We study, theoretically and empirically, how countries choose intra-bloc tariffs and preferential margins when they … to a customs union (where members coordinate external tariffs). Moreover, in customs unions (but not necessarily in free …

the effects of free trade agreements (FTAs) on external tariffs under a political economy setup. I extend the Grossman and … feasibility of an FTA. I find that the expectation of tariff reductions under endogenous tariffs makes an otherwise feasible FTA … under fixed tariffs become infeasible. However, if domestic import-competing sectors are relatively smaller, an FTA is more …

to the elimination of tariffs and cuts in non-tariff measures by 25%, is in the range of 1% to 4% of initial consumption …