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Should credit be given for autonomous liberalization in multilateral trade negotiations?

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  • Mattoo, Aaditya
  • Olarreaga, Marcelo

Abstract

As each new round of multilateral trade negotiations approaches, there is a demand for a negotiating rule that would give credit for autonomous (unilateral) liberalization. The authors show that the feasibility, and desirability of such a rule depend on when it is instituted. A credit rule established at the beginning of a round of negotiations has a primarily distributional effect, favoringthose who have already undertaken liberalization. Implementing such a rule would depend on the generosity of those who have not liberalized. The authors propose instead establishing a credit rule at the end of a round of negotiations, which creates an ex-ante assurance that any unilateral liberalization will receive credit in the next round. Such a rule would help induce, or enhance liberalization in some countries between negotiating rounds, by reducing the gains from retaining protection as negotiating currency. More strikingly, it could also lead to deeper levels of multilateral liberalization, and induce other countries to go further than they would in the absence of a rule. Most important, such an ex-ante rule would not rely on altruism to be generally acceptable.

Suggested Citation

  • Mattoo, Aaditya & Olarreaga, Marcelo, 2000. "Should credit be given for autonomous liberalization in multilateral trade negotiations?," Policy Research Working Paper Series 2374, The World Bank.
  • Handle: RePEc:wbk:wbrwps:2374
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    References listed on IDEAS

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    1. Won Chang & L. Alan Winters, 2015. "How Regional Blocs Affect Excluded Countries: The Price Effects of MERCOSUR," World Scientific Book Chapters, in: Non-Tariff Barriers, Regionalism and Poverty Essays in Applied International Trade Analysis, chapter 11, pages 199-214, World Scientific Publishing Co. Pte. Ltd..
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    Cited by:

    1. Kyle Bagwell & Robert W. Staiger, 2013. "Can the Doha Round Be a Development Round? Setting a Place at the Table," NBER Chapters, in: Globalization in an Age of Crisis: Multilateral Economic Cooperation in the Twenty-First Century, pages 91-124, National Bureau of Economic Research, Inc.
    2. Bernard Hoekman, 2002. "Developing Countries and the Political Economy of the Trading System," WIDER Working Paper Series DP2002-126, World Institute for Development Economic Research (UNU-WIDER).
    3. Mattoo, Aaditya, 2001. "Shaping future GATS rules for trade in services," Policy Research Working Paper Series 2596, The World Bank.
    4. Mattoo, Aaditya & Olarreaga, Marcelo, 2000. "Reciprocity Across Modes of Supply in the WTO: A Negotiating Formula," CEPR Discussion Papers 2481, C.E.P.R. Discussion Papers.
    5. Zdzislaw W. Puslecki, 2018. "The Increasing Importance of Bilateral Agreements in the Foreign Trade Policy," Journal of Management and Strategy, Journal of Management and Strategy, Sciedu Press, vol. 9(1), pages 19-30, February.
    6. Puślecki Zdzisław, 2023. "The new protectionism between the USA and China and international trade policy amid worldwide geopolitical turbulence," Ekonomista, Polskie Towarzystwo Ekonomiczne, issue 2, pages 125-151.
    7. Mattoo, Aaditya & Olarreaga, Marcelo, 2000. "Reciprocity across modes of supply in the World Trade Organization : a negotiating formula," Policy Research Working Paper Series 2373, The World Bank.
    8. Zdzisław W. Puślecki, 2016. "Bilateral trade agreements and the rise of global supply chains," Journal of Economic and Financial Studies (JEFS), LAR Center Press, vol. 4(5), pages 17-23, October.

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    More about this item

    Keywords

    Environmental Economics&Policies; Economic Theory&Research; Insurance&Risk Mitigation; Payment Systems&Infrastructure; Financial Crisis Management&Restructuring; Agricultural Research; TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT; Economic Theory&Research; Environmental Economics&Policies; Insurance&Risk Mitigation;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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