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The Politics of Free Trade Agreements

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Author Info

  • Grossman, G.M.
  • Helpman, E.

Abstract

Suppose that an opportunity arises for two countries to negotiate a free-trade agreement. Will a free-trade agreement between these countries be politically viable and, if so, what form will it take? The authors address these questions using a political-economy framework that emphasizes the interaction between industry special-interest groups and an incumbent government. They describe the economic conditions necessary for a free-trade agreement to be an equilibrium outcome, both for the case when the agreement must cover all bilateral trade and for the case when a few politically sensitive sectors can be excluded from the agreements. Copyright 1995 by American Economic Association.

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Bibliographic Info

Paper provided by Tel Aviv in its series Papers with number 14-93.

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Length: 47 pages
Date of creation: 1993
Date of revision:
Handle: RePEc:fth:teavfo:14-93

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Postal: Israel TEL-AVIV UNIVERSITY, THE FOERDER INSTITUTE FOR ECONOMIC RESEARCH, RAMAT AVIV 69 978 TEL AVIV ISRAEL.
Phone: 972-3-640-9255
Fax: 972-3-640-5815
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Web page: http://econ.tau.ac.il/research/foerder.asp
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Keywords: trade ; exchange rate ; free trade ; trade policy ; political economy;

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References

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  1. Bernheim, B Douglas & Whinston, Michael D, 1986. "Menu Auctions, Resource Allocation, and Economic Influence," The Quarterly Journal of Economics, MIT Press, vol. 101(1), pages 1-31, February.
  2. Grossman, Gene & Helpman, Elhanan, 1993. "Trade Wars and Trade Talks," CEPR Discussion Papers 806, C.E.P.R. Discussion Papers.
  3. Bernheim, B. Douglas & Peleg, Bezalel & Whinston, Michael D., 1987. "Coalition-Proof Nash Equilibria I. Concepts," Journal of Economic Theory, Elsevier, vol. 42(1), pages 1-12, June.
  4. Gene M. Grossman & Elhanan Helpman, 1992. "Protection For Sale," NBER Working Papers 4149, National Bureau of Economic Research, Inc.
  5. Hirschman,Albert O., 1981. "Essays in Trespassing," Cambridge Books, Cambridge University Press, number 9780521282437, October.
  6. Ken Binmore & Ariel Rubinstein & Asher Wolinsky, 1986. "The Nash Bargaining Solution in Economic Modelling," RAND Journal of Economics, The RAND Corporation, vol. 17(2), pages 176-188, Summer.
  7. Anne O. Krueger, 1993. "Free Trade Agreements as Protectionist Devices: Rules of Origin," NBER Working Papers 4352, National Bureau of Economic Research, Inc.
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  1. > International Economics > International Trade
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