IDEAS home Printed from
   My bibliography  Save this article

Strategic Trade, Competitive Industries and Agricultural Trade Disputes


  • Kyle Bagwell
  • Robert W. Staiger


The primary predictions of strategic-trade theory are not restricted to imperfectly competitive markets. Indeed, these predictions emerge in a natural three-country extension of the traditional theory of trade policy in competitive markets, once the theory is augmented to allow for politically motivated governments, so that the sign of export policy may be converted from tax to subsidy. This suggests that the ongoing agricultural trade disputes may be best interpreted from the perspective of strategic-trade theory. In fact, these disputes may offer the most important example yet of strategic-trade theory. Copyright 2001 Royal Statistical Society.

Suggested Citation

  • Kyle Bagwell & Robert W. Staiger, 2001. "Strategic Trade, Competitive Industries and Agricultural Trade Disputes," Economics and Politics, Wiley Blackwell, vol. 13(2), pages 113-128, July.
  • Handle: RePEc:bla:ecopol:v:13:y:2001:i:2:p:113-128

    Download full text from publisher

    File URL:
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    1. Grossman, Gene M & Helpman, Elhanan, 1995. "Trade Wars and Trade Talks," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 675-708, August.
    2. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-850, September.
    3. Robert W. Staiger & Kyle Bagwell, 1999. "An Economic Theory of GATT," American Economic Review, American Economic Association, vol. 89(1), pages 215-248, March.
    4. Dixit, Avinash, 1984. "International Trade Policy for Oligopolistic Industries," Economic Journal, Royal Economic Society, vol. 94(376a), pages 1-16, Supplemen.
    5. Brander, James A., 1995. "Strategic trade policy," Handbook of International Economics,in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 27, pages 1395-1455 Elsevier.
    6. Harry G. Johnson, 1953. "Optimum Tariffs and Retaliation," Review of Economic Studies, Oxford University Press, vol. 21(2), pages 142-153.
    7. Bagwell, Kyle & Staiger, Robert W., 1997. "Strategic export subsidies and reciprocal trade agreements: The natural monopoly case," Japan and the World Economy, Elsevier, vol. 9(4), pages 491-510, December.
    8. Brander, James A. & Spencer, Barbara J., 1985. "Export subsidies and international market share rivalry," Journal of International Economics, Elsevier, vol. 18(1-2), pages 83-100, February.
    9. Baldwin, Richard, 1987. "Politically realistic objective functions and trade policy PROFs and tariffs," Economics Letters, Elsevier, vol. 24(3), pages 287-290.
    10. Jonathan Eaton & Gene M. Grossman, 1986. "Optimal Trade and Industrial Policy Under Oligopoly," The Quarterly Journal of Economics, Oxford University Press, vol. 101(2), pages 383-406.
    11. Collie, David R, 1997. "Bilateralism Is Good: Trade Blocs and Strategic Export Subsidies," Oxford Economic Papers, Oxford University Press, vol. 49(4), pages 504-520, October.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Kyle Bagwell & Chad P. Bown & Robert W. Staiger, 2016. "Is the WTO Passé?," Journal of Economic Literature, American Economic Association, vol. 54(4), pages 1125-1231, December.
    2. Bastos, Paulo & Straume, Odd Rune & Urrego, Jaime A., 2013. "Rain, agriculture, and tariffs," Journal of International Economics, Elsevier, vol. 90(2), pages 364-377.
    3. Bagwell, Kyle & Staiger, Robert W., 2012. "The economics of trade agreements in the linear Cournot delocation model," Journal of International Economics, Elsevier, vol. 88(1), pages 32-46.
    4. Kyle Bagwell & Robert W. Staiger, 2004. "Subsidy Agreements," NBER Working Papers 10292, National Bureau of Economic Research, Inc.
    5. Kyle Bagwell & Robert W. Staiger, 2006. "Will International Rules on Subsidies Disrupt the World Trading System?," American Economic Review, American Economic Association, vol. 96(3), pages 877-895, June.
    6. Myrto Kalouptsidi, 2015. "One State, Many Regions: China's Fragmented Industrial Takeover," 2015 Meeting Papers 1247, Society for Economic Dynamics.
    7. Tanapong Potipiti, 2012. "Import tariffs and export subsidies in the World Trade Organization: A small-country approach," Working Papers 11912, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada..
    8. Desai, Mihir A. & Hines Jr., James R., 2008. "Market reactions to export subsidies," Journal of International Economics, Elsevier, vol. 74(2), pages 459-474, March.
    9. Giordani, Paolo E. & Rocha, Nadia & Ruta, Michele, 2016. "Food prices and the multiplier effect of trade policy," Journal of International Economics, Elsevier, vol. 101(C), pages 102-122.
    10. Meredith A. Crowley, 2006. "The agreement on subsidies and countervailing measures: tying one's hands through the WTO," Working Paper Series WP-06-22, Federal Reserve Bank of Chicago.
    11. Bagwell,K. & Staiger,R.W., 2000. "GATT-think," Working papers 19, Wisconsin Madison - Social Systems.
    12. Kyle Bagwell & Robert W. Staiger, 2016. "The Design of Trade Agreements," NBER Working Papers 22087, National Bureau of Economic Research, Inc.
    13. Paolo E. Giordani & Nadia Rocha & Michele Ruta, 2012. "Food Prices and the Multiplier Effect of Export Policy," Working Papers LuissLab 1297, Dipartimento di Economia e Finanza, LUISS Guido Carli.
    14. Fritz Breuss, 2004. "WTO Dispute Settlement: An Economic Analysis of four EU-US Mini Trade Wars," WIFO Working Papers 231, WIFO.
    15. Garmann, Sebastian, 2014. "Does globalization influence protectionism? Empirical evidence from agricultural support," Food Policy, Elsevier, vol. 49(P1), pages 281-293.
    16. Hillman, Arye L., 2003. "Departure from Free Trade: A Survey," CEPR Discussion Papers 3707, C.E.P.R. Discussion Papers.
    17. Reimer, Jeffrey J. & Stiegert, Kyle W., 2006. "Evidence on Imperfect Competition and Strategic Trade Theory," Staff Paper Series 498, University of Wisconsin, Agricultural and Applied Economics.
    18. Basak Bayramoglu & Brian Copeland & Jean-François Jacques, 2016. "Trade and Fisheries Subsidies," Working Papers 2016.08, FAERE - French Association of Environmental and Resource Economists.

    More about this item

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ecopol:v:13:y:2001:i:2:p:113-128. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.