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GTAP Resources: Resource Display

GTAP Resource #1578

"National interests, coalitions and rules of decision in multilateral trade negotiations"
by Bouët, Antoine and David Laborde


Abstract
After the Cancun summit, experts have tried to find reasons for the failure in the conduct of trade negotiations. This new round is apparently complex, due to multiple reasons. Some are institutional, for example the WTO consensus approach. Others are clearly the results of a political economic process: in rich countries, protection and subsidies are today concentrated in the agricultural sector, of which the liberalization constitutes a major stake for developing countries. Finally, multilateral trade negotiations could lead to an erosion of preferential margins of some developing countries in their market access to large and rich countries. All these elements may explain the formation of coalitions, but whether they are really homogenous is questionable (G90, G22, Cairns group…).

This paper aims to examine why WTO members, with specific national interests due to economic reasons, agree to take part in coalitions in order to influence the conduct of trade negotiations. The approach is not traditional, as we test the economic impact of a large set of scenarios on each country or trading zone. The object is to identify for which countries a coalition is beneficial, and why. Then an estimation of the margins of negotiation for the Doha Development Round is conducted.
Using the MIRAGE model (CEPII), 128 trade liberalisation scenarios are assessed. These scenarios results from the combining of various liberalisation formulas, the application, or not, of Special and Differentiated Treatment, of a sector-based or a global approach and are based on the Macmaps HS6-database (CEPII & ITC). Moreover, a hierarchy of solutions is drawn for each country and each trading zone. It allows for an estimation of the room for manoeuvre in the conduct of multilateral negotiations.

Two methodological issues are fundamental :
- the multinational model is applied on a consistent geographical and sector breakdown, with respect to the object of the study. Group of countries are constituted on the basis of identical preferential access, trade specialization and geographical and product structure of their exports. Some key sectors are also identified: cereals, meat, dairy products, sugar, textile, apparel…
- A precise definition of national interests is also an important issue. Traditional criteria (GDP, sector output, factors remunerations, exports…) are examined. The study stresses the importance of an indicator which combines political and economic motivations of negotiators. The economic motivation is tackled by the evolution of national exports, while the political aspect is formalized by minimizing the sum of the squared job losses (in relative terms and by sector).

Finally, the simulations make it possible to characterize the key elements of the negotiations and stress the best way to reach a global compromise.


Resource Details (Export Citation) GTAP Keywords
Category: 2004 Conference Paper
Status: Published
By/In: Presented at the 7th Annual Conference on Global Economic Analysis, Washington DC, USA
Date: 2004
Version:
Created: Laborde, D. (5/13/2004)
Updated: Laborde, D. (5/13/2004)
Visits: 1,982
No keywords have been specified.


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