The Customs Union Issue: Why Do We Observe so Few of Them?
The Customs Union Issue: Why Do We Observe so Few of Them?
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关税同盟问题:为什么我们观察到的关税同盟如此之少?
DOI:
10.2139/ssrn.1400835
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发表时间:
2008
期刊:
影响因子:
--
通讯作者:
Gerald Willmann
中科院分区:
文献类型:
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作者:
G. Facchini;Peri A. Silva;Gerald Willmann
The number of preferential trade agreements has greatly increased over the past two decades, yet most existing bilateral arrangements take the form of free trade areas, and less than ten percent can be considered to be fully ∞edged customs unions. This paper develops a political economy model of trade policy under imperfect competition to provide a positive explanation for the prevalence of free trade areas. In a three{ country setting, a representative from each prospective member is elected to determine the tarifis to be applied on imported goods. Under a customs union, the necessity to coordinate tarifis leads voters to strategically delegate power to more protectionist representatives. Contrary to most of the existing literature, we show that strategic delegation may imply that free trade areas increase welfare compared to customs unions. Moreover, the model also indicates that free trade areas are more likely to be politically viable than customs unions.