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Why the WTO is Deadlocked: And What Can Be Done About It

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  • Paul Collier

Abstract

The GATT was hugely successful, yet its successor organisation is to date failing. This paper argues that the expansion in both scope and membership make it radically more difficult for a purely bargain‐based organisation to succeed. Three factors limit the scope for deals that would be recognised as mutually beneficial. Many developing countries are accustomed to transfers rather than bargains; the poorest countries have no basis for bargaining; and even where mutual advantage is possible it requires cross‐sectoral deals which are only feasible with new rules that are unattractive to many WTO members. The paper proposes solutions to these new problems. It proposes an explicit component of ‘transfer’ in the form of non‐reciprocated liberalisation. It proposes a plurilateral solution to the tension between rules and sovereignty. It links these through a ‘grand bargain’ that offers transfers in return for plurilateralism. For the marginalised countries it proposes time‐bound preferences in OECD markets along the lines of AGOA. Finally, to recreate for the larger developing countries similar incentives for liberalisation to those previously achieved for developed countries, it proposes a limited MFN, through which they could restrict their liberalisations to include only other developing countries.

Suggested Citation

  • Paul Collier, 2006. "Why the WTO is Deadlocked: And What Can Be Done About It," The World Economy, Wiley Blackwell, vol. 29(10), pages 1423-1449, October.
  • Handle: RePEc:bla:worlde:v:29:y:2006:i:10:p:1423-1449
    DOI: 10.1111/j.1467-9701.2006.00844.x
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    References listed on IDEAS

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    1. Alan V. Deardorff & Robert M. Stern, 2003. "Enhancing the Benefits for Developing Countries in the Doha Development Agenda Negotiations," Working Papers 498, Research Seminar in International Economics, University of Michigan.
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    Cited by:

    1. Faude, Benjamin, 2020. "Breaking gridlock: how path dependent layering enhances resilience in global trade governance," LSE Research Online Documents on Economics 103927, London School of Economics and Political Science, LSE Library.
    2. N. N., 2007. "Austria's External Economic Relations 2007. Executive Summary," WIFO Studies, WIFO, number 31061.
    3. Faude, Benjamin, 2020. "International institutions in hard times: how institutional complexity increases resilience," LSE Research Online Documents on Economics 108663, London School of Economics and Political Science, LSE Library.
    4. Benjamin Faude, 2020. "Breaking Gridlock: How Path Dependent Layering Enhances Resilience in Global Trade Governance," Global Policy, London School of Economics and Political Science, vol. 11(4), pages 448-457, September.
    5. Lloyd , Peter, 2013. "Multilateralism is in Crisis," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 8(2), pages 67-102, April.
    6. Agur Itai, 2008. "The US Trade Deficit, the Decline of the WTO and the Rise of Regionalism," Global Economy Journal, De Gruyter, vol. 8(3), pages 1-34, September.
    7. Stephen, Matthew D. & Parízek, Michal, 2019. "New Powers and the Distribution of Preferences in Global Trade Governance: From Deadlock and Drift to Fragmentation," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 24(6), pages 735-758.
    8. Peter Lloyd, 2012. "Multilateralism in Crisis," ARTNeT Working Papers 114, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
    9. Olga Pindyuk & Leon Podkaminer & Sandor Richter, 2008. "Monthly Report No. 1/2008," wiiw Monthly Reports 2008-01, The Vienna Institute for International Economic Studies, wiiw.

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    1. Alan V. Deardorff & Robert M. Stern, 2004. "Enhancing the Benefits for India and Other Developing Countries in the Doha Development Agenda Negotiations," Working Papers 512, Research Seminar in International Economics, University of Michigan.

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