This note considers the well-known theorem of M. Kemp and H. Wan concerning the welfare gains from the formation of customs unions. The author argues that the theorem may not imply that a union can unilaterally guarantee a welfare gain if nonmembers set tariffs optimally against the union. He...

The author considers local content requirements in a second-best environment with foreign capital flows and explores the consequences for domestic producers of final goods. The author derives an expression for the welfare consequences of content protection in a competitive general equilibrium...

Home In a simple model of trade and competition policies we show that the abolition of trade restrictions may lead to governments independently choosing more competitive competition policies. Subsequent co-ordination of competition policy involves encouraging less competitive behaviour than when...