Social Sciences
4 years ago

Abolishing Trade Barriers Could Spark Subsidy Wars Across Europe

RePEc: Research Papers in Economics
Completing the European Internal Market: Some Notes on Trade Policy
L. Alan Winters

Paper Summary

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The article discusses trade policy in the European internal market. It shows that most barriers to trade in the European Community do not follow the Ethier-Horn argument for internal tariffs. Removing certain regulations could impact agricultural trade. National production subsidies can harm small economies when capital and skilled labor can move freely. Subsidies could lead to competition between member states.