Issue Linking in Trade Negotiations: Ricardo Revisited or No Pain No Gain
AbstractThere has been much discussion about what issues should be included in international "trade" negotiations. Different countries, firms, and activist groups have quite different views regarding which items should (or should not) be negotiated together. Proposals run the gamut from no linking to linking trade with investment, the environment, labor, and human rights codes. This paper provides a formal framework for analyzing this question. It employs a two-country, two-issue bargaining model and contrasts outcomes when issues are negotiated separately and when they are linked in some form. A key concept is "comparative interest," analogous to Ricardian comparative advantage. We provide general results and note, in particular, where a country can benefit by agreeing to include an agenda item for which, when viewed by itself, the country does not receive a positive payoff. We also provide an application of our analysis to negotiations on trade liberalization and environmental protection. Copyright Blackwell Publishing Ltd 2005..
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Review of International Economics.
Volume (Year): 13 (2005)
Issue (Month): 2 (05)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0965-7576
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- Johanna Goertz, 2011. "Omnibus or not: package bills and single-issue bills in a legislative bargaining game," Social Choice and Welfare, Springer, vol. 36(3), pages 547-563, April.
- Barbara Dluhosch & Nikolai Ziegler, 2011. "The paradox of weakness in the politics of trade integration," Constitutional Political Economy, Springer, vol. 22(4), pages 325-354, December.
- Horn, Henrik & Mavroides, Petros C., 2013. "Multilateral Environmental Agreements in the WTO: Silence Speaks Volumes," Working Paper Series 983, Research Institute of Industrial Economics.
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