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What Do Trade Negotiators Negotiate About? Empirical Evidence from the World Trade Organization
Abstract
According to the terms-of-trade theory, governments use trade agreements to escape from a terms-of-trade-driven prisoner's dilemma. We use the terms-of-trade theory to develop a relationship that predicts negotiated tariff levels on the basis of pre-negotiation data: tariffs, import volumes and prices, and trade elasticities. We then confront this predicted relationship with data on the outcomes of tariff negotiations associated with the accession of new members to the World Trade Organization. We find strong and robust support for the central predictions of the terms-of-trade theory in the observed pattern of negotiated tariff cuts. (JEL F11, F13)
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Journal of economic literature
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Do We Really Know That the WTO Increases Trade?
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The WTO promotes trade, strongly but unevenly
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The Political Economy of the World Trading System: The WTO and Beyond
Hoekman, B. M., & Kostecki, M. M. (2009) · doi:10.1093/oso/9780199553761.001.0001 · Cited by 627
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Metadata
- Authors
- Bagwell, K., & Staiger, R. W.
- Venue
- American Economic Review
- Publisher
- American Economic Association
- Published
- 2011-06-01
- Volume
- 101
- Issue
- 4
- Pages
- 1238-1273
- ISSN
- 0002-8282 (ISSN-L)
- OpenAlex
- W3123694014
- Cited by
- 258
- References
- 44
- FWCI
- 61.29
- Type
- journal article
- Language
- en
- Open access
- closed
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