Trade policy of a free trade agreement in the presence of foreign lobbying

Andrey Stoyanov

Journal of International Economics, 2009, vol. 77, issue 1, pages 37-49

Abstract: This paper studies the effect of foreign lobbies on trade policy of a country which is a member of a Free Trade Agreement (FTA). It uses a monopolistically competitive political economy model in which the government determines external tariffs endogenously. The effect of foreign lobbying under the FTA is examined empirically using Canadian industry-level trade data that allow differentiating of lobby groups by the country of origin. The analysis suggests that the presence of foreign lobbying has a significant effect on the domestic trade policy. The heterogeneity of foreign lobbies is also important: the presence of an organized lobbying group in an FTA partner country tends to raise trade barriers while an organized lobbying group of exporters from outside of the FTA is associated with less protection.

Keywords: Trade; policy; Free; Trade; Areas; Foreign; lobbies (search for similar items in EconPapers)
Date: 2009
View citations in EconPapers

Downloads: (external link)
http://www.sciencedirect.com/science/article/B6V6D ... 3c87a095402be6f7d23b
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:eee:inecon:v:77:y:2009:i:1:p:37-49

Access Statistics for this article

Journal of International Economics is edited by J. Eaton and C. M. Engel

More articles in Journal of International Economics from Elsevier
Series data maintained by Heidi Boesdal ().