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Special and differential treatment of developing countries in the WTO
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Conconi, Paola and Perroni, Carlo (2015) Special and differential treatment of developing countries in the WTO. World Trade Review, 14 (1). pp. 67-86. doi:10.1017/S147474561400041X ISSN 1474-7456.
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Official URL: http://dx.doi.org/10.1017/S147474561400041X
Abstract
In this paper, we examine the theoretical rationale for WTO rules on the special and differential treatment (SDT) of developing countries. We describe a model of bilateral trade between a small country and a large trading partner, in which the small country suffers from a domestic commitment problem in trade policy. This problem arises because investors in the import-competing sector lobby the government to enact and maintain protectionist policies. We show that a reciprocal trade agreement, in which the large country lowers its tariffs conditionally on the small country doing the same, creates a ‘carrot and stick’ mechanisms that helps the small country to overcome its commitment problem. If capacity in the import-competing sector can only be reduced gradually, the agreement may need to allow the small country to delay the implementation of its trade liberalization commitments, in line with SDT provisions in the WTO. Our analysis suggests that, if reconciled with the principle of reciprocity, SDT can help developing countries to liberalize and improve their trading prospects.
| Item Type: | Journal Article | ||||||
|---|---|---|---|---|---|---|---|
| Subjects: | H Social Sciences > HC Economic History and Conditions | ||||||
| Divisions: | Faculty of Social Sciences > Economics | ||||||
| Library of Congress Subject Headings (LCSH): | Developing countries -- Economic aspects , World Trade Organization, Commercial treaties , Tariff , Protectionism, Lobbying | ||||||
| Journal or Publication Title: | World Trade Review | ||||||
| Publisher: | Cambridge University Press | ||||||
| ISSN: | 1474-7456 | ||||||
| Official Date: | 2 January 2015 | ||||||
| Dates: |
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| Volume: | 14 | ||||||
| Number: | 1 | ||||||
| Page Range: | pp. 67-86 | ||||||
| DOI: | 10.1017/S147474561400041X | ||||||
| Status: | Peer Reviewed | ||||||
| Publication Status: | Published | ||||||
| Access rights to Published version: | Restricted or Subscription Access | ||||||
| Date of first compliant deposit: | 7 September 2016 | ||||||
| Date of first compliant Open Access: | 7 September 2016 | ||||||
| Funder: | Fonds national de la recherche scientifique (Belgium) (FNRS) |
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