The Trade Agreement Embarrassment, Second Version
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.
|Date of creation:||27 May 2013|
|Date of revision:||02 Sep 2013|
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- Giovanni Facchini & Johannes Van Biesebroeck & Gerald Willmann, 2005.
"Protection for Sale with Imperfect Rent Capturing,"
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"The theory of trade policy and trade agreements: A critique,"
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- Theo Eicher & Thomas Osang, 2002. "Protection for Sale: An Empirical Investigation: Comment," American Economic Review, American Economic Association, vol. 92(5), pages 1702-1710, December.
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