Capital Ownership and the Political Economy of Free Trade Agreements
Posted: 31 Aug 2014
Date Written: 2008
This article examines the political economy of free trade agreements. It assumes that, unlike labour, capital in two countries is owned and represented by the same lobby group. Using a Heckscher-Ohlin framework, factors affecting the likelihood of political parties and lobby groups supporting free trade agreements are investigated. The effects of free trade agreements on tariffs facing non-member countries are also examined.
Keywords: Trade agreements, Endogenous trade policy
JEL Classification: F1, D7
Suggested Citation: Suggested Citation