Jacob Viner and Gottfried von Haberler, two theories of Custom Union, a precise answer for the European Union

Abstract

Jacob Viner and Gottfried von Haberler were two experts in International trade at the beginning of the twentieth century. In their works, they described the characteristics a customs union should fulfill, although they had somewhat different opinions on the matter. Taking as a reference the creation of a custom union in Europe, the aim of this paper is to study which of these two prominent economists succeeded in describing better the actual characteristics of the European custom union. In order to identify the results on trade of the European custom union we analyze two approaches of trade flow: a) the imports, including the Eastern countries and without them; b) the exports, through an econometric analysis of panel data and dummies including the 28-EU countries. The results suggest that Viner’s theory is more accurate for the European Custom Union.