Abstract
This paper investigates the impact of customs unions (CUs) on the ability of countries to multilaterally cooperate within an economic environment characterized by trade-flow volatility. We find that the initiation of CU talks results in an easing of multilateral trade tensions, especially with regard to the employment of "special"-protection instruments, such as anti-dumping duties or safeguards. However, once the CU agreements come into force, a retreat to a more protectionist trading environment becomes necessary so that multilateral cooperation does not break down. Interestingly, in comparison with the pre-CU world, the utilization of "special"-protection tools in the post-CU world is more severe for "high" import volumes, but is less frequent overall. Moreover, "normal" protection remains low, largely unchanged from the pre-CU era.
Original language | English |
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Article number | 107 |
Number of pages | 37 |
Journal | B E Journal Of Economic Analysis & Policy |
Volume | 10 |
Issue number | 1 |
DOIs | |
Publication status | Published - 1 Jan 2010 |
Keywords
- customs unions
- special protection
- regional trade agreements
- multilateral cooperation
- market power