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What's Left for the WTO?

Author

Listed:
  • Chad P. Bown
Abstract
Suppose that when addressing the question of “what’s left for the WTO?,” negotiators relied not on the agenda established in 2001 but instead on the terms-of-trade theory of trade agreements to identify tariff negotiating priorities. This paper uses the lens of the terms-of-trade theory to investigate three specific areas in which it is frequently alleged that currently applied tariffs are “too high,” the implication being that there are still tariff reductions out there for an agreement like the WTO to facilitate. These three areas include applied tariffs for countries that are not members of the WTO, applied tariffs for WTO members that are unbound, and applied tariffs for WTO members set in the presence of large amounts of tariff binding overhang. As it turns out, these three areas are almost exclusively found to be the trade policies that developing countries themselves impose. I build upon recent developments in the empirical literature to present tentative evidence - some direct, some indirect - that sheds light on each of these three areas. I then draw insights from these results to highlight open and additional policy questions for additional research.

Suggested Citation

  • Chad P. Bown, 2016. "What's Left for the WTO?," CESifo Working Paper Series 5703, CESifo.
    • Handle: RePEc:ces:ceswps:_5703
    as

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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp5703.pdf
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    References listed on IDEAS

    as
    1. Chad P. Bown & Meredith A. Crowley, 2013. "Self-Enforcing Trade Agreements: Evidence from Time-Varying Trade Policy," American Economic Review, American Economic Association, vol. 103(2), pages 1071-1090, April.
    2. Giovanni Maggi & Andrés Rodríguez-Clare, 2007. "A Political-Economy Theory of Trade Agreements," American Economic Review, American Economic Association, vol. 97(4), pages 1374-1406, September.
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    5. Bown, Chad & Crowley, Meredith A., 2016. "The Empirical Landscape of Trade Policy," CEPR Discussion Papers 11216, C.E.P.R. Discussion Papers.
    6. Blanchard, Emily J., 2010. "Reevaluating the role of trade agreements: Does investment globalization make the WTO obsolete?," Journal of International Economics, Elsevier, vol. 82(1), pages 63-72, September.
    7. Blanchard Emily J, 2007. "Foreign Direct Investment, Endogenous Tariffs, and Preferential Trade Agreements," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 7(1), pages 1-52, November.
    8. Beshkar, Mostafa & Bond, Eric W. & Rho, Youngwoo, 2015. "Tariff binding and overhang: Theory and evidence," Journal of International Economics, Elsevier, vol. 97(1), pages 1-13.
    9. Kyle Handley & Nuno Limão, 2013. "Policy Uncertainty, Trade and Welfare: Theory and Evidence for China and the U.S," NBER Working Papers 19376, National Bureau of Economic Research, Inc.
    10. Bown, Chad P. & Crowley, Meredith A., 2014. "Emerging economies, trade policy, and macroeconomic shocks," Journal of Development Economics, Elsevier, vol. 111(C), pages 261-273.
    11. Ralph Ossa, 2012. "Profits in the "New Trade" Approach to Trade Negotiations," American Economic Review, American Economic Association, vol. 102(3), pages 466-469, May.
    12. Bown, Chad P. & Crowley, Meredith A., 2013. "Import protection, business cycles, and exchange rates: Evidence from the Great Recession," Journal of International Economics, Elsevier, vol. 90(1), pages 50-64.
    13. Ludema, Rodney D. & Mayda, Anna Maria, 2009. "Do countries free ride on MFN?," Journal of International Economics, Elsevier, vol. 77(2), pages 137-150, April.
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    More about this item

    Keywords

    WTO; tariffs; terms-of-trade;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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