Intégration régionale Sud-Sud et répartition intra-zone des activités
AbstractRelying on a three-country model of economic geography (one Northern and two Southern countries), this paper analyzes the effects of South-South regional integration on the location of industry inside the area. A comparison between different trading arrangements shows that in the absence of cooperation, a developing country can promote industrialization and improve its welfare by unilateral trade liberalization. However, the benefits of unilateral liberalization seem to hold only in a context where the other developing country maintains unilateral protectionism. When instead there is cooperation among the Southern countries, the customs union seems to be the best option because a South-South liberalization coupled with protection vis-à-vis of the North improves the production structures and welfare levels without asymmetry among the integrating countries. However, while the formation of a customs union area benefits the integrating region as a whole according to the industry size, some member countries may be reluctant to apply a common tariff outside the area from the point of view of welfare. This result, the so-called prisoner? dilemma, displays difficulties in implementing a customs union. Finally, our paper highlights the costs resulting from no cooperation : by implementing trade protection against each other, the Southern countries would deteriorate their performance both in terms of industrialization and welfare, while accentuating their trade dependence vis-à-vis of the North.Classification JEL : F12, F15, O10, R10
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Bibliographic InfoArticle provided by Presses de Sciences-Po in its journal Revue économique.
Volume (Year): 55 (2004)
Issue (Month): 1 ()
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Find related papers by JEL classification:
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- F15 - International Economics - - Trade - - - Economic Integration
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
- R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
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