Trade Wars and Trade Talks

Gene Grossman and Elhanan Helpman

No 806, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Whether governments clash in trade disputes or negotiate over trade agreements, their actions in the international arena reflect political conditions back home. Previous studies of cooperative and non-cooperative trade relations have focused on governments that are immune from political pressures and act as benevolent servants of the public interest. Here we take a first step towards introducing domestic politics into the analysis of international economic relations. We study the interactions between national leaders who are concerned both with providing a high standard of living to the general electorate and collecting campaign contributions from special interest groups. The analysis reveals the determinants of the structure of protection in a non-cooperative trade war and in a cooperative trade agreement.

Keywords: Political Economy; Tariff Wars; Trade Negotiations; Trade Policy (search for similar items in EconPapers)
JEL-codes: D72 F13 (search for similar items in EconPapers)
Date: 1993-05
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Citations: View citations in EconPapers (12)

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Related works:
Journal Article: Trade Wars and Trade Talks (1995)
Working Paper: Trade Wars and Trade Talks (1995)
Working Paper: Trade Wars and Trade Talks (1993)
Working Paper: Trade Wars and Trade Talks (1993)
Working Paper: Trade Wars and Trade Talks (1993)
Working Paper: Trade Wars and Trade Talks (1992)
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