@article{wto:/content/papers/25189808/76, author = "World Trade Organization", title = "A ‘New Trade’ Theory of GATT/WTO Negotiations", journal= "WTO", year = "2009", volume = "", number = "", pages = "", doi = "https://doi.org/10.30875/dfceab11-en", url = "https://www.wto-ilibrary.org/content/papers/25189808/76", publisher = "WTO", issn = "", type = "", abstract = "I develop a novel theory of GATT/WTO negotiations. This theory provides new answers to two prominent questions in the trade policy literature: first, what is the purpose of trade negotiations? And second, what is the role played by the fundamental GATT/WTO principles of reciprocity and nondiscrimination? Relative to the standard terms-of-trade theory of GATT/WTO negotiations, my theory makes two main contributions: first, it builds on a ‘new trade’ model rather than the neoclassical trade model and therefore sheds new light on GATT/WTO negotiations between similar countries. Second, it relies on a production relocation externality rather than the terms-of-trade externality and therefore demonstrates that the terms-of-trade externality is not the only trade policy externality, which can be internalized in GATT/WTO negotiations.", }