The Theory of Customs Unions: Trade Diversion and Welfare

Lipsey, Richard G.

doi:10.2307/2551626

Cited by 221 publications

(100 citation statements)

References 0 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…The literature initiated by Viner and substantially enriched by [11]- [15] among others addressed the basic effects of trade liberations. The studies predicted that the idea of formation of a customs union as a form of trade liberalization, could lead to both gains and losses in world welfare.…”

Section: Theoretical Literature On Trade and Revenue Effectsmentioning

confidence: 99%

Uganda’s Trade and Revenue Effects with the EAC Countries, DRC and Sudan

Samuel¹

2015

View full text Add to dashboard Cite

A WITS partial equilibrium model is used to perform simulations on Uganda's trade and revenue effects with the EAC countries, DRC and Sudan using highly disaggregated HSC six-digit level trade data. At the zero percent tariff rate, tariff revenue effects in all country cases were small. At the 25 percent tariff rate, tariff revenue effects in all country cases simulated were large. This indicates that the revenue implications of changes of applied rates depend on the applied tariff rate on imports. High tariff rates show larger revenue effects, while low tariff rates show lower revenue effects. However higher tariff rates show lower trade volumes and lower tariff rates high trade volumes.

show abstract

Section: Theoretical Literature On Trade and Revenue Effectsmentioning

confidence: 99%

Uganda’s Trade and Revenue Effects with the EAC Countries, DRC and Sudan

Samuel¹

2015

View full text Add to dashboard Cite

show abstract

“…Note that in a special case of j = 1 for all j, we have N symmetric countries with the same size. According 3 See Gehrels (1956)(1957)) and Lipsey (1957) for early theoretical models that compare the implications of zero elasticity of demand and nonzero elasticity of demand. Also see Panagariya (2000) for a recent discussion on the implications of downward-sloped demand and upward-sloped supply.…”

Section: The Economic Environmentmentioning

confidence: 99%

Bilateral versus Multilateral Free Trade Agreements: A Welfare Analysis

Yilmazkuday

2011

SSRN Journal

View full text Add to dashboard Cite

Why do we observe proliferation of bilateral free trade agreements (FTAs) between certain types of countries instead of having progress in attaining global free trade through a multilateral FTA? We answer this question by exploring the enforceability of di¤erent types of FTAs through comparing minimum discount factors that are necessary to sustain them in an in…nitely repeated game framework. We also search for the globally welfare maximizing trade agreements that are sustainable under di¤erent conditions. The results depict that transportation costs, di¤erences in country sizes and comparative advantages are all obstacles for having a multilateral FTA. Accordingly, international development policies conducted for the removal of such obstacles should be the main goal toward achieving a multilateral FTA, which we show to be the …rst-best solution to the maximization problem of global welfare.

show abstract

“…According to his analysis, the welfare results of a customs union depends on whether trade creation (the replacement of higher-cost domestic production by lower-cost imports from partner countries) or trade diversion (replacement of lower-cost imports from third countries by higher-cost imports from member countries) dominates. Viner's analysis was subsequently modified by Meade (Meade, 19551, who separated the production and consumption effects of a customs union, and Lipsey (Lipsey, 1957(Lipsey, , 1960, who connected the theory of customs unions to the theory of "second best" and defined the factors influencing the welfare effects of economic integration.…”

Section: Theoretical Aspects Of Economic Cooperation Between Ldcsmentioning

confidence: 99%