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Contesting an International Trade Agreement

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

No 1703, Working Papers from California Polytechnic State University, Department of Economics

Abstract: After governments sign an international trade agreement (TA), each government must ratify the TA. Often, this ratification process is lengthy and the outcome highly uncertain. We model a two-country TA where, unlike prior literature, pro-trade and anti-trade interest groups in each country recognize that (i) TA implementation requires ratification by both governments and (ii) they cannot condition contributions on their government's ratification decision. In this new class of contests, which we call 'parallel contests', we show that (i) anti- and pro-trade lobbies lobby in equilibrium, (ii) the probability of TA ratification lends itself to intuitive and tractable comparative statics, and (iii) the protection embodied in negotiated TA tariffs reflects a tension between the liberalizing force of lobbying and inherently protectionist government preferences.

Keywords: Contests; Trade Agreements; Lobbying (search for similar items in EconPapers)
JEL-codes: F02 F12 F13 D44 D72 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cdm, nep-int, nep-mic and nep-pol
Date: 2017
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Working Paper: Contesting an International Trade Agreement (2018) Downloads
Working Paper: Contesting an international trade agreement (2018) Downloads
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