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The Trade-Agreement Embarrassment

Author

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  • Ethier , Wilfred J.

    () (University of Pennsylvania)

Abstract

The dominant academic literature about trade agreements maintains that they are only about national terms-of-trade manipulation and not at all about purely political concerns. Non-academic economists, commentators, and diplomats by contrast think that trade agreements are all about political concerns. There are two substantive and important distinctions between the two views. i Practitioners maintain that policymakers care virtually not at all about the terms of trade or about trade-tax revenue. ii Practitioners, unlike academics, maintain that trade-agreement negotiations themselves change the underlying political economy. Observation of actual trade policy measures, though not conclusive, suggests that the practitioners are right and that the academics are wrong.

Suggested Citation

  • Ethier , Wilfred J., 2013. "The Trade-Agreement Embarrassment," East Asian Economic Review, Korea Institute for International Economic Policy, vol. 17(3), pages 243-260, September.
  • Handle: RePEc:ris:eaerev:0053
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    File URL: http://dx.doi.org/10.11644/KIEP.JEAI.2013.17.3.265
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    Citations

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    Cited by:

    1. Gene M. Grossman, 2016. "The Purpose of Trade Agreements," NBER Working Papers 22070, National Bureau of Economic Research, Inc.
    2. Jaime DE MELO & Marcelo OLARREAGA, 2017. "Trade Related Institutions and Development," Working Papers P199, FERDI.
    3. Wilfred J. Ethier & Arye L. Hillman, 2017. "The Politics of International Trade," CESifo Working Paper Series 6456, CESifo Group Munich.

    More about this item

    Keywords

    Multilateralism; Standard Academic Model; Practitioners Conventional Wisdom; Terms of Trade; Political Economy;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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