ABSTRACT
The last chapter sought to explain how policy objectives other than the maximization of private income can be formally introduced into customs union theory in the simplest manner. In reality not only are the objectives of public policy extremely diverse, but so are the policy instruments that may be used to attain them. Even if the objective is purely to secure resource allocation gains from market integration, tariff policy is not the only instrument available, nor is it necessarily, on its own, a sufficient means. The mere elimination of tariffs in a customs union will not necessarily bring about improvement in the allocation of resources if other policy-induced obstacles to a unified market then become the binding constraints. The gains to be secured from the reduction or elimination of these non-tariff barriers may be as great as, if not greater than, those to be derived from the elimination of such non-tariffs themselves. If states decide to seek efficiency gains through market integration, they may thus be induced to seek to expand those gains by the adoption of common measures that go beyond the institution of a customs union or a common market.
