We consider the purpose and design of trade agreements in imperfectly competitive environments featuring firm … have been identified, we show that the only rationale for a trade agreement is to remedy the inefficiency attributable to … the terms-of-trade externality, the same rationale that arises in perfectly competitive markets. Furthermore, and again as …

When markets are imperfectly competitive, trade policies can alter the terms of trade, shift profits from one country … light of the various ways in which trade policies may influence welfare, it might be expected that new rationales for trade … agreements would arise once imperfectly competitive markets are allowed. In this paper, we consider several trade models that …

What do trade negotiators negotiate about? There are two distinct theoretical approaches in the economics literature … that offer an answer to this question: the terms-of-trade theory and the commitment theory. The terms-of-trade theory holds … that trade agreements are useful to governments as a means of helping them escape from a terms-of-trade-driven Prisoners …

preferential trade agreements (PTAs). Should economists see this as an efficient institutional hand-off, where the WTO has carried … trade liberalization as far as it can manage, and is now passing the baton to PTAs to finish the job? We survey a growing … economics literature on international trade agreements and argue on this basis that the WTO is not passé. Rather, and subject to …

We explore in this paper the role of export subsidies when goods arriving from foreign countries are initially of … goods, consumers view price as a signal of quality, a role for export subsidies can arise. In particular, we show that … absent export subsidies, entry of high quality firms may be blocked by their inability to sell at prices reflecting their …

unions to estimate the effect of currency unions on trade using (then-) conventional gravity models. In this paper, we use a … variety of empirical gravity models to estimate the currency union effect on trade and exports, using recent data which … a smaller trade effect than other currency unions; it has a mildly stimulating effect at best. Third and most …

framework. Working within a general equilibrium trade model, we represent government preferences with a very general formulation … that includes all the major political-economy models of trade policy as special cases. Using this general framework we … trade agreements. Second, through the principle of reciprocity countries can implement efficient trade agreements if and …

of a country's trade policy decisions, and hence can deliver efficient trade-policy outcomes for its member governments … provided that the externa- lities associated with trade intervention travel through world prices. We then establish that … trading system. The introduction of free trade agreements com- plicates the way in which externalities are transmitted across …