The size of trading blocs Market power and world welfare effects

Bond, Eric W.; Syropoulos, Constantinos

doi:10.1016/0022-1996(95)01412-8

Cited by 203 publications

(129 citation statements)

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“…In future work, it would be useful to check the robustness of our results to alternative economic and policy-making environments. To check robustness to alternative economic environments, one could begin by examining the introduction of an Article XXIV constraint to other models of CU formation, such as that of Bond and Syropoulos (1996). These authors study CU formation in an endowment economy with C.E.S.…”

Section: Resultsmentioning

confidence: 99%

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: Resultsmentioning

confidence: 99%

Is the GATT/WTO's Article XXIV bad?

Mrázová

Vines

Zissimos

2013

Journal of International Economics

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“…2 In other words, FTA members enjoy more ‡exibility than CU members. Second, as noted in Bagwell and Staiger (1997a) and Bond and Syropoulos (1996), the coordination of tari¤s within a CU allows members to pool their market power, thereby leading them to impose relatively higher external tari¤s than FTAs.…”

Section: Introductionmentioning

confidence: 99%

External trade diversion, exclusion incentives and the nature of preferential trade agreements

Missios

Saggi

Yildiz

2016

Journal of International Economics

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In a game of endogenous trade agreements between three countries, we show that while the pursuit of customs unions (CUs) prevents global free trade from emerging as a coalition-proof Nash equilibrium, the pursuit of free trade agreements (FTAs) does not. This result re ‡ects the relatively ‡exible nature of FTAs: whereas each FTA member can independently undertake further trade liberalization with respect to the non-member, CU members must do so as a group due to their common external tari¤. By diverting members'exports away from the non-member, both types of trade agreements induce the non-member to voluntarily lower its import tari¤s.

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“…Jones (2007) for international alliances and Bandyopadhyay and Wall (1999) for choice between FTA and customs unions. A somehow similar discussion is present for asymmetries between trade blocs and their market power (Bond and Syropoulos, 1996) and tariff wars between large and small countries (Kennan and Riezman, 1988). 14 See also the discussion in Kang (2004).…”

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confidence: 63%

Russian Federalism and Post-Soviet Integration: Divergence of Development Paths

Libman

2011

Europe-Asia Studies

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The size of trading blocs Market power and world welfare effects

Cited by 203 publications

References 6 publications

Is the GATT/WTO's Article XXIV bad?

Is the GATT/WTO's Article XXIV bad?

External trade diversion, exclusion incentives and the nature of preferential trade agreements

Russian Federalism and Post-Soviet Integration: Divergence of Development Paths

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