Fast-track authority: A hold-up interpretation

• 成果类型: Article
• 署名作者: Celik, Levent; Karabay, Bilgehan; McLaren, John
• 署名单位: City St Georges, University of London; Royal Melbourne Institute of Technology (RMIT); University of Virginia; Charles University Prague; Czech Academy of Sciences; Economics Institute of the Czech Academy of Sciences; HSE University (National Research University Higher School of Economics)
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2020.103392
• 发表日期: 2020
• 关键词: Fast-track authority; Trade policy; hold-up; Rules of origin; Trade agreements

摘要

Under Fast-Track Authority (FT), the US Congress commits to an up-or-down vote without amendments for any trade agreement presented for ratification. We interpret FT in terms of a hold-up problem. If the US negotiates an agreement with a smaller economy, businesses there may make sunk investments for the US market. At the ratification stage, the partner economy will be locked in to the US in a way it was not previously and Congress can make changes adverse to the partner, so to convince the partner to negotiate, it must first commit not to amend the agreement. FT is then Pareto-improving. (c) 2020 Elsevier B.V. All rights reserved.