Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/144979
Authors: 
Gnutzmann, Hinnerk
Gnutzmann-Mkrtchyan, Arevik
Year of Publication: 
2016
Series/Report no.: 
CESifo Working Paper 5944
Abstract: 
While “mega FTAs” and WTO-driven efforts at multilateral liberalisation dominate the agenda, customs unions (CU) are the silent success story of regional integration. Throughout the world, CUs have been superseding earlier FTAs, as new unions were formed or old ones expanded. Due to problems of measurement, this fact appears to have gone largely unnoticed so far. We show that the proliferation of CUs is driven by national social welfare considerations: even allowing for lobbying, CUs lead to higher social welfare than any other bilateral trade agreement. Thus, even the most ambitious mega FTAs eventually turn into “mega CUs”.
Subjects: 
customs unions
political viability
member welfare
JEL: 
F12
F13
F14
Document Type: 
Working Paper

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