Taken into account in assessing whether a customs union is beneficial. In particular, the removal

Of tariff barriers between countries will change the terms of trade and therefore the

Relative volumes of the different commodities demanded, because of the price changes. It will

Shift the commodity pattern of trade as well as the geographical origins of the commodities

Traded. Whether a community will finish up better off therefore depends on the price and

Income elasticities of demand for the commodities traded. An added benefit may accrue because

The increase in the size of markets may enable economies of scale to be made. Finally, a

Protective tariff is initially imposed because home costs are high; but home costs may remain

High because a protective tariff is imposed. Removal of the tariff may induce more efficient

Operation and lower costs.

Commentary and Notes to Text 21.7.1.1

1. vis-a-vis — визави, по отношению

Unambiguously — недвусмысленно

To incur losses — потерпеть убытки

Better off — выгоднее

A move away from the optimum of resource allocation — несоответствие оптимальному распределению

Ресурсов

To accrue — увеличиваться, появиться (в данном контексте)

Removal of the tariff may induce more efficient operation and lower costs — снятие тарифа