On the theory of customs union and tariff policy

  • Leonardo Medrano Centro de Investigación y Docencia Económicas
Keywords: tariffs, free trade agreement, custom union


This paper studies the changes in optimal tariffs on goods from the rest of the world due to the signing of a free trade agreement and the build up of a custom union. It shows that a trade agreement that reduces or eliminates tariffs between member countries, gives them the incentives to reduce tariffs on goods from the rest of the world regardless of the existence of a custom union in an agreement. It also shows that tariffs reduction is greater when the agreement does not contemplate a custom union.


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How to Cite
MedranoL. (1997). On the theory of customs union and tariff policy. Estudios Económicos, 12(1), 53-65. https://doi.org/10.24201/ee.v12i1.249
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