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Free Trade Agreements, Customs Unions In Disguise?

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  • Teti, Feodora
  • Felbermayr, Gabriel
  • Yalcin, Erdal

Abstract

We document a hitherto overlooked stylized fact: countries’ external tariff schedules are surprisingly similar. The correlation is particularly striking for countries belonging to the same deep preferential trade agreement (PTA). We show that most of this is due to selection effects rather than to ex post convergence. This has an important implication: In most PTAs, for a vast majority of products, trade deflection is not profitable even in the absence of costly rules of origin.

Suggested Citation

  • Teti, Feodora & Felbermayr, Gabriel & Yalcin, Erdal, 2017. "Free Trade Agreements, Customs Unions In Disguise?," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168243, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc17:168243
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    References listed on IDEAS

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    Cited by:

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    2. Fernandes,Ana Margarida & Forero,Alejandro & Maemir,Hibret Belete & Mattoo,Aaditya, 2019. "Are Trade Preferences a Panacea? : The African Growth and Opportunity Act and African Exports," Policy Research Working Paper Series 8753, The World Bank.
    3. Irena Mikolajun & Jean-Marie Viaene, 2018. "Is Hard Brexit Detrimental to EU Integration? Theory and Evidence," CESifo Working Paper Series 7199, CESifo.
    4. Elie Appelbaum & Mark Melatos, 2018. "Are Customs Unions Really So Scarce?," The Economic Record, The Economic Society of Australia, vol. 94(307), pages 391-404, December.

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    More about this item

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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