WTO Working Papers

WTO working papers usually represent research in progress. Such research may be conducted in the preparation of WTO Secretariat reports, studies or other material for WTO members. The papers are circulated for comment because the WTO considers critical review of professional research to be extremely important.


Non-Tariff Measures and the WTO

In this paper I sketch out the rough contours of the challenge faced by the WTO in dealing with non-tariff measures (NTMs) as seen from the economic theories of trade agreements. The key questions for the WTO - the answers to which largely dictate the choice between shallow and deep approaches to integration – appear to be two: (1) Is it the terms-of-trade problem or the commitment problem that WTO member governments seek to solve with their WTO membership?; and (2) Is it market clearing or offshoring/bilateral bargaining that is now the most prominent mechanism for the determination of international prices? I suggest that evidence on the first question points to the terms-of-trade theory and hence toward shallow integration, but that answering the second question may be the key to identifying the best way forward on NTMs for the WTO.


Keywords: commitment, border measures, offshoring, "terms of trade, bilateral bargaining, behind-the-border measures
JEL: D62: Microeconomics / Welfare Economics / Externalities; F13: International Economics / Trade / Trade Policy; International Trade Organizations; H21: Public Economics / Taxation, Subsidies, and Revenue / Taxation and Subsidies: Efficiency; Optimal Taxation; F55: International Economics / International Relations, National Security, and International Political Economy / International Institutional Arrangements; H23: Public Economics / Taxation, Subsidies, and Revenue / Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
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