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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Web page: http://economics.sas.upenn.edu/pier
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- Ethier, Wilfred J., 2007.
"The theory of trade policy and trade agreements: A critique,"
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- Wilfred J. Ethier, 2002. "The Theory of Trade Policy and Trade Agreements: A Critique," PIER Working Paper Archive 06-013, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 05 Jun 2006.
- Facchini, Giovanni & van Biesebroeck, Johannes & Willmann, Gerald, 2003.
"Protection for Sale with Imperfect Rent Capturing,"
Economics Working Papers
2004,01, Christian-Albrechts-University of Kiel, Department of Economics.
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- Giovanni Facchini & Johannes Van Biesebroeck & Gerald Willmann, 2005. "Protection for Sale with Imperfect Rent Capturing," Development Working Papers 207, Centro Studi Luca d'Agliano, University of Milano.
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"Protection for Sale: An Empirical Investigation,"
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- Donald H. Regan, 2006. "What Are Trade Agreements For? -- Two Conflicting Stories Told by Economists, With a Lesson for Lawyers," Journal of International Economic Law, Oxford University Press, vol. 9(4), pages 951-988, December.
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