This paper presents a formal analysis of how global welfare is affected by changing tariff and subsidy rates. The discussion stresses three types of reform whereby, surprisingly, trade liberalization has the potential to reduce world welfare: a multilateral equi-proportionate reduction of...

This paper proposes that Viner's celebrated trade diversion and trade creation terminology for the customs union problem be abandoned. As the alternative is offered a welfare calculus based upon the terms-of-trade and volume-of-trade taxonomy from the theory of tariffs. The paper discusses, by...

This paper analyzes how international side-payments can be used to facilitate international trade negotiations. The authors present a model where many countries trade many goods and they calculate, by use of the Shapley value, international income transfers that will induce nations to eliminate...