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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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  1. Karol, David, 2000. "Divided Government and U.S.Trade Policy: Much Ado About Nothing?," International Organization, Cambridge University Press, Cambridge University Press, vol. 54(04), pages 825-844, September.
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  4. Grossman, Gene M & Helpman, Elhanan, 1995. "Trade Wars and Trade Talks," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 103(4), pages 675-708, August.
  5. Christian Broda & N. Limao & D. Weinstein, 2006. "Optimal Tariffs: The Evidence," 2006 Meeting Papers, Society for Economic Dynamics 381, Society for Economic Dynamics.
  6. 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.
  7. Lohmann, Susanne & O'Halloran, Sharyn, 1994. "Divided government and U.S. trade policy: theory and evidence," International Organization, Cambridge University Press, Cambridge University Press, vol. 48(04), pages 595-632, September.
  8. Mayer, Wolfgang, 1981. "Theoretical Considerations on Negotiated Tariff Adjustments," Oxford Economic Papers, Oxford University Press, vol. 33(1), pages 135-53, March.
  9. 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.
  10. Segendorff, Bjorn, 1998. "Delegation and Threat in Bargaining," Games and Economic Behavior, Elsevier, vol. 23(2), pages 266-283, May.
  11. 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.
  12. Putnam, Robert D., 1988. "Diplomacy and domestic politics: the logic of two-level games," International Organization, Cambridge University Press, Cambridge University Press, vol. 42(03), pages 427-460, June.
  13. 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.
  14. 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.
  15. Robert C. Feenstra, 1996. "U.S. Imports, 1972-1994: Data and Concordances," NBER Working Papers 5515, National Bureau of Economic Research, Inc.
  16. 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.
  17. 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.
  18. 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.
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Citations

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Cited by:
  1. Giovanni Facchini & Peri A. Silva & Gerald Willmann, 2008. "The Customs Union Issue: Why do we Observe so few of them?," CESifo Working Paper Series 2426, CESifo Group Munich.
  2. Conconi, Paola & Facchini, Giovanni & Steinhardt, Max Friedrich & Zanardi, Maurizio, 2012. "The political economy of trade and migration: Evidence from the US Congress," HWWI Research Papers 136, Hamburg Institute of International Economics (HWWI).
  3. Conconi, Paola & Facchini, Giovanni & Zanardi, Maurizio, 2011. "Policymakers' Horizon and Trade Reforms," CEPR Discussion Papers, C.E.P.R. Discussion Papers 8561, C.E.P.R. Discussion Papers.
  4. Barbara Dluhosch & Nikolai Ziegler, 2011. "The paradox of weakness in the politics of trade integration," Constitutional Political Economy, Springer, Springer, vol. 22(4), pages 325-354, December.
  5. Marco Fugazza & Frédéric Robert-Nicoud, 2010. "The 'emulator effect' of the Uruguay round on US regionalism," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 28723, London School of Economics and Political Science, LSE Library.
  6. 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.
  7. 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.
  8. James Lake & Daniel L. Millimet, 2014. "An Empirical Analysis of Trade-Related Redistribution and the Political Viability of Free Trade," Departmental Working Papers 1405, Southern Methodist University, Department of Economics.

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