, and seminar participants at various universities and conferences for very helpful comments and suggestions. Seyed Ali Madanizadeh provided excellent research assistance. This work is supported by the Business and Public Policy Faculty Research Fund at the University of Chicago Booth School of Business. The usual disclaimer applies. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

I would like to thank two referees as well as Ariel Burstein, Kerem Cosar, Chang-Tai Hsieh, and Anson Soderbery for useful comments and discussions. This work is supported by the Business and Public Policy Faculty Research Fund at the University of Chicago Booth School of Business. The usual disclaimer applies. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

I suggest a novel theory of GATT/WTO negotiations based on Krugman's "new trade" model. It emphasizes international production relocations and is easy to calibrate to bilateral trade data. Focusing on the major players in recent GATT/WTO negotiations, I find that it implies reasonable noncooperative tariffs as well as moderate gains from GATT/WTO negotiations. A "New Trade" Theory of GATT/WTO Negotiations Ralph Ossa University of Chicago and National Bureau of Economic ResearchI suggest a novel theory of GATT/WTO negotiations based on Krugman's "new trade" model. It emphasizes international production relocations and is easy to calibrate to bilateral trade data. Focusing on the major players in recent GATT/WTO negotiations, I find that it implies reasonable noncooperative tariffs as well as moderate gains from GATT/WTO negotiations.

I suggest a novel theory of GATT/WTO negotiations based on Krugman's "new trade" model. It emphasizes international production relocations and is easy to calibrate to bilateral trade data. Focusing on the major players in recent GATT/WTO negotiations, I find that it implies reasonable noncooperative tariffs as well as moderate gains from GATT/WTO negotiations. A "New Trade" Theory of GATT/WTO Negotiations Ralph Ossa University of Chicago and National Bureau of Economic ResearchI suggest a novel theory of GATT/WTO negotiations based on Krugman's "new trade" model. It emphasizes international production relocations and is easy to calibrate to bilateral trade data. Focusing on the major players in recent GATT/WTO negotiations, I find that it implies reasonable noncooperative tariffs as well as moderate gains from GATT/WTO negotiations.

How does a country's productivity growth a¤ect worldwide real incomes through international trade? In this paper, we take this classic question to the data by measuring the spillover e¤ects of China's productivity growth. Our framework features traditional terms-of-trade e¤ects and new trade home market e¤ects as suggested by the theoretical literature and works from a reference point which perfectly matches industry-level trade.Focusing on the years 1995 to 2007, we …nd that the cumulative welfare e¤ect on individual regions ranges between -1.2 percent and 3.6 percent and only 3.0 percent of the worldwide gains of China's productivity growth accrue to the rest of the world.JEL classi…cation: F1, F4, O4