Explaining rising regionalism and failing multilateralism : consensus decision-making and expanding WTO membership
The beleaguered progress of the Doha Development Agenda of the WTO presents something of a puzzle for economic theory: if multilateralism is an effective forum for liberalisation (as it has been in the past), then why have the current round of talks faltered amid the proliferation of preferential trade negotiations? Several authors have argued that the consensus decision-making and single-undertaking principles of the WTO have lead to coordination failures amongst an increasingly expanded and diverse membership which has caused frustrated WTO members to form PTAs. This paper constructs a formal model which shows that the combination of the single-undertaking and consensus decision-making principles with an expanded and more diverse membership can lead to more than just coordination failure; it can render multilateralism less desirable for some parties than bilateralism. It is argued that these principles give countries de facto veto power meaning that their threat point during multilateral negotiations is a reversion to bilateral negotiations between all parties. Accordingly, countries with relatively less to gain from multilateralism can use their veto power to extract gains from those that would benefit substantially from the WTO. If an expanding membership has increased the number of such countries, then the benefits of multilateralism versus regionalism from the perspective of their negotiating partners may have been diminished to such an extent that they are no longer willing to wait for the conclusion of the Doha round before engaging in regional negotiations. This result adds credence to the idea that ‘variable geometry’ be introduced into the WTO system, such that it acts as an umbrella organisation for a web of sub-agreements.
|Date of creation:||Nov 2009|
|Date of revision:|
|Contact details of provider:|| Postal: UCD, Belfield, Dublin 4|
Fax: +353-1-283 0068
Web page: http://www.ucd.ie/economics
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.:
- Giovanni Maggi, 1999. "The Role of Multilateral Institutions in International Trade Cooperation," American Economic Review, American Economic Association, vol. 89(1), pages 190-214, March.
- John Kennan & Raymond Riezman, 2013.
"Do Big Countries Win Tariff Wars?,"
World Scientific Book Chapters,
in: International Trade Agreements and Political Economy, chapter 4, pages 45-51
World Scientific Publishing Co. Pte. Ltd..
- Robert W. Staiger & Kyle Bagwell, 1999.
"An Economic Theory of GATT,"
American Economic Review,
American Economic Association, vol. 89(1), pages 215-248, March.
- Patrick A. Messerlin, 2005. "Three Variations on ‘The Future of the WTO’," Journal of International Economic Law, Oxford University Press, vol. 8(2), pages 299-309, June.
- Gary Clyde Hufbauer, 2005. "Inconsistency Between Diagnosis and Treatment," Journal of International Economic Law, Oxford University Press, vol. 8(2), pages 291-297, June.
- Jeffrey J. Schott & Jayashree Watal, 2000. "Decision-Making in the WTO," Policy Briefs PB00-2, Peterson Institute for International Economics.
- Robert Z. Lawrence, 2006. "Rulemaking Amidst Growing Diversity: A Club-of-Clubs Approach to WTO Reform and New Issue Selection," Journal of International Economic Law, Oxford University Press, vol. 9(4), pages 823-835, December.
- Mayer, Wolfgang, 1981. "Theoretical Considerations on Negotiated Tariff Adjustments," Oxford Economic Papers, Oxford University Press, vol. 33(1), pages 135-53, March.
- Koremenos, Barbara & Lipson, Charles & Snidal, Duncan, 2001. "The Rational Design of International Institutions," International Organization, Cambridge University Press, vol. 55(04), pages 761-799, September.
When requesting a correction, please mention this item's handle: RePEc:ucn:wpaper:200921. 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: (Nicolas Clifton)
If references are entirely missing, you can add them using this form.