Trading Interests: Domestic Institutions, International Negotiations, and the Politics of Trade

To explain trade policies, a large literature draws on domestic institutions. Institutions that are more responsive to narrow-interest groups are expected to succumb to protectionist demands, resulting in higher average tariffs. This literature has largely ignored the role of reciprocal trade agreements and of exporter interests. This joint omission results in a biased view of trade politics. Exporters benefit from expanding market access abroad. With reciprocity, they lobby for domestic tariff cuts in exchange for liberalization abroad, which alters the link between domestic institutions and trade policies. Institutions favoring narrow interests should privilege both protectionist groups and exporters and hence have an indeterminate effect on average tariff levels. Instead, more interest group influence should result in more dispersed tariff rates across products. This article provides empirical evidence for this proposition, helps reconcile existing findings in the literature, and offers a specific example of how international institutions affect domestic politics.