Multi-Issue Bargaining and Linked Agendas: Ricardo Revisited or No Pain No Gain

Ignatius Horstmann, James Markusen and Jack Robles

No 8347, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: There has been much discussion about what issues should be included in international 'trade' negotiations. Different countries, firms and activists groups have quite different views regarding which items should (or should not) be negotiated together. Proposals run the gamut from no linking to linking trade with investment, the environment, labor and human-rights codes. This paper provides a formal framework for analyzing these questions. It employs a two-country, two-issue bargaining model and contrasts outcomes when issues are negotiated separately and when they are linked in some form. A key concept is 'comparative interest', analogous to Ricardian comparative advantage. We provide general results and note, in particular, where a country can benefit by agreeing to include an agenda item for which, when viewed by itself, the country does not receive a positive payoff.

JEL-codes: F13 F2 (search for similar items in EconPapers)
Date: 2001-06
Note: ITI
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Published as Horstmann, Ignatius J., James R. Markusen and Jack Robles. "Issue Linking In Trading Negotiations: Ricardo Revisited Or Not Pain No Gain," Review of International Economics, 2005, v13(2,May), 185-204.

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