 Political economy of trade policy within free trade agreementsAndrey Stoyanov Chapter 31 in Elgar Encyclopedia of International Trade, 2026, pp 158-161 from Edward Elgar Publishing Abstract: This entry discusses the interaction between free trade agreements (FTAs) and political economy forces, focusing on how FTAs affect lobbying and trade policy outcomes. FTAs reduce internal tariffs but also create new incentives for domestic and foreign lobbies to shape external tariff policy. Evidence shows that lobbying affects the timing of tariff reductions, the persistence of protection for politically powerful industries, and the external tariff schedules applied to non-members. The discussion highlights three key mechanisms. First, FTAs weaken domestic lobbying through a rent-destruction effect: by eliminating internal tariffs, they reduce the gains from protection and weaken incentives to push for high external tariffs. Second, FTAs reshape cross-border lobbying: firms from member countries, once granted preferential access, often pressure partner governments to raise external tariffs against non-members. Third, large economies may use external tariffs strategically: by keeping them high, they increase the value of preferential access and extract concessions beyond trade. Keywords: Free Trade Agreements (FTAs); Political economy; Lobbying; Tariffs (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:elg:eechap:23076_32 Ordering information: This item can be ordered from Access Statistics for this chapter More chapters in Chapters from Edward Elgar Publishing |
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