Discussion or working paper
Unordnung in der Internationalen Handelsordnung. Befunde, Gründe, Auswirkungen und Therapien
AbstractIn the past, many WTO member states have liberalized their trade policies unilaterally. However, they were decreasingly prepared to guarantee these measures multilaterally, that is to "bind" them. This paper analyzes the background of this development by resorting to three political economy arguments pro multilateral binding: the terms of trade externality argument, the "tying hand" argument, that is to protect a government which is prone to liberalize against domestic lobby groups, and finally the argument that trade policies are instruments for general political targets. For all three arguments, it is shown why an important driving force of mercantilistically motivated trade negotiations has become weaker, the reciprocity requirement. The paper recommends narrower negotiation issues and mandates to prevent a further rising heterogeneity of issues and negotiation partners.
KeywordsInternational Trading Order, Multilateral Trading Negotiations, Reciprocity