Suppose Belarus, a small country, imposes a tariff in the amount of t per unit on imported

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Suppose Belarus, a small country, imposes a tariff in the amount of t per unit on imported coal. Assume that it imports coal from Ukraine rather than Poland because the former has a lower net-of-tariff price. Furthermore, suppose that the Belarusian government is considering whether to apply for membership to the EU. As a member of the EU, Belarus would have to remove its tariffs on all countries within the customs union, such as Poland. Using the accompanying figure, analyze the welfare effect of EU membership on Belarus.

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International Economics

ISBN: 9781319218508

5th Edition

Authors: Robert C. Feenstra, Alan M. Taylor

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