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Concepts of Fairness in the Global Trading System

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  • Andrew Brown

    (Wellfleet, MA)

  • Robert Stern

    (University of Michigan)

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    Abstract

    In this paper, we first discuss why fairness is a condition of the agreements among governments that form the global trading system. We then suggest that fairness can best be considered within the framework of two concepts: equality of opportunity and distributive equity. We observe that the efficiency criterion is not a primary yardstick of fairness, and though it is relevant in choosing among alternative ways of realizing fairness, it is not without its own limitations. We thereafter discuss what equality of opportunity and distributive equity mean when applied to the commitments that governments make in the global trading system. For this purpose, we divide these commitments into four categories: those relating directly to market access; those concerning supporting rules designed to prevent cheating in market access commitments or to facilitate trade flows; those relating to procedures for the settlement of disputes or the use of trade remedy measures; and those relating to governance of the system. (We say nothing in this paper about the issue of fairness in the context of the last category.) Finally, we make some comments about fairness in the Doha Development Round, first reviewing some proposals made by Stiglitz and Charlton, and then making some observations about the central issue of market access.

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    File URL: http://fordschool.umich.edu/rsie/workingpapers/Papers526-550/r544.pdf
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    Bibliographic Info

    Paper provided by Research Seminar in International Economics, University of Michigan in its series Working Papers with number 544.

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    Length: 38 pages
    Date of creation: 2005
    Date of revision:
    Handle: RePEc:mie:wpaper:544

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    Postal: ANN ARBOR MICHIGAN 48109
    Web page: http://www.fordschool.umich.edu/rsie/
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    References

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    1. Hoekman, Bernard, 2004. "Dismantling Discrimination Against Developing Countries: Access, Rules and Differential Treatment," CEPR Discussion Papers 4694, C.E.P.R. Discussion Papers.
    2. Joseph E. Stiglitz, 2000. "Two Principles for the Next Round or, How to Bring Developing Countries in from the Cold," The World Economy, Wiley Blackwell, vol. 23(04), pages 437-454, 04.
    3. Risse, Mathias, 2005. "Fairness in Trade," Working Paper Series rwp05-004, Harvard University, John F. Kennedy School of Government.
    4. Carlo Carraro & Carmen Marchiori & Alessandra Sgobbi, 2005. "Advances in Negotiation Theory: Bargaining, Coalitions and Fairness," Working Papers 2005.66, Fondazione Eni Enrico Mattei.
    5. Hoekman, Bernard & Ozden, Caglar, 2005. "Trade preferences and differential treatment of developing countries : a selective survey," Policy Research Working Paper Series 3566, The World Bank.
    6. Mattoo, Aaditya & Subramanian, Arvind, 2004. "The WTO and the poorest countries: the stark reality," World Trade Review, Cambridge University Press, vol. 3(03), pages 385-407, November.
    7. Bernard M. Hoekman & Petros C. Mavroidis, 2000. "WTO Dispute Settlement, Transparency and Surveillance," The World Economy, Wiley Blackwell, vol. 23(04), pages 527-542, 04.
    8. Aaditya Mattoo & Arvind Subramanian, 2004. "The WTO and the Poorest Countries," IMF Working Papers 04/81, International Monetary Fund.
    9. Steven M. Suranovic, 2000. "A Positive Analysis of Fairness with Applications to International Trade," The World Economy, Wiley Blackwell, vol. 23(3), pages 283-307, 03.
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