The politics of free-trade agreements

G. M. Grossman, E. Helpman

Research output: Contribution to journalArticlepeer-review

Abstract

Suppose that an opportunity arises for two countries to negotiate a free-trade agreement (FTA). Will an FTA between these countries be politically viable? And if so, what form will it take? The authors address these questions using a political-economy framework that emphasizes the interaction between industry special-interest groups and an incumbent government. The economic conditions necessary for an FTA to be an equilibrium outcome are described, both for the case when the agreement must cover all bilateral trade and for the case when a few politically sensitive sectors can be excluded from the agreement. -Authors

Original languageEnglish
Pages (from-to)667-690
Number of pages24
JournalAmerican Economic Review
Volume85
Issue number4
StatePublished - 1995

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