Deeper Integration and Voting on the Common European External Tariff

Tavares, Samia (2006): Deeper Integration and Voting on the Common European External Tariff.

Abstract

Since the 1987 Single European Act, the European Union has deepened its integration process. In the case of the determination of the common external tariff, deeper integration implies that the tariff reflected union-wide preferences. If integration is still shallow, though, the observed tariff will reflect the preferences of a pivotal national government. How governments voted, however, was not public information. This paper uses a unique dataset to test the deep vs. shallow integration hypothesis in an effort to shed light on how decisions are made in the EU. Results support the deep integration hypothesis.

• Item Type: MPRA Paper
• Institution: Rochester Institute of Technology
• Language: English
• Keywords: Collective decisions; deeper integration; tariffs; European Union; decisive voter
• Subjects: F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade; D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior; F - International Economics > F1 - Trade > F13 - Trade Policy ; International Trade Organizations

References

Cadot, Olivier, Jaime de Melo and Marcelo Olarreaga. (1999). “Regional Integration and Lobbying for Tariffs Against Non-Members.” International Economic Review, vol. 40 no. 3 (August), pp. 635-57.

Davidson, Russell and James G. MacKinnon. (1981). “Several Tests for Model Specification in the Presence of Alternative Hypotheses.” Econometrica, vol. 49, pp. 781-93.

European Communities (1999). Serving the European Union: A Citizen’s Guide to the Institutions of the European Union. Luxembourg: Office for Official Publications of the European Communities.

Findlay, Ronald and Stanislaw Wellisz. (1982). “Endogenous Tariffs, the Political Economy of Trade Restrictions, and Welfare.” In Jagdish Bhagwati (ed.) Import Competition and Response. Chicago: University of Chicago Press.

Greene, William H. (1997). Econometric Analysis. Upper Saddle River, NJ: Prentice Hall.

Grossman, Gene and Elhanan Helpman. (1994). “Protection for Sale.” American Economic Review, vol. 84, pp. 833-50.

Hillman, Arye L. (1982). “Declining Industries and Political-Support Protectionist Motives.” American Economic Review, vol. 72, pp. 1180-1187.

Hillman, Arye L. (1991). “Protection, Politics, and Market Structure,” in Elhanan Helpman and Assaf Razin, eds. International Trade and Trade Policy. Cambridge, MA: MIT Press.

Hillman, Arye L., Ngo Van Long, and Antoine Soubeyran. (2001). “Protection, Lobbying and Market Structure.” Journal of International Economics, vol. 54, pp. 383-409.

Hillman, Arye L. and Heinrich Ursprung. (1988). “Domestic Politics, Foreign Interests, and International Trade Policy.” American Economic Review, vol. 78, no. 4 (September 1988), pp. 729- 745.

Hine, R. C. (1985). The Political Economy of European Trade: An Introduction to the Trade Policies of the EEC. New York: St. Martin’s Press, Inc.

Lee, Jong-Wha and Philip Swagel. (1997). “Trade Barriers and Trade Flows Across Countries and Industries.” Review of Economics and Statistics, vol. 79 no. 3 (August), pp. 372-82.

Lehmann, Wilhelm. (2003). Lobbying in the European Union: Current Rules and Practices. Luxembourg, European Parliament. Marvel, Howard P. and Edward J. Ray. (1983). “The Kennedy Round: Evidence on the Regulation of International Trade in the United States.” American Economic Review, vol. 73, no. 1 (March), pp. 190-7.

Mayer, Wolfgang. (1984). “Endogenous Tariff Formation.” American Economic Review, vol. 74, no. 5 (December), pp. 970-85.

Mazey, Sonia and Jeremy Richardson (2001) “Interest Groups and EU Policy-Making: Organizational Logic and Venue Shopping,” in Jeremy Richardson (ed.) European Union, Power and Policy-Making. New York: Routledge .

Mazey, Sonia and Richardson, Jeremy, eds. (1993). Lobbying in the European Communities. Oxford: Oxford University Press.

Meunier, Sophie. (2000). “What Single Voice? European Institutions and EU-US Trade Negotiations.” International Organization, vol. 54 no. 1 (Winter), pp. 103-35.

Olarreaga, Marcelo, Isidro Soloaga and L. Alan Winters. (1999). “What’s behind Mercosur’s Common External Tariff?” World Bank Policy Research Working Paper 2231 (November).

Pecorino, Paul. (1998). “Is there a Free-Rider Problem in Lobbying? Endogenous Tariffs, Trigger Strategies, and the Number of Firms.” American Economic Review, vol. 88 no. 3 (June), pp. 652-60.

Rodrik, Dani. (1995). “Political Economy of Trade Policy.” In Gene Grossman and Kenneth Rogoff, eds. Handbook of International Economics, vol. 3. Amsterdam: North Holland.

Romer, Thomas and Howard Rosenthal. (1982). “Median Voters or Budget Maximizers: Evidence from School Expenditure Referenda.” Economic Inquiry, vol. 20 (October), pp. 556-77.

Schuknecht, Ludger. (1992). Trade Protection in the European Community. Chur: Hardwood Academic Publishers.

Tavares, Samia Costa. (2006). “The Common External Tariff in a Customs Union: Voting, Logrolling, and National Government Interests.” Mimeo.

Trefler, Daniel. (1993). “Trade Liberalization and the Theory of Endogenous Protection: An Econometric Study of U.S. Import Policy.” Journal of Political Economy, vol. 101, no. 1 (February), pp. 138-160.