Endogenous formation of customs unions under imperfect competition: open regionalism is good

Yi, Sang-Seung

doi:10.1016/s0022-1996(96)01429-8

Cited by 247 publications

(205 citation statements)

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“…So from (6), we can show that non-member countries become worse off if a CU expands. Yi (1996) shows this result without the Article XXIV constraint, reflecting a standard property in the literature that CU formation and expansion tend to hurt non-members through trade diversion. In the following Lemma, we show that the Article XXIV constraint is not sufficient to prevent the harmful trade diversion effect, but attenuates it slightly.…”

Section: Preliminariesmentioning

confidence: 67%

“…In this subsection, we summarize the key characteristics and results of Yi's (1996) model, which we adopt as our benchmark. In the following subsection, we introduce the Article XXIV constraint into the model.…”

Section: Benchmark Model Of Unconstrained Cu Formationmentioning

confidence: 99%

“…where τ ij = 0, for i = 1, ..., k and j = 1, ..., k. As Yi (1996) shows, the unique optimal CET of a CU of size k is…”

Section: Cus and Optimal Tariffsmentioning

confidence: 99%

“…Our analysis proceeds along the same lines as Yi (1996) but with the key difference that all CUs have to abide by Article XXIV. We show that the Article XXIV constraint attenuates the negative effects of CU formation, but does not prevent them altogether.…”

Section: Cu Formation and Welfarementioning

confidence: 99%

“…To analyze Article XXIV, we focus on CU formation and adopt as a benchmark the model of Yi (1996). 4 This model is the simplest framework where we can identify the composition effect of Article XXIV.…”

Section: Introductionmentioning

confidence: 99%

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Is the GATT/WTO's Article XXIV bad?

Mrázová

Vines

Zissimos

2013

Journal of International Economics

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The GATT/WTO Article XXIV prevents a customs union (CU) from raising its common external tariff. In this paper, we compare CU formation with and without this Article XXIV constraint. We show, in a multi-country oligopoly model, that for a given CU structure, Article XXIV improves world welfare by lowering trade barriers.However, we also show that Article XXIV has a composition effect on CU formation: it affects the endogenous choice of CUs. By encouraging more symmetric CUs, Article XXIV causes more trade to be subject to trade barriers. As a result, Article XXIV may be 'bad' for world welfare.

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Section: Preliminariesmentioning

confidence: 67%

Section: Benchmark Model Of Unconstrained Cu Formationmentioning

confidence: 99%

“…where τ ij = 0, for i = 1, ..., k and j = 1, ..., k. As Yi (1996) shows, the unique optimal CET of a CU of size k is…”

Section: Cus and Optimal Tariffsmentioning

confidence: 99%

Section: Cu Formation and Welfarementioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Is the GATT/WTO's Article XXIV bad?

Mrázová

Vines

Zissimos

2013

Journal of International Economics

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Conditionality, Separation, and Open Rules in Multilateral Institutions

Conconi

Handbook of International Trade, Volume II

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We examine the implications for the viability of multilateral cooperation of di¤erent legal principles governing how separate international agreements relate to each other. We contrast three alternative legal regimes: conditionality-making cooperation in one area a condition for cooperation in another-separation-forbidding sanctions in one area to be used to enforce cooperation in others-and open rules, i.e. absence of any restriction on the patterns of cross-issue cooperation arrangements and sanctions. As an example, we focus on a scenario where countries can enter into selective and separate binding trade and environmental agreements with di¤erent partners. Our analysis suggests that conditionality is more likely to facilitate multilateral, multi-issue cooperation in situations where the environmental policy stakes are small relative to the welfare e¤ects of trade policies; when the costs of environmental compliance are high, a conditionality rule can hinder multilateral cooperation. Separation can undermine cooperation by limiting punishment, but can also promote broad cooperation by making partial cooperation more di¢cult to sustain. Thus, how di¤erent linkage regimes a¤ect multilateral negotiations depends on the structure of cooperation incentives for the countries involved.

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The sequential issue in free trade areas: Policy implication for Korea

Lee

2004

Int. J Fin Econ

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This paper addresses the sequential issue of countries entering into a Free Trade Area. Korea, China, Japan and the United States are the objects of investigation. Different sequences are ranked in terms of the present value of Korea's GDP using a computable general equilibrium model, and the sequence Korea-China-US-Japan was the best. Each sequence is evaluated from the perspective of globalization, which allows us to foresee both momentum and inertia of trade liberalization. The study will provide a deeper understanding of regionalism and globalization in the context of the regionalism versus multilateralism debate. Copyright © 2004 John Wiley & Sons, Ltd.

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Endogenous formation of customs unions under imperfect competition: open regionalism is good

Cited by 247 publications

References 4 publications

Is the GATT/WTO's Article XXIV bad?

Is the GATT/WTO's Article XXIV bad?

Conditionality, Separation, and Open Rules in Multilateral Institutions

The sequential issue in free trade areas: Policy implication for Korea

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