This paper develops a model of the trade liberalization process, featuring both international negotiation and special-interest-driven domestic politics. We show that a country may wish to adopt a policy of unilaterally reducing its tariff whenever political opposition in other countries stalls...

This paper explores the effects of preferential trade agreements (PTAs) on multilateral negotiations using a three-country, noncooperative bargaining model. PTAs are treated as outside options of the multilateral negotiation, with the feature that they continue to negotiate after they form. The...

This paper uses a model of horizontal multinational enterprises to explore the relationship between transportation costs and trade policy cooperation. Tariffs have the effect of attracting foreign direct investment to the benefit of consumers in the host country. As transport costs fall, the...

In models of economic geography, plant-level scale economies and trade costs create incentives for spatial agglomeration of production into a manufacturing core and agricultural periphery, creating regional income differentials. We examine tax competition between national governments to...

This paper advances a model of multilateral trade negotiations to analyze the effects of the most-favored-nation clause (MFN) on international trade agreements. Negotiations are modeled in a three player, non-cooperative, dynamic bargaining framework that admits the possibility of both bilateral...

This paper constructs a model of bilateral trade negotiations in the presence of political risk to demonstrate that unilateral trade liberalization may be an optimal policy for a large country. The political risk takes the form of domestic opposition to trade agreements. Unilateral...