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Contesting an International Trade Agreement

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  • Matthew T. Cole
  • James Lake
  • Benjamin Zissimos

Abstract

We develop a new theoretical framework of trade agreement (TA) formation, called a ‘parallel contest’, that emphasizes the political fight over TA ratification within countries. TA ratification is inherently uncertain in each country, where anti- and pro-trade interest groups contest each other to influence their own governments’ ratification decision. Unlike prior literature, the protection embodied in negotiated TA tariffs reflects a balance between the liberalizing force of lobbying and inherently protectionist government preferences. Moreover, new international political externalities emerge that are not internalized by governments that just internalize terms of trade externalities.

Suggested Citation

  • Matthew T. Cole & James Lake & Benjamin Zissimos, 2018. "Contesting an International Trade Agreement," CESifo Working Paper Series 6956, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_6956
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    More about this item

    Keywords

    contests; international integration; trade agreement;

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration

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