Publication Type
Working Paper
Version
publishedVersion
Publication Date
5-2024
Abstract
This paper introduces a quantitative framework to analyze the WTO’s reciprocity principle. Utilizing two polar bargaining environments, we measure terms-of-trade concessions among WTO members and examine how shifts in applied tariffs and economic fundamentals affect bilateral and multilateral balance of concessions. We find significant disparities in concessions, largely driven by the rise in trade imbalances since the early 1990s. Notably, although US-China bilateral tariffs suggest considerable terms-of-trade benefits for China, under a hypothetical balanced trade scenario, their relationship evolves towards near reciprocity following China’s accession to the WTO. Furthermore, in contrast to the significant gains in its relationship with the US, China experiences a terms-of-trade loss in its bilateral relationships with other WTO members. Lastly, we offer insights into the magnitude of concessions exchanged by countries at different levels of development.
Keywords
WTO, reciprocity, trade concessions, terms-of-trade, bilateral tariffs, multilateral balance, trade imbalances, US-China trade, economic fundamentals, development economics
Discipline
Asian Studies | International Economics
Research Areas
International Economics
First Page
1
Last Page
43
Publisher
SMU Economics and Statistics Working Paper Series, Paper No. 05-2024
City or Country
Singapore
Embargo Period
7-2-2024
Citation
BESHKAR, Mostafa; CHANG, Pao-li; and SONG, Shenxi.
The balance of concessions in trade agreements. (2024). 1-43.
Available at: https://ink.library.smu.edu.sg/soe_research/2753
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.