Contesting an International Trade Agreement

62 Pages Posted: 24 May 2018

See all articles by Matthew T. Cole

Matthew T. Cole

Florida International University (FIU)

James Lake

Southern Methodist University (SMU) - Department of Economics

Benjamin Zissimos

University of Exeter Business School

Date Written: April 09, 2018

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.

Keywords: contests, international integration, trade agreement

JEL Classification: F020

Suggested Citation

Cole, Matthew T. and Lake, James and Zissimos, Benjamin, Contesting an International Trade Agreement (April 09, 2018). CESifo Working Paper Series No. 6956, Available at SSRN: https://ssrn.com/abstract=3180502 or http://dx.doi.org/10.2139/ssrn.3180502

Matthew T. Cole

Florida International University (FIU) ( email )

University Park
11200 SW 8th Street
Miami, FL 33199
United States

James Lake

Southern Methodist University (SMU) - Department of Economics ( email )

Dallas, TX 75275
United States

Benjamin Zissimos (Contact Author)

University of Exeter Business School ( email )

Streatham Court
Xfi Building, Rennes Dr.
Exeter, EX4 4JH
United Kingdom

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