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Cited by 28Global trade and economicsWorld Trade Organization LawGlobal Trade and Competitiveness

Quantitative Analysis of Multi-Party Tariff Negotiations

Open access
Bagwell, Kyle, Staiger, Robert, Yurukoglu, Ali·2018·National Bureau of Economic Research
DOI 10.3386/w24273
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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.

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  • For the baseline analysis, trade elasticities θ_k in manufacturing sectors are taken as the median estimate within each sector from Bagwell, Staiger and Yurukoglu (2018), Caliendo and Parro (2015), Giri, Yi and Yilmazkuday (2018), and Shapiro (2016).

    “For our baseline analysis, we take the median estimate, within each sector, from the following recent studies: Bagwell, Staiger and Yurukoglu (2018), Caliendo and Parro (2015), Giri, Yi and Yilmazkuday (2018), and Shapiro (2016).”

    From The Textbook Case for Industrial Policy: Theory Meets Data (2019) · cites this paper as Bagwell, Staiger and Yurukoglu (2018)

  • Estimated gains from industrial policy remain fairly similar for three out of four studies, ranging from 0.68% to 1.84% on average.

    “Although there is a wide range of trade elasticity estimates across these four studies (as seen in Table B.3), estimated gains from industrial policy remain fairly similar for three out of four of these studies, ranging from 0.68% to 1.84% on average.”

    From The Textbook Case for Industrial Policy: Theory Meets Data (2019) · cites this paper as Bagwell et al., 2018

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Related

Authors
Bagwell, K., Staiger, R., & Yurukoglu, A.
Affiliations
Dartmouth College (US)
Venue
National Bureau of Economic Research
Publisher
National Bureau of Economic Research
Published
2018-02
DOI
10.3386/w24273
OpenAlex
W2785816272
Cited by
28
References
53
Citations by year
2025: 3 · 2024: 3 · 2023: 2 · 2022: 4 · 2021: 5 · 2020: 7 · 2019: 3 · 2017: 1
Type
report
Language
en
Open access
Locations
National Bureau of Economic Research (publishedVersion)
Funders
  • National Science Foundation (1326940)
  • University of Pennsylvania
  • Northwestern University
  • Dartmouth College
Topics
  • Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Global trade and economics
  • Social Sciences › Political Science and International Relations › World Trade Organization Law
  • Social Sciences › Business, Management and Accounting › Strategy and Management › Global Trade and Competitiveness
Keywords
GATT/WTO, Uruguay Round, iceberg trade costs, bilateral negotiations, trade liberalization, multilateral trade institutions, global welfare, international trade

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