Multilateral trade negotiations, bilateral opportunism and the rules of GATT/WTO
Trade negotiations occur through time and between the governments of many countries. An important issue is thus whether the value of concessions that a government wins in a current negotiation may be eroded in a future bilateral negotiation to which it is not party. We identify rules of negotiation that serve to protect the welfare of governments that are not participating in the bilateral negotiation. Our main finding is that the two central principles of GATT/WTO - non-discrimination (MFN) and reciprocity - preserve the welfare of non-participating governments and therefore offer a "first-line of defense" against bilateral opportunism. We argue that the GATT/WTO nullification-or-impairment rule then constitutes an important "second-line of defense." Finally, we confirm that in the absence of rules, or under weaker rules (e.g., MFN alone), the potential for bilateral opportunism can be severe.
|Date of creation:||2002|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (212) 854-3680
Fax: (212) 854-8059
Web page: http://www.econ.columbia.edu/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kyle Bagwell & Robert W. Staiger, 2001.
"Domestic Policies, National Sovereignty, And International Economic Institutions,"
The Quarterly Journal of Economics,
MIT Press, vol. 116(2), pages 519-562, May.
- Kyle Bagwell & Robert W. Staiger, 1999. "Domestic Policies, National Sovereignty and International Economic Institutions," NBER Working Papers 7293, National Bureau of Economic Research, Inc.
- Ilya Segal, 1999. "Contracting With Externalities," The Quarterly Journal of Economics, MIT Press, vol. 114(2), pages 337-388, May.
- Robert W. Staiger & Kyle Bagwell, 1999.
"An Economic Theory of GATT,"
American Economic Review,
American Economic Association, vol. 89(1), pages 215-248, March.
- Bagwell, Kyle & Staiger, Robert W., 2001.
"Reciprocity, non-discrimination and preferential agreements in the multilateral trading system,"
European Journal of Political Economy,
Elsevier, vol. 17(2), pages 281-325, June.
- Kyle Bagwell & Robert W. Staiger, 1997. "Reciprocity, Non-discrimination and Preferential Agreements in the Multilateral Trading System," NBER Working Papers 5932, National Bureau of Economic Research, Inc.
- Horn, Henrik & Mavroidis, Petros C, 2001.
"Economic and Legal Aspects of the Most Favoured Nation Clause,"
CEPR Discussion Papers
2859, C.E.P.R. Discussion Papers.
- Horn, Henrik & Mavroidis, Petros C., 2001. "Economic and legal aspects of the Most-Favored-Nation clause," European Journal of Political Economy, Elsevier, vol. 17(2), pages 233-279, June.
- McAfee, R Preston & Schwartz, Marius, 1994. "Opportunism in Multilateral Vertical Contracting: Nondiscrimination, Exclusivity, and Uniformity," American Economic Review, American Economic Association, vol. 84(1), pages 210-30, March.
- Rodney D. Ludema, 1991. "International Trade Bargaining And The Most-Favored-Nation Clause," Economics and Politics, Wiley Blackwell, vol. 3(1), pages 1-20, 03.
- Kemp, Murray C. & Wan, Henry Jr., 1976. "An elementary proposition concerning the formation of customs unions," Journal of International Economics, Elsevier, vol. 6(1), pages 95-97, February.
When requesting a correction, please mention this item's handle: RePEc:clu:wpaper:0102-37. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Discussion Paper Coordinator)
If references are entirely missing, you can add them using this form.