Reciprocity in trade negotiations and welfare

• 成果类型: Article
• 署名作者: Raimondos, Pascalis; Woodland, Alan
• 署名单位: Queensland University of Technology (QUT); University of New South Wales Sydney
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2017.12.007
• 发表日期: 2018
• 页码: 134-142
• 关键词: TRADE NEGOTIATIONS; RECIPROCITY; Tariff reform

摘要

We propose a reciprocity rule for use in multilateral trade policy negotiations that is guaranteed to raise welfare of all participating countries under minimal assumptions. Our reciprocity rule requires all countries to raise the quantities of their net imports by the same proportion. We show that, starting from a Nash tariff equilibrium, a tariff reform that delivers proportional increases in all countries' net imports will unambiguously raise welfare in each country. The structure imposed by the quantity-based reciprocity rule delivers this strong welfare result for a household welfare maximizing government without concern for general equilibrium price impacts. However, it does not generalize to the wide range of political economy welfare functions handled by Bagwell and Staiger. (C) 2018 Elsevier B.V. All rights reserved.