Articlehybrid1995

Free Trade Agreements versus Customs Unions

252 citations0/0 files storedJournal of Development Economics

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Global trade and economics World Trade Organization Law Canadian Policy and Governance

Abstract

Until the advent of the North American Free Trade Agreement (NAFTA), analyses of preferential trading arrangements began by assuming a customs union (CU) with a common external tariff, and the differences between customs unions and free trade agreements (FTAs) have been little analyzed. This paper points to some of the differences between FTAs and customs unions, and shows that on welfare grounds a customs union is always Pareto-superior to an FTA. Moreover, the political economy of FTAs will lead to more opposition to further multilateral trade liberalization than will customs unions.

Citations in this library

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References

1976An elementary proposition concerning the formation of customs unions 1989Is Bilateralism Bad?

Cited by

1996Preferential Trading Areas and Multilateralism: Strangers, Friends or Foes?2016The domestic battle over the design of non-trade issues in preferential trade agreements 2003Making EU Trade Agreements Work: The Role of Rules of Origin 2008Democracy, Veto Players and the Depth of Regional Integration 2005Rules of Origin in North-South Preferential Trading Arrangements with an Application to NAFTA 2001Regional trade agreements and the WTO 2004How Has NAFTA Affected the Mexican Economy? Review and Evidence 1999Regional Integration and Lobbying for Tariffs Against Nonmembers

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