Discussion paper

DP897 The EC and World Protectionism: Dimensions of the Political Economy

This paper appraises the arguments that the creation of the EC has increased world protectionism relative to what it would otherwise have been. Models of tariff bargaining between trade blocs suggest some increase, because the optimum tariff is higher for larger blocs, but this is not inevitable. Models of EC internal decision-taking suggest an increase because of the restaurant-bill problem, the tendency of committees towards universalism, and the attempts of the Commission to wrest control of trade policy from national governments. The arguments are suggestive, but they are not strong enough to be quite certain that a protectionist effect exists.