trade policies. We find, however, that the harmony between customs unions and multilateral liberalization is temporary: Eventually, as the full impact of the emerging customs union becomes felt, a less favorable balance between current and future conditions reemerges, and the liberal multilateral policies of the honeymoon phase cannot be sustained. We argue that this is compatible with the evolving implications of the formation of the European Community customs union for the ability to sustain liberal multilateral trade policies under the General Agreement on Tariffs and Trade.

JEL-codes: F1 F2 (search for similar items in EconPapers)
Date: 1994-10-18
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

Downloads: (external link)
https://econwpa.ub.uni-muenchen.de/econ-wp/it/papers/9410/9410002.pdf (application/pdf)
https://econwpa.ub.uni-muenchen.de/econ-wp/it/papers/9410/9410002.ps.gz (application/postscript)

Related works:
Journal Article: Multilateral tariff cooperation during the formation of customs unions (1997) Downloads
Working Paper: Multilateral Tariff Cooperation During the Formation of Customs Unions (1994)
Working Paper: Multilateral Tariff Cooperation During the Formation of Customs Unions (1994) Downloads
Working Paper: Multilateral Tariff Cooperation during the Formation of Customs Unions (1993) Downloads
Working Paper: Miltilateral Tariff Cooperation During the Formation of Customs Unions (1993) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpit:9410002

Access Statistics for this paper

More papers in International Trade from University Library of Munich, Germany
Bibliographic data for series maintained by EconWPA ().

 
Page updated 2019-12-14
Handle: RePEc:wpa:wuwpit:9410002