Non-Preferential Trading Clubs
This Paper examines the welfare implications of non-discriminatory tariff reforms by a subset of countries, which we term a non-preferential trading club. We show that there exist coordinated tariff reforms, accompanied by appropriate income transfers between these countries, which unambiguously increase the welfare of these member countries while leaving the welfare of non-members unaltered. These tariff reforms are chosen to maintain world prices at their pre-club levels and, in this respect, the trading clubs act in a Kemp-Wan-like manner. In terms of economic policy implications, our results show that there exist regional, MFN-consistent arrangements that lead to Pareto improvements in world welfare. Open regionalism is an example of such trading arrangements.
|Date of creation:||Oct 2002|
|Date of revision:|
|Contact details of provider:|| Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ.|
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
|Order Information:|| Email: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Murray C. Kemp & Koji Shimomura, 1998.
"A Second Elementary Proposition Concerning: The Formation of Customs Unions,"
Discussion Paper Series
95, Research Institute for Economics & Business Administration, Kobe University, revised May 1998.
- Murray C. Kemp & Koji Shimomura, 2001. "A Second Elementary Proposition Concerning the Formation of Customs Unions," The Japanese Economic Review, Japanese Economic Association, vol. 52(1), pages 64-69.
- Kemp, M.C. & Shimomura, K., 1998. "A Second Elementary Proposition Concerning the Formation of Customs Unions," Papers 98/09, New South Wales - School of Economics.
- Anderson, James E & Neary, J Peter, 1992. "Trade Reform with Quotas, Partial Rent Retention, and Tariffs," Econometrica, Econometric Society, vol. 60(1), pages 57-76, January.
- J.P. Neary, 1997.
"Pitfalls in the Theory of International Trade Policy: Concertina Reforms of Tariffs and Subsidies to High Technology Industries,"
CEP Discussion Papers
dp0346, Centre for Economic Performance, LSE.
- Neary, J Peter, 1998. " Pitfalls in the Theory of International Trade Policy: Concertina Reforms of Tariffs, and Subsidies to High-Technology Industries," Scandinavian Journal of Economics, Wiley Blackwell, vol. 100(1), pages 187-206, March.
- Neary, J Peter, 1997. "Pitfalls in the Theory of International Trade Policy: Concertina Reforms of Tariffs and Subsidies to HIgh-Technology Industries," CEPR Discussion Papers 1740, C.E.P.R. Discussion Papers.
- Neary, J. P., 1997. "Pitfalls in the Theory of International Trade Policy: Concertina Reforms of Tariffs, and Subsidies to High-Technology Industries," Papers 97/26, College Dublin, Department of Political Economy-.
- J. P. Neary, 1997. "Pitfalls in the theory of international trade policy: concertina reforms of tariffs and subsidies to high technology industries," LSE Research Online Documents on Economics 20341, London School of Economics and Political Science, LSE Library.
- J. Peter Neary, 1997. "Pitfalls in the theory of international trade policy : concertina reform of tariffs, and subsidies to high-technology industries," Working Papers 199726, School of Economics, University College Dublin.
- Bagwell, Kyle & Staiger, Robert W., 2004. "Multilateral trade negotiations, bilateral opportunism and the rules of GATT/WTO," Journal of International Economics, Elsevier, vol. 63(1), pages 1-29, May.
- C. Fred Bergsten, 1997.
Working Paper Series
WP97-3, Peterson Institute for International Economics.
- Kyle Bagwell & Robert W. Staiger, 1997.
"An Economic Theory of GATT,"
NBER Working Papers
6049, National Bureau of Economic Research, Inc.
- Sontheimer, Kevin C, 1971. "The Existence of International Trade Equilibrium with Trade Tax-Subsidy Distortions," Econometrica, Econometric Society, vol. 39(6), pages 1015-35, November.
- Richardson, Martin, 1995. "On the Interpretation of the Kemp/Wan Theorem," Oxford Economic Papers, Oxford University Press, vol. 47(4), pages 696-703, October.
- Srinivasan, T-N, 1996.
"The Common External Tariff of a Customs Union : Alternative Approaches,"
755, Yale - Economic Growth Center.
- Srinivasan, T. N., 1997. "The common external tariff of a customs union: Alternative approaches," Japan and the World Economy, Elsevier, vol. 9(4), pages 447-465, December.
- Hatta, Tatsuo & Fukushima, Takashi, 1979. "The welfare effect of tariff rate reductions in a many country world," Journal of International Economics, Elsevier, vol. 9(4), pages 503-511, November.
- Turunen-Red, Arja H & Woodland, Alan D, 1991. "Strict Pareto-Improving Multilateral Reforms of Tariffs," Econometrica, Econometric Society, vol. 59(4), pages 1127-52, July.
- John Kennan & Raymond Riezman, 2013.
"Optimal Tariff Equilibria with Customs Unions,"
World Scientific Book Chapters,
in: International Trade Agreements and Political Economy, chapter 5, pages 53-66
World Scientific Publishing Co. Pte. Ltd..
- Mayer, Wolfgang, 1981. "Theoretical Considerations on Negotiated Tariff Adjustments," Oxford Economic Papers, Oxford University Press, vol. 33(1), pages 135-53, March.
- Kemp, Murray C. & Wan, Henry Jr., 1976. "An elementary proposition concerning the formation of customs unions," Journal of International Economics, Elsevier, vol. 6(1), pages 95-97, February.
- Diewert, W. E., 1973. "Functional forms for profit and transformation functions," Journal of Economic Theory, Elsevier, vol. 6(3), pages 284-316, June.
- W. E. Diewert & A. H. Turunen-Red & A. D. Woodland, 1989. "Productivity- and Pareto-Improving Changes in Taxes and Tariffs," Review of Economic Studies, Oxford University Press, vol. 56(2), pages 199-215.
- Panagariya, Arvind & Krishna, Pravin, 2002. "On necessarily welfare-enhancing free trade areas," Journal of International Economics, Elsevier, vol. 57(2), pages 353-367, August.
- Fukushima, Takashi & Kim, Namdoo, 1989. "Welfare improving tariff changes : A case of many goods and countries," Journal of International Economics, Elsevier, vol. 26(3-4), pages 383-388, May.
- Mark Melatos & Alan D. Woodland, 2007. "Pareto-optimal Delegation in Customs Unions," Review of International Economics, Wiley Blackwell, vol. 15(3), pages 441-461, 08.
- Arvind Panagariya, 2000. "Preferential Trade Liberalization: The Traditional Theory and New Developments," Journal of Economic Literature, American Economic Association, vol. 38(2), pages 287-331, June.
When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:3572. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.