Economics, Econometrics and Finance
4 years ago

Impure trade blocs hinder global free trade, pure unions pave the way.

RePEc: Research Papers in Economics
Trade Bloc Formation Under Imperfect Competition
Paola Conconi

Paper Summary

The article explores how trade blocs are formed when countries have imperfect competition and use tariffs and subsidies. Pure customs unions with tariff cooperation can lead to global free trade, while impure customs unions with both tariffs and subsidies can hinder it.

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