NATIONAL TREATMENT AT THE WTO: THE ROLES OF PRODUCT AND COUNTRY HETEROGENEITY

Kamal Saggi () and Nese Sara

Chapter 3 in Economic Analysis of the Rules and Regulations of the World Trade Organization, 2018, pp 46-75 from World Scientific Publishing Co. Pte. Ltd.

Abstract: This paper analyzes the World Trade Organization’s (WTO’s) national treatment (NT) clause in a two-country model where quality of goods and/or market size are heterogenous across countries. When market size is symmetric across countries, a reciprocal NT agreement (i) benefits the high-quality country, (ii) hurts the low-quality country, and (iii) delivers higher aggregate world welfare. However, such an agreement can arise in equilibrium if the high-quality country’s market is relatively bigger and the quality gap between goods is small (i.e., goods are sufficiently alike). The qualitative nature of these results does not change when quality is endogenously determined.

Keywords: Multilateral Trading System; Trade Agreements; Trade Liberalization; International Tariff Cooperation; WTO Disputes; Case Studies (search for similar items in EconPapers)
JEL-codes: F13 (search for similar items in EconPapers)
Date: 2018
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Journal Article: NATIONAL TREATMENT AT THE WTO: THE ROLES OF PRODUCT AND COUNTRY HETEROGENEITY (2008)
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