The Trade Agreement Embarrassment, Second Version

Wilfred Ethier ()

PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania

Abstract: The dominant academic literature about trade agreements maintains that they are only about national terms-of-trade manipulation and not at all about purely political concerns. Non-academic economists, commentators, and diplomats by contrast think that trade agreements are all about political concerns. There are two substantive and important distinctions between the two views. i Practitioners maintain that policymakers care virtually not at all about the terms of trade or about trade-tax revenue ii Practitioners, unlike academics, maintain that trade-agreement negotiations themselves change the underlying political economy. Observation of actual trade policy measures, though not conclusive, suggests that the practitioners are right and that the academics are wrong.

Keywords: Multilateralism; Standard Academic Model; Practitioners’ Conventional Wisdom; terms of trade; political economy (search for similar items in EconPapers)
JEL-codes: F10 F13 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2013-05-27, Revised 2013-09-02
New Economics Papers: this item is included in nep-int, nep-pke and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pen:papers:13-049

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