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Fortress Europe: Jericho or Chateau d'If?

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  • Desruelle, Dominique
  • Richardson, Martin

Abstract

Traditional analysis of customs union formation suggests that it leads to an increase in members' external tariffs. This paper stresses two aspects of European trade and trade policy--a large volume of intra-industry trade between similar countries and a political motivation for tariffs--and highlights a role for tariff coordination in a model of differentiated products in which tariffs affect domestic costs and thus export prices and the magnitude of monopolistic rents. We show that when workers choose the tariffs and receive but a small portion of tariff revenues, the union's tariff wall falls. Copyright 1997 by Blackwell Publishing Ltd.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Review of International Economics.

Volume (Year): 5 (1997)
Issue (Month): 1 (February)
Pages: 32-46

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Handle: RePEc:bla:reviec:v:5:y:1997:i:1:p:32-46

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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0965-7576

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Cited by:
  1. Winters, L. Alan, 1996. "Regionalism versus multilateralism," Policy Research Working Paper Series 1687, The World Bank.
  2. Rodney D. Ludema, 1998. "On the Value of Preferential Trade Agreements in Multilateral Negotiations," International Trade, EconWPA 9802003, EconWPA.
  3. Giorgia Albertin, 2007. "Will a Regional Bloc Enlarge?," IMF Working Papers 07/69, International Monetary Fund.
  4. Richard Baldwin, 2008. "Big-Think Regionalism: A Critical Survey," NBER Working Papers 14056, National Bureau of Economic Research, Inc.
  5. Giorgia Albertin, 2008. "Regionalism or Multilateralism? A+L3787 Political Economy Choice," IMF Working Papers 08/65, International Monetary Fund.

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