Work

Quantitative Analysis of Multi-Party Tariff Negotiations

Year: 2018

Type: report

Abstract: This paper develops a model of international tariff negotiations to study the design of the institutional rules of the GATT/WTO.We embed a multi-sector model of trade between multiple countries into a model of inter-connected bilateral negotiations over tariffs.Using 1990 trade flows and tariff outcomes from the Uruguay Round of GATT/WTO negotiations, we estimate country-sector productivity levels, sector-level productivity dispersion, iceberg trade costs, and country-pair bargaining parameters.We use the estimated model to simulate an alternative institutional setting for multilateral tariff negotiations in which the most-favored-nation requirement is abandoned.We find that abandonment of the most-favored-nation requirement would result in inefficient over-liberalization of tariffs and a deterioration in world-wide welfare relative to the negotiated outcomes in the presence of the most-favored-nation requirement.

Source: National Bureau of Economic Research

DOI: 10.3386/w24273

Authors: Kyle Bagwell, Robert Staiger, Ali Yurukoglu

Institutions: Dartmouth College, National Bureau of Economic Research, Singapore Management University, The University of Texas at Austin, University of California, Berkeley, Stanford University

Language: English

Topic: Global trade and economics

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: green

Funders: National Science Foundation, University of Pennsylvania, Northwestern University, Dartmouth College

Award: Multilateral Trade Bargaining: Theory and Evidence from the GATT Bargaining Records

OpenAlex ID: W2785816272

Cites: 52

Cited by: 28

Related to: 10