What Do Trade Negotiators Negotiate About? Some Evidence from the Uruguay Round

UCSC, Dept. of Economics Working Paper #412

Posted: 25 Sep 1998

See all articles by K. C. Fung

K. C. Fung

University of California at Santa Cruz

Francis Ng

World Bank - Development Research Group (DECRG)

Date Written: July 1998

Abstract

Krugman (1991, 1997) argues that international trade negotiations are based on mercantilist rules. Bhagwati (1988, 1995) highlights how nations are obsessed with reciprocity in their bargaining. Based on studying the trade negotiations process and the results of the Uruguay Round, we provide some answers to the following questions: How did trade negotiators negotiate? What did they negotiate about? We also provide some econometric results based on the Nash bargaining model of Binmore, Rubinstein and Wolinsky (1986) and also partly on the theory of trade talks by Grossman and Helpman (1995). We found that what a country got in concessions relative to what it gave was positively related to its import-to-GNP ratio, but negatively related to its export-to-GNP ratio and also negatively related to its GNP. The last result can be interpreted to provide some support for the "hegemon hypothesis:" to help maintain the world trading system, large countries tend to give more net concessions than small countries.

JEL Classification: F13

Suggested Citation

Fung, K.C. and Ng, Francis, What Do Trade Negotiators Negotiate About? Some Evidence from the Uruguay Round (July 1998). UCSC, Dept. of Economics Working Paper #412, Available at SSRN: https://ssrn.com/abstract=117508

K.C. Fung (Contact Author)

University of California at Santa Cruz ( email )

Santa Cruz, CA 95064
United States
831-459-3273 (Phone)
831-459-5900 (Fax)

Francis Ng

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States
202-473-8088 (Phone)
202-522-1159 (Fax)

HOME PAGE: http://econ.worldbank.org/staff/fng

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