ABSTRACT
It is widely believed that, under conditions of perfect competition and in the absence of non-tariff distortions, a customs union (CU) is more bene®cial or less harmful than a comparable but distinct free trade association (FTA). However, there is yet to appear a precise statement and proof of the proposition. Standing in the way of effective analysis have been vagueness about the constituency (whose welfare is at issue?) and about the sense in which a CU and an FTA may be described as comparable. The main purpose of this note is to establish one precise version of the proposition, in the context of a worldwide constituency.
