Giovanni Maggi, Yale University
Presenter: Giovanni Maggi, Yale University
Paper: Are Trade Agreements Good for You?
Abstract: We examine how trade agreements affect global welfare when they are influenced by producer lobbies. A “shallow” agreement that deals only with trade policies tends to be good for welfare, as it pits exporter lobbies against import-competing lobbies, and the welfare gain from such agreements is higher when overall lobbying pressures are stronger. But the impacts of “deep” agreements that focus on domestic policies are very different. When a deep agreement deals with consumption-side policies such as consumption taxes or product standards, it tends to be bad for welfare, with the welfare loss increasing in lobbying pressures. On the other hand, when a deep agreement deals with production-side policies such as production taxes or regulations, it tends to be good for welfare, and in this case lobbies have a positive influence on the agreement.
The International Economics Seminar series is presented jointly with the Walsh School of Foreign Service and the Economics Department of Georgetown University.