ABSTRACT Essays on International Trade Agreements Under Monopolistic Competition

This dissertation consists of three essays exploring how trade models with monopolistic competition can help us understand and evaluate the history of domestic policy coordination in the multilateral trading system. Relative to perfect competition, imperfect competition gives rise to new cross-border concerns that governments do not internalize when setting both trade policy and domestic policy. An open question is whether these international policy externalities matter for the design of the multilateral trading system. The rst chapter develops the workhorse model for the dissertation and applies it to the evolution of subsidy rules in the multilateral trading system. Why did countries achieve a consensus to impose explicit restrictions on trade-distorting subsidies when the WTO was formed in 1995, but not decades earlier under the GATT? This chapter rationalizes the historical pattern of subsidy rules. Politically-motivated governments bene\u85t from inter-national subsidy restraints only after achieving su ¢ cient cooperation in restraining tari¤s. Once tari¤s fall, as they did in the 1950s and 1960s, governments prefer to protect domestic sales through international subsidy restraints and countervailing duties rather than to allow consumers to bene\u85t from unfettered subsidization