How does import market power matter for trade agreements?

• 成果类型: Article
• 署名作者: Beshkar, Mostafa; Lee, Ryan
• 署名单位: Indiana University System; Indiana University Bloomington; University of La Verne
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2022.103580
• 发表日期: 2022
• 关键词: Import market power; Tariff binding; free-riding; Most favored nation clause; Flexible trade agreements; WTO

摘要

We evaluate two potential causes of deviation from efficiency in WTO negotiations: (i) a free-riding problem that may be caused by the WTO's nondiscrimination requirement, and (ii) asymmetric information about government preferences. Theories based on the above two causes generate starkly different predictions about the pattern of negotiated tariffs. We find that the WTO agreement provides more tariff flexibility in products with lower import market power. This finding is consistent with the implication of a negotiation model under asymmetric information, which predicts a tradeoff between flexibility and discipline in tariff obligations. Finally, we use the model together with data on negotiated and applied tariffs to calibrate the political weight of each import-competing industry for all WTO member countries. (C) 2022 Elsevier B.V. All rights reserved.