Are Trade Agreements Good for You?

49 Pages Posted: 2 Jun 2020 Last revised: 19 Jun 2022

See all articles by Giovanni Maggi

Giovanni Maggi

Yale University; Brazilian School of Economics and Finance; National Bureau of Economic Research (NBER)

Ralph Ossa

University of Zurich - Department of Economics; Centre for Economic Policy Research (CEPR)

Date Written: May 2020

Abstract

We examine how deep agreements on domestic regulations affect welfare in a world where such agreements are influenced by producer lobbies. The answer to this question depends in a critical way on whether the agreement focuses on product standards or on production regulations. International cooperation on product standards can decrease welfare, and this is more likely to happen when producer lobbies are stronger. On the other hand, international cooperation on production regulations tends to enhance welfare when lobbying pressures are strong. A key determinant of the welfare impact of deep agreements is whether the interests of producer lobbies in different countries are aligned or in conflict: the former situation tends to occur in the case of product standards, while the latter situation tends to occur in the case of production regulations.

Suggested Citation

Maggi, Giovanni and Ossa, Ralph, Are Trade Agreements Good for You? (May 2020). NBER Working Paper No. w27252, Available at SSRN: https://ssrn.com/abstract=3615448

Giovanni Maggi (Contact Author)

Yale University ( email )

493 College St
New Haven, CT CT 06520
United States

Brazilian School of Economics and Finance

RJ 22250
Rio de Janeiro
Brazil

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Ralph Ossa

University of Zurich - Department of Economics ( email )

Zürich
Switzerland

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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