Working Paper Series, Department of Economics, Copenhagen Business School
Pascalis Raimondos-Møller and Alan D. Woodland
Non-Preferential Trading Clubs
Abstract: This paper examines the welfare implications of
non-discriminatory tariff reforms by a subset of countries, which we term a
non-preferential trading club. We show that there exist coordinated tariff
reforms, accompanied by appropriate income transfers between the member
countries, that unambiguously increase the welfare of these countries while
leaving the welfare of non-members unaltered. In terms of economic policy
implications, our results show that there exist regional, MFN-consistent
arrangements that lead to Pareto improvements in world welfare.
Keywords: Trading clubs; non-preferential tariff reform; Kemp-Wan-Ohyama proposition; (follow links to similar papers)
JEL-Codes: F15; (follow links to similar papers)
29 pages, August 28, 2006
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