On the theory of customs union and tariff policy

Authors

  • Leonardo Medrano Centro de Investigación y Docencia Económicas

DOI:

https://doi.org/10.24201/ee.v12i1.249

Keywords:

tariffs, free trade agreement, custom union

Abstract

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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Published

1997-01-01

How to Cite

Medrano, L. (1997). On the theory of customs union and tariff policy. Estudios Económicos De El Colegio De México, 12(1), 53–65. https://doi.org/10.24201/ee.v12i1.249