TEACHING NOTE — CUSTOMS UNIONS VS. NON-PREFERENTIAL QUOTAS

2002 ◽  
Vol 47 (02) ◽  
pp. 269-273
Author(s):  
YEONG-HER YEH
Keyword(s):  
Terms Of Trade ◽  
Customs Union ◽  
Import Quota ◽  
Customs Unions

This paper intends to show that increasing a non-preferential import quota is always superior to joining a customs union, assuming that the customs union is small. However, increasing a non-preferential input quota is not necessarily superior to joining a customs union if the customs union is large and capable of influencing the terms of trade.

scholarly journals Winners and Losers in Customs Unions: An Experimental Investigation

2011 ◽  
Vol 2 (2) ◽  
pp. 49-72
Author(s):  
Baboo M Nowbutsing
Keyword(s):  
Comparative Advantage ◽  
Trade Diversion ◽  
Careful Consideration ◽  
Terms Of Trade ◽  
Trade Flows ◽  
Customs Union ◽  
Trade Effect ◽  
Customs Unions ◽  
The World ◽  
Ricardian Model

In the context of a Competitive Ricardian Model (CRM), one can ask whether it is possible to relate winners and losers from a CU based on comparative advantage considerations. This was pursued by Venables (2003), who showed that careful consideration of a country’s comparative advantage – with the rest of the world relative to that with its partners in the CU- yields predictions about winners and losers. Starting from initial tariff equilibrium, in a 3 country model with a continuum of goods, he shows that a country with ‘extreme’ comparative advantage will be more vulnerable to trade diversion. In this experiment, the 3 x 3 Competitive Ricardian Model (CRM) in two scenarios multiple import tariffs and a customs union. We fully characterise the equilibrium under both. Starting from a tariff distorted situation, we find that when a customs union is formed there is an increase in trade flows among members; a rise in individual consumption of some goods; a clear terms of trade effect and the existence of trade diversion. Our experimental results support the simulation findings of Venables (2003), who showed that countries which have ‘extreme’ comparative advantage in a customs union will generally be more vulnerable to trade diversion.

scholarly journals Impact of alternative regional trade arrangements on the Ethiopian economy

2021 ◽  
Vol 10 (1) ◽  
Author(s):  
Habtamu Shiferaw Amogne ◽  
Taiji Hagiwara
Keyword(s):  
Transition Period ◽  
Terms Of Trade ◽  
Endowment Effect ◽  
Welfare Loss ◽  
Customs Union ◽  
Regional Trade ◽  
Partnership Agreement ◽  
Saving Effect ◽  
The Impact ◽  
Trade And Investment

AbstractThe Common Market for Eastern and Southern Africa (COMESA) is a Free Trade Area (FTA) regional trade agreement in Africa. Currently, Ethiopia is negotiating to join COMESA FTA. This study assesses the impact of three regional trade arrangements, COMESA FTA, customs unions, and the European Partnership Agreement (EPA) on the economy of Ethiopia. The analysis is based on a static Global Trade Analysis Project (GTAP) model, version 9 database. Unlike previous studies, the customs union scenarios are designed at the detailed Harmonized System (HS) level. COMESA FTA (scenario 1) with standard GTAP model results in a welfare loss for Ethiopia due to negative terms of trade and investment-saving effect, but with unemployment closure (scenario 2); Ethiopia enjoys a welfare gain mainly due to endowment effect. In scenario 3 (COMESA customs union) and scenario 4 (European Partnership Agreement), Ethiopia loses due to negative terms of trade and investment-saving effect. There is a large increase in demand for unskilled labor force in Ethiopia by around US$23 million, US$112 million, and US$43 million for scenario 2, 3, and 4 respectively. Moreover, there is a positive output effect for oilseeds, leather, and basic metals across all scenarios. The world, as a whole, enjoys welfare gains with COMESA FTA (scenario 1 and 2). However, with scenario 3 and 4, there is an overall welfare loss. There is no strong reason for Ethiopia to move to the customs union, and the EPA in the short run. Therefore, a transition period is necessary, but it is recommended for Ethiopia to join COMESA FTA.

Customs Unions among Producing Countries with Different Costs

2009 ◽  
Vol 10 (1) ◽  
pp. 53-63
Author(s):  
Jose Mendez-Naya ◽  
Tomas Gomez-Arias
Keyword(s):  
Production Cost ◽  
Cournot Oligopoly ◽  
Customs Union ◽  
Customs Unions ◽  
Oligopoly Model ◽  
Consumer Country ◽  
Homogeneous Product ◽  
The One ◽  
Homogeneous Good

The effects of production cost asymmetries on the sustainability of customs unions among producing countries are investigated using a homogeneous-product Cournot oligopoly model, in which three producing countries subsidize exports of an homogeneous good to a consumer country that imposes a tariff on imports. It is found that the only sustainable customs union is the one formed by the three-member customs union. However, although the said customs union will be in equilibrium if utility transferences among member countries are allowed, it could not be in equilibrium if such transferences are not allowed.

International Trade Organization (Interim Commission)

1949 ◽  
Vol 3 (3) ◽  
pp. 542-543
Keyword(s):  
International Trade ◽  
South African ◽  
Textile Industry ◽  
Customs Union ◽  
Trade Restrictions ◽  
Excise Tax ◽  
Customs Unions ◽  
Import Restrictions ◽  
International Trade Organization ◽  
Emergency Measures

On April 8, 1949, more than 500 delegates and assistants from thirty-four countries met in Annecy, France, for trade meetings convened to discuss tariff barriers and other problems of international trade. Twenty-three nations already adhered to the General Agreement on Tariffs and Trade and eleven others wished to join it. The first of such meetings had been held in Geneva in 1947. The first meeting of the series held in Annecy concluded on April 22 after adopting a declaration defining the position of Palestine in relation to the agreement and adopting a decision to seek emergency measures to resolve the crisis of the Cuban textile industry. The meeting also studied charges of trade restrictions, plans for customs unions, problems of new tariff negotiations, African import restrictions that had introduced discriminations against imports from dollar and other hard currency areas, the dispute between India and Pakistan over rebate of the excise tax on exports to Pakistan from India, the South African–Southern Rhodesian customs union and modifications of various countries' tariff schedules introduced since 1947.

The effects of customs unions on the pattern and terms of trade in a Ricardian model with a continuum of goods

1989 ◽  
Vol 27 (1-2) ◽  
pp. 147-164 ◽  
Author(s):  
Dennis R. Appleyard ◽  
Patrick J. Conway ◽  
Alfred J. Field
Keyword(s):  
Terms Of Trade ◽  
Customs Unions ◽  
Ricardian Model

The Terms and Patterns of Hungarian Foreign Trade, 1882–1913

1977 ◽  
Vol 37 (2) ◽  
pp. 329-358 ◽  
Author(s):  
Scott M. Eddie
Keyword(s):  
Foreign Trade ◽  
Import Substitution ◽  
Terms Of Trade ◽  
Customs Union ◽  
Tariff Policy ◽  
Relative Improvement ◽  
Structure Of Trade ◽  
Tariff System

Volumes, prices, and composition of Hungarian trade are analyzed, focussing on the effects of association with Austria in a political and customs union in a time of increasing protectionism. The author concludes that the relative improvement in terms of trade with Austria compared to overall trade was an incomplete amelioration of a strong pre-existing pro-Austrian bias in the tariff system. Tariff policy strongly favored both countries' traditional exports, with the consequence that the structure of trade with Austria changed little, while that with the outside world was dramatically altered. Hungary's efforts at quasi-independence, especially with respect to import substitution in manufactures at Austrian expense, were essentially ineffective. The text and appendices contain numerous tables and descriptions of trade for important commodities and commodity groups.

scholarly journals Differences in fishery and aquaculture products, their production and sale technical regulations in Eurasian Economic Union and legislation and practice of the European Union

2021 ◽  
Author(s):  
Mihails Silovs ◽  
◽  
Olga Dmitrijeva ◽  
Keyword(s):  
European Union ◽  
Customs Union ◽  
The European Union ◽  
Customs Unions ◽  
Product Categories ◽  
Eurasian Economic Union ◽  
Aquaculture Products ◽  
Economic Union ◽  
Food Legislation ◽  
Technical Regulations

The mandatory requirements for the fishery and aquaculture products, their production and sale in force in the territory of the Customs Union of the Eurasian Economic Union (CU EAEU) arise from the regulatory and legal acts of the Eurasian Economic Union and its predecessor - the Customs Union - and apply in a package approach similar to the law of the European Union pertaining to the food safety area. The requirements of the EAEU technical regulations have been analysed taking into account that European exporting enterprises are first of all obliged to comply with the requirements of the listed EU regulatory and legal acts applicable to their production process and products. The aim of this paper was to run a comparative analysis on the mandatory requirements of the food legislation of the European and Customs Unions regarding fishery and aquaculture products, their production and sale. The issues of certification of certain product categories are analysed separately, the requirements for canned fish being highlighted. The analysis is relevant for all fish processing companies which may consider the possibility of starting export to the countries of the CU EAEU and are intended to reduce costs associated with products’ entry into these markets.

scholarly journals International Law of Customs Unions: Conceptual Variety, Legal Ambiguity and Diverse Practice

2019 ◽  
Vol 30 (2) ◽  
pp. 361-389
Author(s):  
Michal Ovádek ◽  
Ines Willemyns
Keyword(s):  
International Law ◽  
19Th Century ◽  
State Sovereignty ◽  
Customs Union ◽  
Design Issues ◽  
Customs Unions ◽  
Key Issues ◽  
Historical Presence ◽  
Definition Of ◽  
The Impact

Abstract Despite having considerable historical presence – traceable from 19th-century Germany – customs unions (CUs) have long been an understudied phenomenon in international law. This article aims to remedy this gap by critically reviewing the concept of customs union and identifying key issues in CU designs. The article problematizes what is understood by the concept of CU and what is entailed by the foremost definition of CUs found in Article XXIV of the General Agreement on Tariffs and Trade (GATT). It further investigates how recurrent design issues are resolved in practice by different CUs considering the inherent tension between the enactment of common rules and institutions and state sovereignty. We find variety in the historical, economic and legal conceptualizations of CUs, ambiguity and lacunas in Article XXIV of the GATT and diversity of CU designs along with a discernible concern for the impact of legal arrangements on state sovereignty.

Contextual History, Practitioner History, and Classic Status: Reading Jacob Viner’s The Customs Union Issue

2013 ◽  
Vol 35 (4) ◽  
pp. 491-515
Author(s):  
Paul Oslington
Keyword(s):  
Customs Union ◽  
Customs Unions ◽  
Preferential Trading ◽  
Preferential Trading Arrangements ◽  
The One

Jacob Viner’s The Customs Union Issue, published in 1950, is the one undeniable classic in its field. The first part of this paper traces the development of Viner’s thinking on preferential trading arrangements, places his work in context, and clarifies his position on disputed issues. The second part considers the reception of his work, from the enthusiastic early reviewers to the international economists who further developed the theory of customs unions, to contemporary practitioners. While practitioners consistently misread Viner, these misreadings were scientifically fruitful, and there are reasons why fruitful science might flow from poor contextual history. Among contemporary international economists, the book has become a classic, marking off and justifying a field of enquiry.

scholarly journals On the Relationship between Preferential and Multilateral Trade Liberalization: The Case of Customs Unions

2013 ◽  
Vol 5 (1) ◽  
pp. 63-99 ◽  
Author(s):  
Kamal Saggi ◽  
Alan Woodland ◽  
Halis Murat Yildiz
Keyword(s):  
Trade Liberalization ◽  
Free Trade ◽  
Stable Equilibrium ◽  
Customs Union ◽  
Customs Unions ◽  
Restricted Version ◽  
Multilateral Trade ◽  
Multilateral Trade Liberalization ◽  
The Relationship

This paper compares equilibrium outcomes of two games of trade liberalization. In the Bilateralism game, countries choose whether to liberalize trade preferentially via a customs union (CU), multilaterally, or not at all. The Multilateralism game is a restricted version of the Bilateralism game in that countries cannot form CUs and can only undertake non-discriminatory trade liberalization. When countries have symmetric endowments, global free trade is the only stable equilibrium of both games. Allowing for endowment asymmetry, we isolate circumstances where the option to form CUs helps further the cause of multilateral liberalization as well as where it does not. (JEL F12, F13)

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