Underlying Policies in the wto, the Harbinson Proposal and the Modalities Agreement

This paper provides a set of analyses that structure the wto member countries? officially reported positions in the ongoing international trade negotiations. First, a cluster analysis of members? positions place countries in groups that share similar objectives. Main findings in this analysis show that the eu is relatively isolated at an extreme in the negotiations while the us position is quite close to a major part of the developing countries. The second analysis identifies underlying fundamental policies that have formed countries? positions by using principal component analysis. Three underlying policy dimensions are found that explain most of the variation in the data : a liberalisation dimension, an export price dimension and a market access dimension. The final analysis identifies a set of fundamentals that determine countries? policies by regressing a set of potentially policy relevant variables on the three underlying dimensions. A set of factors including political ideology, development status and the strength of the agricultural lobby exert a significant influence, but even when controlling for the full set the eu is substantially less inclined to pursue general liberalisation, probably resulting from the institutional arrangement by which the eu formulates negotiation positions.