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| Gatsios, Konstantine; Karp, Larry S.. |
| Partial cooperation in setting trade policy may be worse than no cooperation for countries who form a customs union. The paper investigates three situations where this is likely to occur. First, if the countries forming the union comprise too small a percentage of the non-competitive sector of the industry, their cooperation may be disadvantageous for essentially the same reason that a merger may be disadvantageous in oligopolistic industries. Second, even if the countries forming the union comprise the entire non-competitive sector of industry, cooperation on trade policy may be disadvantageous if industrial policy (e.g. investment subsidies) are chosen non-cooperatively. The reason is that cooperation in trade policy may exacerbate the inefficiencies... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Trade and industrial policy; Imperfect competition; Customs union; International Relations/Trade. |
| Ano: 1989 |
URL: http://purl.umn.edu/51256 |
