The Silent Success of Customs Unions

Arbeitspapier

While “mega FTAs” and WTO-driven efforts at multilateral liberalisation dominate the agenda, customs unions (CU) are the silent success story of regional integration. Throughout the world, CUs have been superseding earlier FTAs, as new unions were formed or old ones expanded. Due to problems of measurement, this fact appears to have gone largely unnoticed so far. We show that the proliferation of CUs is driven by national social welfare considerations: even allowing for lobbying, CUs lead to higher social welfare than any other bilateral trade agreement. Thus, even the most ambitious mega FTAs eventually turn into “mega CUs”.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 5944

Classification and Topics

• Classification: Wirtschaft ; Models of Trade with Imperfect Competition and Scale Economies; Fragmentation ; Trade Policy; International Trade Organizations ; Empirical Studies of Trade
• Subject: customs unions ; political viability ; member welfare

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Gnutzmann, Hinnerk ; Gnutzmann-Mkrtchyan, Arevik
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/144979
• Last update: 10.03.2025, 11:42 AM CET