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The Economics of Special and Differential Trade Regimes

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  • Conconi, Paola
  • Perroni, Carlo

Abstract

We examine the theoretical rationale for the simultaneous granting of temporary Special and Differential (S&D) treatment to developing countries - both in ite protection and market-access components - under the WTO agreements. S&D rules constitute the centrepiece of the WTO’s strategy for integrating developing countries into the trading system, but have been criticized–both on theoretical and empirical grounds–as being ineffective. We show that seemingly non-reciprocal, limited-duration S&D treatment can be rationalized as a transitional equilibrium feature of a self-enforcing international agreement between a large developed and a small developing country, where the two sides have a joint interest in helping the developing country to overcome a policy commitment problem.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4508.

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Date of creation: Jul 2004
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Handle: RePEc:cpr:ceprdp:4508

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Keywords: international agreements; policy commitment; trade and development;

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Cited by:
  1. Paola Conconi & Carlo Perroni, 2012. "Conditional versus unconditional trade concessions for developing countries," Canadian Journal of Economics, Canadian Economics Association, vol. 45(2), pages 613-631, May.
  2. Harun Onder, 2009. "Starting Small in Free Trade Agreements," Working Papers 0905, Florida International University, Department of Economics.
  3. Zissimos, Ben, 2007. "The GATT and gradualism," Journal of International Economics, Elsevier, vol. 71(2), pages 410-433, April.

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