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Contesting an International Trade Agreement

Matthew Cole (), James Lake () and Benjamin Zissimos ()

No 6956, CESifo Working Paper Series from CESifo Group Munich

Abstract: We develop a new theoretical framework of trade agreement (TA) formation, called a ‘parallel contest’, that emphasizes the political fight over TA ratification within countries. TA ratification is inherently uncertain in each country, where anti- and pro-trade interest groups contest each other to influence their own governments’ ratification decision. Unlike prior literature, the protection embodied in negotiated TA tariffs reflects a balance between the liberalizing force of lobbying and inherently protectionist government preferences. Moreover, new international political externalities emerge that are not internalized by governments that just internalize terms of trade externalities.

Keywords: contests; international integration; trade agreement (search for similar items in EconPapers)
JEL-codes: F02 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cdm, nep-gth, nep-int and nep-pol
Date: 2018
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