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Reciprocity and the hidden constitution of world trade

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  • Carsten Herrmann-Pillath

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Abstract

In common descriptions of the world trading system, MFN and national treatment embody the principle of non-discrimination. Reciprocity is mostly regarded as a remnant of mercantilist trade policy. This paper argues that reciprocity is the more fundamental constitutional rule, because it reflects the unanimity principle enabling countries to identify Pareto-improving changes of trade policy. I reconstruct the implicit constitution of world trade by applying some methodology of positive constitutional economics. A major result is that in the Uruguay round a fundamental constitutional change took place from general reciprocity to “status quo reciprocity”, which entails the possibility of Pareto-deteriorating institutional changes. Copyright Springer Science+Business Media, LLC 2006

Suggested Citation

  • Carsten Herrmann-Pillath, 2006. "Reciprocity and the hidden constitution of world trade," Constitutional Political Economy, Springer, vol. 17(3), pages 133-163, September.
  • Handle: RePEc:kap:copoec:v:17:y:2006:i:3:p:133-163
    DOI: 10.1007/s10602-006-9000-2
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    References listed on IDEAS

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    Cited by:

    1. TROFIMOV, Ivan, 2017. "Systemic Analysis of Trade Liberalisation: Policy Entreprenuership and Behavioural Variables in a Two-Legal Game Framework," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 70(2), pages 217-244.
    2. Barbara Dluhosch & Stefanie Krause, 2013. "Diversity and the disinterest in trade liberalization: on the prospects of self-enforcing cooperation," Journal of Evolutionary Economics, Springer, vol. 23(2), pages 455-475, April.
    3. Trofimov, Ivan D., 2017. "International policy entrepreneurship and production of international public goods: the case of multilateral trade regime," MPRA Paper 80819, University Library of Munich, Germany.
    4. Barbara Dluhosch & Nikolai Ziegler, 2011. "The paradox of weakness in the politics of trade integration," Constitutional Political Economy, Springer, vol. 22(4), pages 325-354, December.
    5. Trofimov, Ivan D., 2017. "Political economy of trade protection and liberalization: in search of agency-based and holistic framework of policy change," MPRA Paper 79504, University Library of Munich, Germany.
    6. Ivan D. TROFIMOV, 2017. "International policy entrepreneurship and production of international public goods: the case of multilateral trade regime," Journal of Economics Library, KSP Journals, vol. 4(4), pages 473-501, December.

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    More about this item

    Keywords

    Positive constitutional economics; WTO/GATT; Reciprocity; Regionalism; MFN; F02; F13;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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