The sustainable cooperative tariffs: a political economy perspective

Racem Mehdi ()
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Racem Mehdi: CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, ESSECT - Ecole Supérieure des Sciences Economiques et Commerciales de Tunis - Université de Tunis

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Abstract: The purpose of this paper is to examine the international trade cooperation in order to determine the sustainable cooperative tariff rates in a political economy perspective. This paper establishes a tariff-setting game among two countries as a two-phase game : negotiation phase and implementation phase. Our results show the following points. First, the sustainable cooperative tariff rate depends on the political weight placed by government on domestic import-competing industry, on the political influence of the foreign export industry and on the economic stakes of domestic tariff policy in these two sectors. Second, international cooperation is sustainable when governments involved in tariff negotiation are patient enough. Third, difference in patience affects the relative bargaining power of governments.

Keywords: Trade negotiation; political economy; repeated game.; Négociation commerciale; économie politique; jeu répété.; repeated game (search for similar items in EconPapers)
Date: 2008-03
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00261577
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Published in 2008

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00261577

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