Regional Economic Integration and Article Xxiv of the GATT

Posted: 25 Aug 1998

See all articles by Junichi Goto

Junichi Goto

Kobe University

Koichi Hamada

Yale University - Department of Economics

Abstract

This paper studies the economic impact of regionalism under the realistic assumptions of constant tariffs and asymmetric bloc formation. Extending the Krugman framework, we decompose the impact into several components, each of which has a clear economic implication. Economic integration definitely worsens outsider s welfare even if the external tariffs of the bloc are unraised. Bloc member s welfare first increases with the expansion of the bloc, but when about half of the world is united into the bloc, welfare begins to decrease. Simulation results shed some light on the incentive structure of major participants, who face various configurations of regional integration.

JEL Classification: F15

Suggested Citation

Goto, Junichi and Hamada, Koichi, Regional Economic Integration and Article Xxiv of the GATT. Available at SSRN: https://ssrn.com/abstract=117189

Junichi Goto (Contact Author)

Kobe University ( email )

2-1, Rokkodai-cho, Nada-ku
Kobe, 657-8501, 657-8501
Japan
81-78-803-0398 (Phone)
81-78-861-6434 (Fax)

Koichi Hamada

Yale University - Department of Economics ( email )

28 Hillhouse Ave
New Haven, CT 06520-8268
United States

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