Comecon: A “Trade-Destroying” Customs Union?

In traditional theory the nations forming a customs union reduce barriers among themselves but maintain tariffs against nonmembers at the pre-customs-union level. This leads to trade creation and/or trade diversion. It is argued here that the formation of Comecon led to trade destruction and that th...

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Veröffentlicht in:Journal of Comparative Economics 1985-12, Vol.9 (4), p.410-423
1. Verfasser: Holzman, Franklyn D
Format: Artikel
Sprache:eng
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Zusammenfassung:In traditional theory the nations forming a customs union reduce barriers among themselves but maintain tariffs against nonmembers at the pre-customs-union level. This leads to trade creation and/or trade diversion. It is argued here that the formation of Comecon led to trade destruction and that this resulted because the members of Comecon were poorly suited to trade with each other and increased significantly barriers to trade with nonmembers. Thus trade with nonmembers that could not be replaced at low-enough cost at home or by member trading partners was eliminated.
ISSN:0147-5967
1095-7227
DOI:10.1016/0147-5967(85)90020-4