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Fast-Track Authority and International Trade Negotiations

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  • Paola Conconi
  • Giovanni Facchini
  • Maurizio Zanardi

Abstract

We develop a simple model of trade relations in which legislators with different stakes in import-competing and export industries decide whether to grant fast-track authority (FTA) to the president, giving up the power to amend international trade agreements. We show that strategic delegation motives are key to understanding FTA votes, which involve a decision between alternative country representatives: the executive or the majority in Congress. We then examine the determinants of all votes by US congressmen on FTA since the introduction of this institutional procedure in 1974. Our empirical analysis provides strong support for the predictions of the model. (JEL D72, F12, F13)

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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Journal: Economic Policy.

Volume (Year): 4 (2012)
Issue (Month): 3 (August)
Pages: 146-89

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Handle: RePEc:aea:aejpol:v:4:y:2012:i:3:p:146-89

Note: DOI: 10.1257/pol.4.3.146
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References

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  1. Christian Broda & N. Limao & D. Weinstein, 2006. "Optimal Tariffs: The Evidence," 2006 Meeting Papers 381, Society for Economic Dynamics.
  2. Douglas A. Irwin, 1998. "From Smoot-Hawley to Reciprocal Trade Agreements: Changing the Course of U.S. Trade Policy in the 1930s," NBER Chapters, in: The Defining Moment: The Great Depression and the American Economy in the Twentieth Century, pages 325-352 National Bureau of Economic Research, Inc.
  3. Grossman, Gene M. & Helpman, Elhanan, 1995. "Trade Wars and Trade Talks," Scholarly Articles 3450062, Harvard University Department of Economics.
  4. Jones, Stephen R. G., 1989. "Have your lawyer call my lawyer : Bilateral delegation in bargaining situations," Journal of Economic Behavior & Organization, Elsevier, vol. 11(2), pages 159-174, March.
  5. Glaeser, Edward L. & Ward, Bryce A., 2006. "Myths and Realities of American Political Geography," Working Paper Series rwp06-007, Harvard University, John F. Kennedy School of Government.
  6. Lohmann, Susanne & O'Halloran, Sharyn, 1994. "Divided government and U.S. trade policy: theory and evidence," International Organization, Cambridge University Press, vol. 48(04), pages 595-632, September.
  7. Robert C. Feenstra, 1997. "U.S. Exports, 1972-1994: With State Exports and Other U.S. Data," NBER Working Papers 5990, National Bureau of Economic Research, Inc.
  8. Robert C. Feenstra & John Romalis & Peter K. Schott, 2002. "U.S. Imports, Exports, and Tariff Data, 1989-2001," NBER Working Papers 9387, National Bureau of Economic Research, Inc.
  9. Mayer, Wolfgang, 1981. "Theoretical Considerations on Negotiated Tariff Adjustments," Oxford Economic Papers, Oxford University Press, vol. 33(1), pages 135-53, March.
  10. Levy, Philip I., 1999. "Lobbying and international cooperation in tariff setting," Journal of International Economics, Elsevier, vol. 47(2), pages 345-370, April.
  11. Segendorff, Bjorn, 1998. "Delegation and Threat in Bargaining," Games and Economic Behavior, Elsevier, vol. 23(2), pages 266-283, May.
  12. Grossman, Gene M. & Helpman, Elhanan, 2004. "A Protectionist Bias in Majoritarian Politics," Papers 12-21-2004, Princeton University, Research Program in Political Economy.
  13. Putnam, Robert D., 1988. "Diplomacy and domestic politics: the logic of two-level games," International Organization, Cambridge University Press, vol. 42(03), pages 427-460, June.
  14. Magee, Christopher, 2001. "Administered protection for workers: an analysis of the trade adjustment assistance program," Journal of International Economics, Elsevier, vol. 53(1), pages 105-125, February.
  15. Edward L. Glaeser & Bryce A. Ward, 2006. "Myths and Realities of American Political Geography," Journal of Economic Perspectives, American Economic Association, vol. 20(2), pages 119-144, Spring.
  16. Edward L. Glaeser & Bryce A. Ward, 2006. "Myths and Realities of American Political Geography," Harvard Institute of Economic Research Working Papers 2100, Harvard - Institute of Economic Research.
  17. Karol, David, 2000. "Divided Government and U.S.Trade Policy: Much Ado About Nothing?," International Organization, Cambridge University Press, vol. 54(04), pages 825-844, September.
  18. Robert C. Feenstra, 1996. "U.S. Imports, 1972-1994: Data and Concordances," NBER Working Papers 5515, National Bureau of Economic Research, Inc.
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Citations

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Cited by:
  1. Marco Fugazza & Frédéric Robert-Nicoud, 2010. "The 'Emulator Effect' of the Uruguay Round on US Regionalism," CEP Discussion Papers dp0973, Centre for Economic Performance, LSE.
  2. Steinhardt, Max & Conconi, Paola & Facchini, Giovanni & Zanardi, Maurizio, 2013. "The political economy of trade and migration:Evidence from the U.S. Congress," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79961, Verein für Socialpolitik / German Economic Association.
  3. Lisa Grazzini & Alessandro Petretto, 2013. "Federalism with Bicameralism," Working Papers - Economics wp2013_01.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
  4. Paola Conconi & Giovanni Facchini & Maurizio Zanardi, 2011. "Policymakers’ Horizon and Trade Reforms," Development Working Papers 311, Centro Studi Luca d\'Agliano, University of Milano.
  5. Lake, James & Millimet, Daniel L., 2014. "An Empirical Analysis of Trade-Related Redistribution and the Political Viability of Free Trade," IZA Discussion Papers 8086, Institute for the Study of Labor (IZA).
  6. Barbara Dluhosch & Nikolai Ziegler, 2011. "The paradox of weakness in the politics of trade integration," Constitutional Political Economy, Springer, vol. 22(4), pages 325-354, December.
  7. Giovanni Facchini & Peri Silva & Gerald Willmann, 2008. "The Customs Union issue: Why do we observe so few of them?," Center for Economic Studies - Discussion papers ces0827, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
  8. Giovanni Facchini & Tommaso Frattini & Cora Signorotto, 2013. "Mind What Your Voters Read: Media Exposure and International Economic Policy Making," Development Working Papers 358, Centro Studi Luca d\'Agliano, University of Milano.

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