Harmonizing External Quotas in a FTA: A Step Backward?

CEPR Discussion Paper Series Number 2002

Posted: 9 Feb 1999

See all articles by Olivier Cadot

Olivier Cadot

University of Lausanne - School of Economics and Business Administration (HEC-Lausanne); Centre for Economic Policy Research (CEPR); World Bank

Date Written: September 1998

Abstract

This paper explores how political-economy forces shape quantitative barriers against the rest of the world in a FTA. We show that whereas the dilution of lobbying power in a FTA typically leads to a relaxation of external quotas, this result is likely to be overturned as integration deepens. In particular, we show that cooperation among member countries on the level of their external quotas, cross-border lobbying by import-competing interests in the free-trade area and the consolidation of national external quotas into a single one, all lead to stiffer restrictions against imports from the rest of the world. We also show that unlike tariffs, endogenous quotas are not crucially affected by the presence of rules of origin.

JEL Classification: F11. F13. F15

Suggested Citation

Cadot, Olivier, Harmonizing External Quotas in a FTA: A Step Backward? (September 1998). CEPR Discussion Paper Series Number 2002, Available at SSRN: https://ssrn.com/abstract=141388

Olivier Cadot (Contact Author)

University of Lausanne - School of Economics and Business Administration (HEC-Lausanne) ( email )

Unil Dorigny, Batiment Internef
Lausanne, 1015
Switzerland
+41 21 692 3463 (Phone)
+41 21 692 3495 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

World Bank ( email )

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Washington, DC 20433
United States

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