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During the past half century multilateral trade liberalization has reduced tariffs to historically low levels. The Received Theory of trade policy, based solely on terms-of-trade externalities between national governments, offers an explanation that has become the conventional wisdom among international trade theorists. This paper uses a simple version of the Grossman-Helpman Protection-for-Sale Model (a central example of the Received Theory) to examine the consistency of the implications of this theory with actual trade policy. The conclusion is that the theory is dramatically inconsistent with reality. Furthermore, terms-of-trade externalities - the central component of the Received Theory - are the sole cause of this inconsistency. Empirical work seeming to confirm the Protection-for-Sale model actually does not do that, but instead offers support for a generic political-economy view of trade policy. [Copyright 2007 Elsevier B.V.]

This paper addresses a complex of globalization issues: the effect of globalization on the skill premium; the effect of globalization on unemployment; the relative importance of globalization and exogenous technical change; the effect of globalization on the ability of national governments to conduct independent social policies. Thinking about these topics has been dominated by a large empirical literature concluding that trade has played a relatively minor role in the rise of the skill premium, while exogenous skill-biased technical change has played a major role. This paper replaces the focus on inter-sectoral substitution at the heart of the Stolper-Samuelson theorem with attention to intra-sectoral relations between inputs. Specifically, I assume that out-sourcing and unskilled labor are highIy substitutable and that equipment and skilIed labor are complementary , that production methods are flexible, and that the country undertaking out-sourcing has a significantIy different structure from that providing it. Globalization then offers a simple and immediate possible explanation for the prominent stylized facts regarding the emergence of the skill premium and for the presence of skill-biased technical change. Trade vs. technology remains as an empirical issue, though, because exogenous neutral technological change offers an alter-native possible explanation.

This paper addresses the interplay between unilateralism and multilateralism. I first describe theirrespective stylized facts. I next present a simple, multi-country model with high initial tariffbarriers and with the features that have always been of paramount concern to policymakers, allowgovernments to negotiate multilateral agreements, and analyze the resulting equilibrium. I thenconsider the possibility of unilateralism and find a role for a system with features remarkablysimilar to contemporary unilateralism. The relationships between multilateralism and unilateralismare subtle: Unilateralism has the properties it has because the world is multilateral (the insurancetriangle); to be useful unilateralism requires a multilateral component of some type; this typeresults from a basic compatibility problem between those who negotiate multilaterally and thosewho establish unilateralism.

This paper points out that the General Agreement on Tariffs & Trade (GATT)/World Trade Organization (WTO) trade liberalization possesses very special characteristics. I argue that these characteristics are responses to a set of problems inherent to contemporary trade liberalization. This is not a matter of mere historical interest. These problems remain very much with us, & recognition of this fact should influence our approach to future trade negotiations. 30 References. Adapted from the source document.