The adjustment of external tariffs in the Kemp‐Wan‐Grinols compensation scheme

Abstract

This paper considers the adjustment of external tariffs when two countries integrate and implement the Kemp-Wan-Grinols compensation scheme. Attention is also paid to the restrictions set by Article XXIV of GATT. This paper shows how the external tariffs would change in a three-good, three-country model under the assumption of gross substitutability. The results are sensitive to the initial trade pattern. In particular, they depend on the number of goods initially traded between the member countries. The analysis can be extended to a multi-commodity model if the preferences of the countries have identical CES representation. JEL classification: F11, F15L'ajustement des tarifs douaniers avec le monde exte´rieur dans le sche`me de compensation a`la Kemp-Wan-Grinols. Ce me´moire examine l'ajustement des tarifs avec le monde exte´rieur quand deux pays forment un tout e´conomique inte´gre´et mettent en place un sche`me de compensation a`la Kemp-Wan-Grinols. On prend en compte les restrictions impose´es par l'article XIV du GATT. On indique comment les tarifs avec le monde exte´rieur changeraient dans un mode`le a`trois pays et trois biens quand on postule un degre´ge´ne´ral de substituabilite´. Les re´sultats de´pendent du pattern initial de commerce : en particulier, ils de´pendent du nombre de biens initialement e´change´s entre les pays membres. L'analyse peut eˆtre ge´ne´ralise´e a`un mode`le a`plusieurs biens si les pre´fe´rences des pays ont une repre´sentation CES identique.

The service sector in the free-trade agreement between the EU and Singapore: closing the gap between policy and business realities

“…The conclusion of regional and bilateral trade agreements (RTAs and BTAs) are traditionally considered to be a less efficient strategy for trade liberalisation, and are still disputed in the theory of customs unions (Wong 2006). Compared with the multilateral order, they are often accused for undermining the system itself, and are sometimes labelled 'spaghetti bowls' or 'noodle soups', due to the large number of confusing, complex and overlapping country-to-country constellations (Kuroda 2006;Bhagwati 2008).…”