1 Before the late 1990s, a trade economist who wished to delve into research on the theory behind the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO) faced significant barriers to entry. First, as research into the GATT/WTO framework has historically been the domain of legal scholars and political scientists, an audience of these researchers was skeptical of any economic “insights. ” For example, the prevailing thought was that application of such truly academic economic concepts as the “terms of trade effect ” to motivate the existence of the GATT/WTO must clearly be misguided; government policymakers surely never refer to such esoteric themes in the midst of real world trade policy negotiations! Second, given that anything that most economists knew about the GATT/WTO would originate from such scholars in other fields, the prevailing opinion even amongst economists was that these institutions derived largely from political considerations and thus lacked any economic basis or foundation. In their joint economic research agenda spanning the last fifteen or so years, Kyle

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WC2A 2AE, UK. * This work was partly conducted while the authors were Consultant and Research Manager in the Development Research Group of the World Bank. The views expressed in this paper are those of the authors and should therefore not be attributed to the World Bank or its member governments. The authors are

We propose and test two ways in which retaliation threats may dampen the antidump-ing (AD) activity we observe. First, the threat of retaliatory AD actions may make a domestic industry less likely to name a foreign import source in an AD petition. Second, the prospect of a GATT/WTO trade dispute may make government agencies less likely to rule positive in their AD decision. Using a nested logit framework, we find evidence that both retaliation threats

Abstract Recent theoretical work on bilateral trade preferences stresses their dependence on but also their consequences for the multilateral trading system. In particular, a country's choice of participating in a preferential trade agreement (PTA) depends on the choice of other economies to participate therein. However, recent empirical work on the determinants of PTA formation assumes that countries are independent in that regard. This paper lays out an empirical analysis to study the role of interdependencies in PTA membership in a large data-set of 15, 753 country-pairs. Applying modern econometric techniques, a PTA membership is found to create an incentive for other country-pairs to participate in a PTA as well. Especially, countries have an incentive to participate in the same PTA if their neighbors are members already.

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Developed countries maintain special tariff preferences, namely the Generalized System of Preferences (GSP), for imports from developing countries. Critics have highlighted the underachieving nature of such preferences, but developing countries continue to place GSP at the heart of their agenda in multilateral negotiations. What effect do such preferences have on a recipient's own trade policies? We develop and test a simple theoretical model of a small country's trade policy choice, using a dataset of 154 developing countries from 1976 through 2000. We find that countries removed from GSP adopt more liberal trade policies than those remaining eligible. The results, corrected for endogeneity and robust to numerous alternative measures of trade policy, suggest that developing countries may be best served by full integration into the reciprocity-based world trade regime rather than continued GSP-style special prefer- ences.

Abstract: Intellectual property treaties have two main types of provisions: national treatment of foreign inventors, and harmonization of protections. I address the positive question of when countries would want to treat foreign inventors the same as domestic inventors, and how their incentive to do so depends on reciprocity. I also investigate an equilibrium in which regional policy makers choose IP policies that serve regional interests, conditional on each other's policies, and investigate the degree to which \harmonization " can redress the resulting ine±ciencies.

Chad Bown, Penny Goldberg, Nuno Limao, and seminar participants at UC-Berkeley, UC-San Diego and the NBER 2006 Summer Institute. We thank Hiau Looi Kee for providing us with access to the detailed estimates of ad valorem equivalent NTB measures generated in Kee, Nicita and Olarreaga (2006), Robert Feenstra for making available to us his data on processing versus ordinary trade for China, and Cato Adrian of the WTO Secretariat for help with many data questions. Finally, we thank Alan Spearot for outstanding research assistance, Chia Hui Lu for early help with the data, and the NSF (SES-0518802) for financial support. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the

Trade negotiations occur through time and between the governments of many countries. An important issue is thus whether the value of concessions that a government wins in a current negotiation may be eroded in a future bilateral negotiation to which it is not party. We identify rules of negotiation that serve to protect the welfare of governments that are not participating in the bilateral negotiation. Our main finding is that the two central principles of GATT/WTO- non-discrimination (MFN) and reciprocity- preserve the welfare of non-participating governments and therefore o¤er a “first-line of defense” against bilateral opportunism. We argue that the GATT/WTO nullification-or-impairment rule then constitutes an important “second-line of defense.” Finally, we confirm that in the absence of rules, or under weaker rules (e.g., MFN alone), the potential for bilateral opportunism can be severe.