ScholarLens Back to search
1995•Journal of Development EconomicsOpen access

Free Trade Agreements versus Customs Unions

Anne O. Krueger

Open full text 23 citations

Abstract

Until the advent of the North American Free Trade Agreement (NAFTA), analyses of preferential trading arrangements began by assuming a customs union (CU) with a common external tariff, and the differences between customs unions and free trade agreements (FTAs) have been little analyzed. This paper points to some of the differences between FTAs and customs unions, and shows that on welfare grounds a customs union is always Pareto-superior to an FTA. Moreover, the political economy of FTAs will lead to more opposition to further multilateral trade liberalization than will customs unions.

About this research paper

What this paper is about

Until the advent of the North American Free Trade Agreement (NAFTA), analyses of preferential trading arrangements began by assuming a customs union (CU) with a common external tariff, and the differences between customs unions and free trade agreements (FTAs) have been little analyzed. This paper points to some of the differences between FTAs and customs unions, and shows that on welfare grounds a customs union is always Pareto-superior to an FTA. Moreover, the political economy of FTAs will lead to more opposition to further multilateral trade liberalization than will customs unions.

Why it matters

OpenAlex reports 23 citations for this work. Citation counts describe recorded attention and do not establish research quality.

Key contribution

A contribution statement is not available in the OpenAlex record.

Method / approach

Method details are not available in the OpenAlex metadata.

Main findings

Findings are not separately available in the OpenAlex metadata.

Limitations

Limitations are not available in the OpenAlex metadata.

Applications

Application details are not available in the OpenAlex metadata.

Available abstract

Until the advent of the North American Free Trade Agreement (NAFTA), analyses of preferential trading arrangements began by assuming a customs union (CU) with a common external tariff, and the differences between customs unions and free trade agreements (FTAs) have been little analyzed. This paper points to some of the differences between FTAs and customs unions, and shows that on welfare grounds a customs union is always Pareto-superior to an FTA. Moreover, the political economy of FTAs will lead to more opposition to further multilateral trade liberalization than will customs unions.

Key concepts: Customs union, Free trade, Opposition (politics), International free trade agreement, Tariff, International economics, International trade, Rules of origin

Related papers

Related paper 1Related paper 2Related paper 3
Back to paper searchBrowse research topicsOriginal source
Free Trade Agreements versus Customs Unions — Research Paper | ScholarLens