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Endogenous Tariff Formation: The Case of Mercosur

Author

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  • Olarreaga, Marcelo
  • Soloaga, Isidro

Abstract

This paper confronts the results of the endogenous tariff literature with MERCOSUR (Mercado Comun del Sur, literally, ‘the Common Market of the Southern Cone’) evidence. It is shown that MERCOSUR’s common external tariff (CET), and member countries’ deviations from the CET and from internal free trade can be explained by sector/industry lobbying as predicted by the endogenous tariff literature. If political economy viability is a key to success, then MERCOSUR is here to stay.

Suggested Citation

  • Olarreaga, Marcelo & Soloaga, Isidro, 1998. "Endogenous Tariff Formation: The Case of Mercosur," CEPR Discussion Papers 1848, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:1848
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    Keywords

    Customs Unions; Mercosur; Political Economy;

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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