The role of special interests in the prolonged U.S. and European Community negotiations of agricultural policies under GATT are measured by an estimated political payoff function (PPF). The analysis searches for mutually acceptable agreements between the United States and the European Community using a world trade model coupled with game theory. Results suggest that it is in the best interest of the United States (resp. EC) for the EC (resp. US) to liberalize while the other follows the status quo. Mutual gains in PPF values to both countries are unlikely to exist without altering each country's action space. Permitting compensatory payments to the most influential groups yields liberalization, but free trade does not result.
Bibliographical noteFunding Information:
Johnson is an Economist with the Apicuhure and Trade Analysis Division of the Economic Research Service. Mahe is Chair of the Department of Economic and Social Science. Ecole Nationale Supkieure Apnomique de Rennes. Fiance. Rm is Professor of Agricultural ad Applied Economics. University of Minnesota. This research was supported by the Agriculture and Trade Analysis Division of the Economic Research Ser\;ice thrvugh a Cooperative .Q-eement and by the Center for International Food and Agricdural Policy. The views and opinions expressed herein are solely thox of the authors. Received February 1992; final draft accepted August 1992.