Papers Published in World Economics:
Negotiating Trade
If unilateral free trade is the best policy, then why are international treaties
needed to achieve it? The reason may be found in the Becker theory of
competition among political pressure groups. By entering wide-ranging
negotiations, nations shift the political question from one of protecting a single
industry to one of protecting many industries. This makes it less likely that a
narrow interest in favour of protection will prevail over the general national
interest in favour of free trade. Economy-wide negotiations frame the question of
free trade versus protection in a way that favours free trade. Although Becker’s
theory points to an inherent bias in favour of the political success of economically
efficient policies, the force of his theory is most evident in the possibly rare
instances in which that bias is in fact overcome. Two examples are the special
conditions attaching to Japan’s accession to the GATT and the US protectionist
response to Japan’s rising imports.
Read Full Paper >