An Eclectic Negotiation Theory of Trade Policy Behaviour

Sophus Garfiel and Ulrik Vestergaard Knudsen
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Sophus Garfiel: University of Copenhagen Institute of Economics
Ulrik Vestergaard Knudsen: University of Copenhagen Institute of Economics

No 97-17, Discussion Papers from University of Copenhagen. Department of Economics

Abstract: Economic theory and empirical studies consistently support the case for free trade. With such a point of departure, the difficulties concluding the Uruguay Round of trade negotiations and the widespread use of protectionist measures in general seem paradoxical. However, through the introduction of insights from political (public choice) theory and theories of international relations in an essentially economic framework, it is possible to develop a multi-disciplinary model of trade policy behaviour which allows for a liberalist as well as a protectionist pull in international trade negotiations. Trade cooperation becomes potentially conflictual when economic gains are translated into political utility at the country level. This transformation helps explain protectionist behaviour, since the economic gains are discounted through political concern over internal distribution and relative gains vis-a-vis other countries or trading poles. The model proves well suited for organising a wide variety of determinants of trade policy behaviour around a limited number of parameters. The most important of these determinants are analysed on the basis of Uruguay Round application of the model.

Keywords: international relations; negotiations; political economy; protectionism; trade theory; trade policy; Uruguay Round; WTO (search for similar items in EconPapers)
JEL-codes: F10 F13 (search for similar items in EconPapers)
Pages: 28 pages
Date: 1997-12
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Persistent link: https://EconPapers.repec.org/RePEc:kud:kuiedp:9717

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