The sustainable cooperative tariffs: a political economy perspective

Racem Mehdi ()
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Racem Mehdi: Centre d'Economie de la Sorbonne et ESSECT - Université de Tunis, https://centredeconomiesorbonne.univ-paris1.fr

Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne

Abstract: The purpose of this paper is to examine the international trade cooperation in order to determine the sustainable cooperative tariff rates in a political economy perspective. This paper establishes a tariff-setting game among two countries as a two-phase game: negotiation phase and implementation phase. Our results show the following points. First, the sustainable cooperative tariff rate depends on the political weight placed by government on domestic import-competing industry, on the political influence of the foreign export industry and on the economic stakes of domestic tariff policy in these two sectors. Second, international cooperation is sustainable when governments involved in tariff negotiation are patient enough. Third, difference in patience affects the relative bargaining power of governments

Keywords: Trade negotiation; political economy; repeated game (search for similar items in EconPapers)
JEL-codes: D72 F13 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2008-03
New Economics Papers: this item is included in nep-int and nep-pol
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Persistent link: https://EconPapers.repec.org/RePEc:mse:cesdoc:r08018

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