The Covid-19 pandemic and the conflict in Ukraine have unveiled the vulnerabilities of global food systems, resulting in food shortages, price spikes, and worsening food security. The World Trade ...Organization can play a key role in addressing these challenges through its developed body of rules. Its regulatory framework on agriculture, however, is affected by shortcomings and asymmetries that pose challenges to the long-term achievement of secure and sustainable food systems. Despite extensive negotiations among countries in the Committee on Agriculture ahead of the 12th Ministerial Conference, few concrete proposals were made to reform trade rules on agriculture. Additionally, the 12th Ministerial Conference itself failed to produce satisfactory results with respect to food security. The ongoing stalemate in agricultural negotiations since the outbreak of the Covid-19 pandemic indicates the need for a new, holistic approach to address food security at the World Trade Organization, particularly in preparation for the upcoming 13th Ministerial Conference in 2024. This approach should be informed by equity considerations and grounded in the notion of sustainable development and the human right to food. While a comprehensive reform of the Agreement on Agriculture informed by this approach is the ultimate goal, it is unlikely to occur in the short- to medium-term due to disagreement among countries on how to reform the three pillars of the Agreement. Therefore, an incremental approach could be adopted by prioritising issues for which short- to medium-term reforms are more likely to garner consensus, such as sustainable agricultural production, and by employing soft law instruments. The latter favour a flexible approach and promote cooperation and trust among countries.
This article examines the effect of the duration of the membership in the World Trade Organization (WTO) on investment-oriented remittances inflows (i.e., the portion of total remittances invested by ...remittance-receiving households in business activities). The analysis covers 120 countries over the period from 1996 to 2019, and employs the two-step system generalized method of moments estimator. It provides support for the hypothesis that by improving the stability and predictability of the business environment (i.e., by reducing tariffs volatility, trade uncertainty and economic uncertainty), the WTO membership provides strong incentives for remittance-receiving households to invest a fraction of their total remittances in business activities. This positive effect of the membership duration on investment-oriented remittances inflows appears to stronger for less developed countries. Additionally, longstanding WTO Members enjoy higher investment-oriented remittances inflows when they have large populations (a proxy for larger amounts of total remittances inflows), experience high trade volumes, a higher economic growth performance, and receive higher development aid inflows. Incidentally, the duration of WTO membership is positively and significantly associated with total remittances inflows. These findings complement previous works that highlighted the relevance of the WTO in promoting the development of the private sector in its member states (including developing members and the poorest among them).
•This article examines the effect of the membership duration in the WTO on investment-oriented remittances inflows (IORs).•The analysis relies on 120 countries (period 1996-2019), and the two-step system GMM estimator.•The membership duration influences positively IORs by improving the stability and predictability of the business environment.•The positive effect of the membership duration on IORs is stronger for less developed countries.•Longstanding WTO Members with large populations, high trade volumes, and higher economic growth performance enjoy higher IORs.
I suggest a novel theory of GATT/WTO negotiations based on Krugman’s “new trade” model. It emphasizes international production relocations and is easy to calibrate to bilateral trade data. Focusing ...on the major players in recent GATT/WTO negotiations, I find that it implies reasonable noncooperative tariffs as well as moderate gains from GATT/WTO negotiations.
We examine the effects of trade liberalization in China on the evolution of markups and productivity of manufacturing firms. Although these dimensions of performance cannot be separately identified ...when firm output is measured by revenue, detailed price deflators make it possible to estimate the average effect of tariff reductions on both. Several novel findings emerge. First, cuts in output tariffs reduce markups, but raise productivity. Second, pro-competitive effects are most important among incumbents, while efficiency gains dominate for new entrants. Third, cuts in input tariffs raise both markups and productivity. We highlight mechanisms that explain these findings in the Chinese context.
Cooperation in WTO’s Tariff Waters? Nicita, Alessandro; Olarreaga, Marcelo; Silva, Peri
The Journal of political economy,
06/2018, Volume:
126, Issue:
3
Journal Article
Peer reviewed
Open access
This paper examines the extent to which tariff cooperation is observed among World Trade Organization members. With the help of a simple political economy model, we show that tariffs are positively ...correlated with the importer’s market power when they are set noncooperatively but negatively correlated when set cooperatively. We use this prediction to empirically identify the extent of cooperation in the WTO and find that more than three-quarters of WTO members’ tariffs are set noncooperatively.
This study proposes a novel channel through which trade liberalization may induce innovation through the reduction of trade policy uncertainties (TPU) in destination markets. To verify this linkage, ...we utilize the significant reduction of TPU engendered by China’s accession to the World Trade Organization (WTO) in 2001 as a quasi-natural experiment. We find that reduction in TPU significantly encourages firms’ patent application: firms in sectors with a larger reduction in uncertainty filed more invention patent applications after China’s WTO accession. We also find that firms’ innovation responses to TPU reduction vary by productivity, ownership, exporting status, and the irreversibility of investment.
•Trade liberalization may induce innovation through the reduction of trade policy uncertainty (TPU) in destination markets.•We use the significant reduction of TPU engendered by China's accession to the WTO in 2001 as a quasi-natural experiment.•Firms in sectors with a larger reduction in TPU filed more invention patent applications after China's WTO accession.•Firms' innovation responses vary by productivity, ownership, exporting status, and the irreversibility of investment.
There is a long-held notion in the trade policy literature that traditional tariff instruments and temporary protection (TP) measures are substitutes. Despite this prediction, there is only mixed ...empirical evidence for a link between tariff reductions and the usage pattern of antidumping, safeguard and countervailing duties. Based on recent theoretical advances, I argue in this paper that the relevant trade policy margin for implementing TP measures is instead tariff overhangs, the difference between WTO bound and applied tariffs. Lower tariff overhangs constrain countries to raise their MFN applied rates without legal repercussions, independent of past tariff changes. Using detailed sectoral data for a sample of 30 WTO member countries during the period 1996–2014, I find strong evidence for an inverse link between tariff overhangs and TP activity. This result implies that tariff overhangs and TP measures are substitutes, vindicating the importance of existing tariff commitments as a key determinant of alternative protection instruments.
Recent studies on the China–US trade war surprisingly find complete tariff pass‐through into import prices for both China and the United States. This paper provides additional evidence of tariff ...pass‐through in China. Using firm‐level monthly trade transaction data, we estimate the tariff pass‐through for Chinese imports in the period of WTO accession during 2000–2006. Consistent with evidence during the trade war, tariff pass‐through is also complete for tariff reductions induced by the WTO accession. Structural estimates of export supply elasticity also imply complete tariff pass‐through. Additionally, we find the complete pass‐through result holds regardless of firm ownership types, product end‐use, or China's market share in world imports.