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Tariff bindings and bilateral cooperation on export cartels

In: Economic Analysis of the Rules and Regulations of the World Trade Organization

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  • Bernard Hoekman
  • Kamal Saggi

Abstract

Despite the negative international externalities that they generate, export cartels are legal in many countries. We use a repeated game approach to analyze cooperation between a low-income country (LIC) and its high-income country (HIC) trade partner where the HIC agrees to prevent its industry from organizing as an export cartel in return for a combination of improved market access (i.e. a tariff reduction) and a transfer from the LIC. If the LIC is subject to a tariff binding (say because of an existing trade agreement), the transfer it pays to the HIC increases and the scope for bilateral cooperation declines.

Suggested Citation

  • Bernard Hoekman & Kamal Saggi, 2018. "Tariff bindings and bilateral cooperation on export cartels," World Scientific Book Chapters, in: Kamal Saggi (ed.), Economic Analysis of the Rules and Regulations of the World Trade Organization, chapter 12, pages 283-298, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789813233058_0012
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    Cited by:

    1. Nuno Limão & Kamal Saggi, 2018. "Tariff retaliation versus financial compensation in the enforcement of international trade agreements," World Scientific Book Chapters, in: Policy Externalities and International Trade Agreements, chapter 12, pages 337-349, World Scientific Publishing Co. Pte. Ltd..
    2. Gnutzmann, Hinnerk & Spiewanowski, Piotr, 2016. "Did the Fertilizer Cartel Cause the Food Crisis?," VfS Annual Conference 2016 (Augsburg): Demographic Change 145777, Verein für Socialpolitik / German Economic Association.
    3. Saggi, Kamal, 2007. "Intellectual Property Provisions in North-South Trade Agreements," CEPR Discussion Papers 6460, C.E.P.R. Discussion Papers.
    4. Hoekman, Bernard & Mattoo, Aaditya, 2008. "Services trade and growth," Policy Research Working Paper Series 4461, The World Bank.
    5. Ederington,Josh & Ruta,Michele, 2016. "Non-tariff measures and the world trading system," Policy Research Working Paper Series 7661, The World Bank.

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    More about this item

    Keywords

    Multilateral Trading System; Trade Agreements; Trade Liberalization; International Tariff Cooperation; WTO Disputes; Case Studies;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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