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1、ReviewofInternationalEconomics,22(3),561577,2014DOI:10.1111/roie.12123EndogenousFreeTradeAgreementsandForeignLobbyingAndreyStoyanov*AbstractThispaperassessesthepoliticalviabilityoffreetradeagreements(FTAs)inthepresenceoflobbyingbyorganizedforeigninterestgroups.Theassessmentisbasedon
2、amodelinwhichexternaltariffsandthedeci-siontoformanFTAareendogenouslydetermined.TheTndingsdemonstratethat,inthepresenceofanorganizedlobbygroupinaprospectivepartnercountry,anFTAmayinitiateanincreaseinthelevelofpro-tectionagainstimportsfromthirdcountriesandimpedetradewithnon-membercou
3、ntries.Further,thisstudyTndsthataforeignlobbymayencouragethelocalgovernmenttoenterawelfare-reducingtrade-divertingFTA.Finally,thispapershowsthatanFTAincreasesthelobbyingpoweroftheorganizedlobbygroupsofthemembercountries,whichcanpotentiallyobstructtheviabilityofwelfare-improvingmulti
4、lat-eraltradeliberalization.1.IntroductionRegionaltradeagreements(RTAs)havebecomethemostpreferablemodeoftradeliberalizationformanycountriessincethecompletionoftheUruguayRoundoftheWorldTradeOrganizationnegotiations.Inmanycases,regionalfreetradetalksareinitiatedbyprivatebusinessgroups
5、fromoneoftheproposedRTAmembercountriesandthennegotiatorsfromallsidesbegintoworkoutthedetailsofthepotentialtradeagreement.Notsurprisingly,thesebusinessgroupsareoftenactivelyinvolvedintradenegotiations,andtheylobbyfortraderegimesmorefavorabletotheirinterests.Moreover,sinceanRTAmustbes
6、upportedbyallofitsmembers,specialinterestgroupscanlobbygovernmentsfromothercountriesinvolvedintheproposedagree-mentfororagainstfreetrade,eitherdirectlyorindirectlythroughtheirhomecoun-try?sgovernment.Asaresult,manytradeagreementsareformedinthepresenceofpoliticalpressurefromtheprospe
7、ctivepartnercountryindustries.Thispaperanalyzeswhattypesofagreementsaremorelikelytobeformedwhenspecialinterestgroupsbecomeinvolvedintheregionalfreetradetalks.Toanswerthisquestion,Iintroducethepossibilityofforeignlobbyingintoaconventionalpoliticaleconomymodelofafreetradeagreement(FTA
8、),similartoGrossman
