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Strategic Trade, Competitive Industries and Agricultural Trade Disputes

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  • Kyle Bagwell
  • Robert W. Staiger

Abstract

The primary predictions of strategic‐trade theory are not restricted to imperfectly competitive markets. Indeed, these predictions emerge in a natural three‐country extension of the traditional theory of trade policy in competitive markets, once the theory is augmented to allow for politically motivated governments, so that the sign of export policy may be converted from tax to subsidy. This suggests that the ongoing agricultural trade disputes may be best interpreted from the perspective of strategic‐trade theory. In fact, these disputes may offer the most important example yet of strategic‐trade theory.

Suggested Citation

  • Kyle Bagwell & Robert W. Staiger, 2001. "Strategic Trade, Competitive Industries and Agricultural Trade Disputes," Economics and Politics, Wiley Blackwell, vol. 13(2), pages 113-128, July.
    • Handle: RePEc:bla:ecopol:v:13:y:2001:i:2:p:113-128
    DOI: 10.1111/1468-0343.00086
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    More about this item

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade

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