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Cooperation in WTO’s Tariff Waters?

Author

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  • Alessandro Nicita
  • Marcelo Olarreaga
  • Peri Silva

Abstract

This paper examines the extent to which tariff cooperation is observed among World Trade Organization members. With the help of a simple political economy model, we show that tariffs are positively correlated with the importer’s market power when they are set noncooperatively but negatively correlated when set cooperatively. We use this prediction to empirically identify the extent of cooperation in the WTO and find that more than three-quarters of WTO members’ tariffs are set noncooperatively.

Suggested Citation

  • Alessandro Nicita & Marcelo Olarreaga & Peri Silva, 2018. "Cooperation in WTO’s Tariff Waters?," Journal of Political Economy, University of Chicago Press, vol. 126(3), pages 1302-1338.
  • Handle: RePEc:ucp:jpolec:doi:10.1086/697085
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    References listed on IDEAS

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    Cited by:

    1. James Lake & Moise Nken & Halis Murat Yildiz, 2018. "Tariff Bindings and the Dynamic Formation of Preferential Trade Agreements," Working Papers 072, Ryerson University, Department of Economics.
    2. repec:eee:inecon:v:108:y:2017:i:c:p:117-136 is not listed on IDEAS
    3. Beshkar, Mostafa & Bond, Eric W. & Rho, Youngwoo, 2015. "Tariff binding and overhang: Theory and evidence," Journal of International Economics, Elsevier, vol. 97(1), pages 1-13.
    4. Kyle Bagwell & Chad P. Bown & Robert W. Staiger, 2016. "Is the WTO Passé?," Journal of Economic Literature, American Economic Association, vol. 54(4), pages 1125-1231, December.
    5. Lake, James & Roy, Santanu, 2017. "Are global trade negotiations behind a fragmented world of “gated globalization”?," Journal of International Economics, Elsevier, vol. 108(C), pages 117-136.
    6. Kyle Bagwell & Robert W. Staiger & Ali Yurukoglu, "undated". "Multilateral Trade Bargaining: A First Look at the GATT Bargaining Records," Discussion Papers 15-028, Stanford Institute for Economic Policy Research.
    7. Bown, Chad P. & Reynolds, Kara M., 2015. "Trade Agreements and Enforcement: Evidence from WTO Dispute Settlement," CEPR Discussion Papers 10571, C.E.P.R. Discussion Papers.
    8. Jaime DE MELO & Marcelo OLARREAGA, 2017. "Trade Related Institutions and Development," Working Papers P199, FERDI.
    9. repec:kap:empiri:v:45:y:2018:i:1:d:10.1007_s10663-016-9347-1 is not listed on IDEAS
    10. Jakubik, Adam & Piermartini, Roberta, 2019. "How WTO commitments tame uncertainty," WTO Staff Working Papers ERSD-2019-06, World Trade Organization (WTO), Economic Research and Statistics Division.
    11. Bown, Chad P. & Crowley, Meredith A, 2016. "The Empirical Landscape of Trade Policy," CEPR Discussion Papers 11216, C.E.P.R. Discussion Papers.
    12. Bekkers, Eddy & Teh, Robert, 2019. "Potential economic effects of a global trade conflict: Projecting the medium-run effects with the WTO global trade model," WTO Staff Working Papers ERSD-2019-04, World Trade Organization (WTO), Economic Research and Statistics Division.
    13. Bown,Chad P. & Bown,Chad P., 2015. "What?s left for the WTO ?," Policy Research Working Paper Series 7502, The World Bank.
    14. Lake, James & Linask, Maia K., 2016. "Could tariffs be pro-cyclical?," Journal of International Economics, Elsevier, vol. 103(C), pages 124-146.
    15. Oliver Lorz & Susanna Thede, 2018. "Tariff Overhang and Aid: Theory and Empirics," MAGKS Papers on Economics 201803, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    16. Douglas A. Irwin, 2014. "Tariff Incidence: Evidence from U.S. Sugar Duties, 1890-1930," NBER Working Papers 20635, National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

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

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