The Role of Multilateral Institutions in International Trade Cooperation
- (pp. 190-214)
AbstractThe World Trade Organization (WFO) lacks the power to directly enforce agreements. It is, therefore, important to understand what role the WTO can play to facilitate international cooperation and whether a multilateral institution can offer distinct advantages over a web of bilateral agreements. This paper examines two potential benefits of a multilateral trade institution: first, verifying violations of the agreements and informing third parties, thus facilitating multilateral reputation mechanisms; second, promoting multilateral trade negotiations rather than a web of bilateral negotiations. The model suggests that a multilateral approach is particularly important when there are strong imbalances in bilateral trading relationships.
Citation1999. "The Role of Multilateral Institutions in International Trade Cooperation." American Economic Review, 89(1): 190-214. DOI: 10.1257/aer.89.1.190
- F13 Trade Policy; International Trade Organizations