DP1012 Trade Policy and Regional Integration: Implications for the Relations between Europe and Africa

Author(s): Paul Collier, John Toye
Publication Date: July 1994
Keyword(s): Credibility, Reciprocal Distrimination, Regional Integration, Trade Liberalization
JEL(s): F02, F13, F15, F36, O19, O55
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=1012

For Africa, a regional customs union is unlikely to realise net welfare gains (in the sense of trade creation dominating trade diversion) which cannot be attained through unilateral trade liberalization. Unilateral reform has often failed in Africa, however. A regional customs union tied to Europe with reciprocal free trade is likely to dominate unilateral liberalization in several ways. Most importantly, it would make trade liberalization credible and thereby easier to sustain.