Working Paper: NBER ID: w16388
Authors: Ralph Ossa
Abstract: I suggest a novel theory of GATT/WTO negotiations based on the Krugman (1980) "new trade" model. It emphasizes international production relocations and is easy to calibrate to bilateral trade data. Focusing on the major players in recent GATT/WTO negotiations, I find that it implies reasonable noncooperative tariffs as well as moderate gains from GATT/WTO negotiations.
Keywords: GATT; WTO; trade negotiations; new trade theory; reciprocity; nondiscrimination
JEL Codes: F12; F13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| GATT/WTO negotiations (F13) | escape inefficient noncooperative equilibria (C72) |
| escape inefficient noncooperative equilibria (C72) | changes in tariffs (F19) |
| changes in tariffs (F19) | shifts in manufacturing production locations (L23) |
| shifts in manufacturing production locations (L23) | impact on domestic welfare (H53) |
| GATT/WTO negotiations (F13) | production relocation externality (R32) |
| production relocation externality (R32) | net positive impact on domestic manufacturing jobs (F69) |
| production relocation externality (R32) | net positive impact on domestic welfare (D69) |
| welfare losses from noncooperative tariffs (D69) | losses from autarky (F00) |