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Unilateralism in a Multilateral World

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  • Wilfred J. Ethier

    (University of Pennsylvania)

Abstract

This paper addresses the interplay between unilateralism and multilateralism. I first describe theirrespective stylized facts. I next present a simple, multi-country model with high initial tariffbarriers and with the features that have always been of paramount concern to policymakers, allowgovernments to negotiate multilateral agreements, and analyze the resulting equilibrium. I thenconsider the possibility of unilateralism and find a role for a system with features remarkablysimilar to contemporary unilateralism. The relationships between multilateralism and unilateralismare subtle: Unilateralism has the properties it has because the world is multilateral (the insurancetriangle); to be useful unilateralism requires a multilateral component of some type; this typeresults from a basic compatibility problem between those who negotiate multilaterally and thosewho establish unilateralism.

Suggested Citation

  • Wilfred J. Ethier, 2001. "Unilateralism in a Multilateral World," Tinbergen Institute Discussion Papers 01-033/2, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20010033
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    References listed on IDEAS

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    Cited by:

    1. Takechi, Kazutaka, 2020. "Do domestic producers benefit from safeguards? The case of a Japanese safeguard on Chinese vegetable imports in 2001," Japan and the World Economy, Elsevier, vol. 55(C).
    2. Richard E. Baldwin, 2011. "Multilateralising Regionalism: Spaghetti Bowls as Building Blocks on the Path to Global Free Trade," Chapters, in: Miroslav N. Jovanović (ed.), International Handbook on the Economics of Integration, Volume I, chapter 2, Edward Elgar Publishing.
    3. Gründler, Klaus & Hillman, Arye L., 2021. "Ambiguous protection," European Journal of Political Economy, Elsevier, vol. 68(C).
    4. Elie Appelbaum & Mark Melatos, 2014. "Option Values and the Choice of Trade Agreements," Working Papers 2014_1, York University, Department of Economics.
    5. Baldwin, Richard, 2010. "Unilateral tariff liberalisation," CEPR Discussion Papers 8162, C.E.P.R. Discussion Papers.
    6. Kristy Buzard, 2017. "Trade Agreements in the Shadow of Lobbying," Review of International Economics, Wiley Blackwell, vol. 25(1), pages 21-43, February.
    7. Elie Appelbaum & Mark Melatos, 2012. "How Does Uncertainty Affect the Choice of Trade AgreementsF," Working Papers 2012_1, York University, Department of Economics.
    8. Richard E. Baldwin, 2006. "Multilateralising Regionalism: Spaghetti Bowls as Building Blocs on the Path to Global Free Trade," The World Economy, Wiley Blackwell, vol. 29(11), pages 1451-1518, November.
    9. Meredith A. Crowley, 2003. "An introduction to the WTO and GATT," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 27(Q IV), pages 42-57.
    10. J. Peter Neary, 2004. "Europe on the Road to Doha: Towards a New Global Trade Round?," CESifo Economic Studies, CESifo, vol. 50(2), pages 319-332.
    11. Elie Appelbaum & Mark Melatos, 2016. "How Can Uncertainty Affect the Choice of Trade Agreements?," The Economic Record, The Economic Society of Australia, vol. 92(297), pages 153-172, June.
    12. Appelbaum, Elie & Melatos, Mark, 2021. "Preferential Trade Agreements as Insurance," Working Papers 2021-04, University of Sydney, School of Economics.
    13. Hillman, Arye L., 2003. "Trade Liberalization and Globalization: A Survey," CEPR Discussion Papers 3845, C.E.P.R. Discussion Papers.
    14. Larry D. Qiu, 2004. "Lobbying, multisector trade, and sustainability of free‐trade agreements," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 37(4), pages 1061-1083, November.
    15. Wilfred J. Ethier, 2011. "The Political-Support View of Protection," PIER Working Paper Archive 11-026, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    16. Peter Neary & Ainars S¡lesers & Edward G. Krubasik & John M. Weekes, 2003. "Advancing Global Trade: Pro Liberalisation and Development," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 4(02), pages 52-67, October.
    17. Baldwin, Richard, 2011. "21st century regionalism: Filling the gap between 21st century trade and 20th century trade rules," WTO Staff Working Papers ERSD-2011-08, World Trade Organization (WTO), Economic Research and Statistics Division.
    18. Saggi, Kamal & Yildiz, Halis Murat, 2005. "The Case for MFN under Asymmetries of Cost and Market Structure," MPRA Paper 76331, University Library of Munich, Germany.
    19. Wilfred J. Ethier & Arye L. Hillman, 2017. "The Politics of International Trade," CESifo Working Paper Series 6456, CESifo.
    20. James C. Hartigan & Hylke Vandenbussche, 2010. "Why does the WTO have an Antidumping Agreement?," LICOS Discussion Papers 25310, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    21. Thangavelu, Shandre M. & Narjoko, Dionisius, 2014. "Human capital, FTAs and foreign direct investment flows into ASEAN," Journal of Asian Economics, Elsevier, vol. 35(C), pages 65-76.
    22. Meredith A. Crowley, 2006. "Why are safeguards needed in a trade agreement?," Working Paper Series WP-06-06, Federal Reserve Bank of Chicago.
    23. Hillman, Arye L., 2003. "Departure from Free Trade: A Survey," CEPR Discussion Papers 3707, C.E.P.R. Discussion Papers.
    24. Peter Neary & Ainars S¡lesers & Edward G. Krubasik & John M. Weekes, 2003. "Advancing Global Trade: Pro Liberalisation and Development," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 4(2), pages 52-67, October.

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    More about this item

    Keywords

    Unilateralism; multilateralism; administered protection; insurance triangle; multilateral component; compatibility problem;
    All these keywords.

    JEL classification:

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

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