American Economic Journal: Microeconomics
no. 3, August 2015
With fast-track authority (FTA), the US Congress delegates trade policy authority to the president by committing not to amend a trade agreement. Why would it cede such power? We suggest an interpretation in which Congress uses FTA to forestall destructive competition between its members for protectionist rents. In our model: (i) FTA is never granted if an industry operates in the majority of districts; (ii) The more symmetric the industrial pattern, the more likely is FTA, since competition for protectionist rents is most punishing when bargaining power is symmetrically distributed; (iii) Widely disparate initial tariffs prevent free trade even with FTA. (JEL C78, D72, F13, F14)
Celik, Levent, Bilgehan Karabay, and John McLaren.
"When Is It Optimal to Delegate: The Theory of Fast-Track Authority."
American Economic Journal: Microeconomics,
Bargaining Theory; Matching Theory
Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
Trade Policy; International Trade Organizations
Empirical Studies of Trade