Domestic Welfare Effects of Foreign Strategic Trade Policies

Strategic Interaction, Trade Policy, and National Welfare

Government’s Powers and FTAs: The Effect of Domestic and Foreign Powers on Multilateral Trade

This paper elaborates on the government's powers - both at the domestic level and over foreign countries. The domestic power is the power against domestic lobbies, and the foreign one is the government's international power. To do so, this paper tries to evaluate the effects of these powers   on the formation of free trade agreements (FTAs). The theoretical framework follows an oligopolistic-po...

A strategic and welfare theoretic analysis of free trade areas

We construct a three-country model to determine how the formation of free trade areas (FTAs) affects optimal tariffs and welfare. We find that, at constant rest of the world (ROW) tariffs, the adoption of internal free trade induces union members to reduce their external tariffs below the Kemp–Wan [J. Int. Econom. 6 (1976) 95–97] level, and causes ROW’s terms of trade to improve and its welfare...

The Influence of Policies on Trade and Foreign Direct Investment

Giuseppe Nicoletti, Dana Hajkova and Kwang-Yeol Yoo work in the OECD Economics Department; Steve Golub and Daniel Mirza are, respectively, Professor of Economics at Swarthmore College (United States) and Research Fellow at the University of Nottingham (United Kingdom), and were consultants to the OECD Economics Department when this paper was written. The authors wish to thank Sveinbjörn Blöndal...

A Comparison of Optimal Tariffs and Welfare under No Lobbying, Domestic Lobbying, and Domestic-foreign Lobbying

Whether and what type of the lobbying-induced trade policies can improve the domestic welfare? We show that as compared to the case of no lobbying and the case of domestic lobbying, the domestic-foreign lobbying achieves the lowest tariff and may also realize the highest welfare for the domestic country. Our results suggest that the domestic-foreign lobbying may contribute to a freer trade in t...