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Journal of Economic Integration 2000 September;15(3) :418-435.
DOI: https://doi.org/10.11130/jei.2000.15.3.418
Customs Unions and Free Trade Areas
Kimberly A. Clausing 
Reed College
Copyright ©2000 Journal of Economic Integration
ABSTRACT
This paper compares free trade areas and customs unions in terms of their potential to liberalize trade. While neither arrangement is shown to be unambiguously preferable, this paper generates specific conditions that determine when customs unions are preferred to free trade areas. The ranking of the two arrangements depends on how common external tariffs are set in customs unions, the restrictiveness of rules of origin in free trade agreements, and the original tariff levels among the member countries.
Keywords: Customs Unions | Free Trade Areas | Rules of Origin
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