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| Glebe, Thilo W.; Salhofer, Klaus. |
| Small countries may benefit from the formation of a trade bloc, since their combined market power will enable them to manipulate the terms of trade. The question of interest is whether countries will benefit from the enlargement of a trading bloc, if trade liberalization induces countries to substitute domestic support measures for conventional border protection. The paper deals with this question by analyzing the conditions for positive welfare effects resulting from the enlargement of a trade bloc. Based on a partial equilibrium trade model, we consider a game in production taxes/subsidies between two trade blocs. The tax/subsidy instrument may capture the production effect which can be induced by a combination of environmental, health or safety rules.... |
| Tipo: Conference Paper or Presentation |
Palavras-chave: Trade bloc; Trade liberalization; Game theory; European Union; International Relations/Trade; D6; F11; Q17; C7. |
| Ano: 2006 |
URL: http://purl.umn.edu/25529 |
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| Glebe, Thilo W.. |
| This paper analyses how the enlargement of a trade bloc will affect national welfare. We establish a partial equilibrium model of a trade bloc either operating as a monopoly with a competitive fringe or facing a duopolistic game in production taxes/subsidies. Given this framework, we demonstrate how member countries’ welfare effects depend on their trade flow and the market power of the trade bloc. A numerical estimation of the effects of EU enlargement on the major grain crop markets suggests that welfare effects are negligible. Economic reasons are therefore unlikely to be a motivating force for further enlargement. |
| Tipo: Journal Article |
Palavras-chave: Trade bloc; Trade liberalisation; Game theory; European Union; International Relations/Trade; D42; F11; Q17; Q18. |
| Ano: 2009 |
URL: http://purl.umn.edu/58061 |
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