How Common is the Common External Tariff? Domestic Influences on European Union Trade Policy

Abstract:

This article examines the role of national-level politics and economics on the setting of supranational trade policy within the European Union (EU). It argues that, though EU member states must have a uniform tariff schedule, significant variation remains in the average, trade-weighted tariff because each country has a different bundle of imports into each country. Thus, some countries import more high-tariff goods than others.

This article argues that a significant part of this variation is intentional, because countries know which goods they import. Therefore, countries that prefer protection push for tariffs on products they import whereas countries that prefer free trade push for liberalization on products they import, with these preferences being driven by the amount of institutional access provided to interest groups and the economic conditions in the member states. This argument is tested with regression analyses of a panel of average tariff rates in the EU member states and the tariff schedule agreed to by the EU at the Uruguay Round of the General Agreement on Tariffs and Trade.