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Unilateralism in a Multilateral World

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Author Info
Wilfred J. Ethier () (University of Pennsylvania)

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Abstract

This paper addresses the interplay between unilateralism and multilateralism. I first describe their respective stylized facts. I next present a simple, multi-country model with high initial tariff barriers and with the features that have always been of paramount concern to policymakers, allow governments to negotiate multilateral agreements, and analyze the resulting equilibrium. I then consider the possibility of unilateralism and find a role for a system with features remarkably similar to contemporary unilateralism. The relationships between multilateralism and unilateralism are subtle: Unilateralism has the properties it has because the world is multilateral (the insurance triangle); to be useful unilateralism requires a multilateral component of some type; this type results from a basic compatibility problem between those who negotiate multilaterally and those who establish unilateralism.

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Publisher Info
Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 01-033/2.

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Date of creation: 30 Mar 2001
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Handle: RePEc:dgr:uvatin:20010033

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Web page: http://www.tinbergen.nl/

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Related research
Keywords: Unilateralism; multilateralism; administered protection; insurance triangle; multilateral component; compatibility problem;

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Find related papers by JEL classification:
F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Tharakan, P. K. M. & Waelbroeck, J., 1994. "Antidumping and countervailing duty decisions in the E.C. and in the U.S.: An experiment in comparative political economy," European Economic Review, Elsevier, vol. 38(1), pages 171-193, January. [Downloadable!] (restricted)
  2. Ethier, Wilfred J & Horn, Henrik, 1996. "Results-Oriented Trade Policy," Review of International Economics, Blackwell Publishing, vol. 4(1), pages 17-39, February.
    Other versions:
  3. Richard Harris, 1985. "Why Voluntary Export Restraints Are 'Voluntary.'," Canadian Journal of Economics, Canadian Economics Association, vol. 18(4), pages 799-809, November. [Downloadable!] (restricted)
  4. Hillman, Arye L, 1990. " Protectionist Policies as the Regulation of International Industry," Public Choice, Springer, vol. 67(2), pages 101-10, November.
  5. Kyle Bagwell & Robert W. Staiger, 1997. "An Economic Theory of GATT," NBER Working Papers 6049, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  6. Krishna, Kala, 1989. "Trade restrictions as facilitating practices," Journal of International Economics, Elsevier, vol. 26(3-4), pages 251-270, May. [Downloadable!] (restricted)
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  7. Wilfred J. Ethier, 1998. "Regionalism in a Multilateral World," Journal of Political Economy, University of Chicago Press, vol. 106(6), pages 1214-1245, December. [Downloadable!] (restricted)
  8. Dixit, Avinash, 1987. "Trade and insurance with moral hazard," Journal of International Economics, Elsevier, vol. 23(3-4), pages 201-220, November. [Downloadable!] (restricted)
  9. Kyle Bagwell & Robert W. Staiger, 1999. "Multilateral Trade Negotiations, Bilateral Opportunism and the Rules of GATT," NBER Working Papers 7071, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  10. Jonathan Eaton & Gene M. Grossman, 1985. "Tariffs as Insurance: Optimal Commercial Policy When Domestic Markets Are Incomplete," NBER Working Papers 0797, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  11. Bagwell, Kyle & Staiger, Robert W, 1990. "A Theory of Managed Trade," American Economic Review, American Economic Association, vol. 80(4), pages 779-95, September. [Downloadable!] (restricted)
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  12. Ethier, Wilfred J., 2001. "Theoretical problems in negotiating trade liberalization," European Journal of Political Economy, Elsevier, vol. 17(2), pages 209-232, June. [Downloadable!] (restricted)
  13. Ethier, Wilfred J, 1998. "The New Regionalism," Economic Journal, Royal Economic Society, vol. 108(449), pages 1149-61, July. [Downloadable!] (restricted)
  14. Dixit, Avinash K, 1989. "Trade and Insurance with Adverse Selection," Review of Economic Studies, Blackwell Publishing, vol. 56(2), pages 235-47, April. [Downloadable!] (restricted)
  15. K.C. Fung & Robert W. Staiger, 1994. "Trade Liberalization and Trade Adjustment Assistance," NBER Working Papers 4847, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  16. Staiger, Robert W & Tabellini, Guido, 1987. "Discretionary Trade Policy and Excessive Protection," American Economic Review, American Economic Association, vol. 77(5), pages 823-37, December. [Downloadable!] (restricted)
  17. Hillman, Arye L, 1982. "Declining Industries and Political-Support Protectionist Motives," American Economic Review, American Economic Association, vol. 72(5), pages 1180-87, December. [Downloadable!] (restricted)
  18. repec:att:wimass:1919996 is not listed on IDEAS
  19. Baldwin, Robert E & Steagall, Jeffrey W., 1994. "An Analysis of US International Trade Commission Decisions in Antidumping, Countervailing Duty and Safeguard Cases," CEPR Discussion Papers 990, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Hillman, Arye L., 2003. "Trade Liberalization and Globalization: A Survey," CEPR Discussion Papers 3845, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  2. Meredith Crowley, 2006. "Why are safeguards needed in a trade agreement?," Working Paper Series WP-06-06, Federal Reserve Bank of Chicago. [Downloadable!]
  3. Richard Baldwin, 2007. "Multilateralising Regionalism: Sphagetti Bowls as building Blocs on the Path to Global Free Trade," Working Papers id:1231, esocialsciences.com. [Downloadable!]
    Other versions:
  4. Hillman, Arye L., 2003. "Departure from Free Trade: A Survey," CEPR Discussion Papers 3707, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  5. Peter Neary & Ainars S¡lesers & Edward G. Krubasik & John M. Weekes, 2003. "Advancing Global Trade: Pro Liberalisation and Development," CESifo Forum, Ifo Institute for Economic Research at the University of Munich, vol. 4(2), pages 52-67, October. [Downloadable!]
  6. Mehari Mekonnen Akalu, 2002. "Measuring and Ranking Value Drivers," Tinbergen Institute Discussion Papers 02-043/2, Tinbergen Institute. [Downloadable!]
  7. Horn, Henrik & Mavroidis, Petros C, 2001. "Economic and Legal Aspects of the Most Favoured Nation Clause," CEPR Discussion Papers 2859, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  8. Meredith A. Crowley, 2003. "An introduction to the WTO and GATT," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q IV, pages 42-57. [Downloadable!]
  9. Meredith A. Crowley, 2002. "Do safeguard tariffs and antidumping duties open or close technology gaps?," Working Paper Series WP-02-13, Federal Reserve Bank of Chicago. [Downloadable!]
    Other versions:
  10. Wilfred J. Ethier, . "Punishment and Dispute Settlement in Trade Agreements," EPRU Working Paper Series 01-14, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics. [Downloadable!]
  11. J Peter Neary, 2003. "Europe on the Road to Doha - Towards a New Global Trade Round," Working Papers 200317, School Of Economics, University College Dublin. [Downloadable!]
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