Issue Linkage, Delegation, and International Policy Cooperation

Abstract

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Is the WTO Passé?

“…In this section, we consider these new agreements and discuss economic research utilizing the terms-of-trade theory 86 Retaliation in Limão's (2005) repeated-game model occurs off the equilibrium path and thus carries the interpretation of a breakdown in cooperation with respect to the relevant policies. 87 See also Spagnolo (1999aSpagnolo ( , 1999b, who develops related themes for a distinct class of interdependent payoffs. that interprets and evaluates the provisions contained therein.…”

Domestic Policies, National Sovereignty, and International Economic Institutions

“…6 liberalization, and therefore necessary as well for considering how the issue of labor and environmental standards ought to be approached by the WTO. In this regard, there is a small but growing formal literature on the question of "issue linkage" in trade agreements (see, for example, Ederington, 1999, andSpagnolo, 1999) in which this interaction is a central concern. These papers consider how to structure enforcement provisions when there is a range of policies over which governments are attempting to cooperate.…”

“…But it is also true that in this case the need to involve the WTO is dubious, except perhaps for reasons of enforcement (and even here the case is not without qualification; see, for example, Roessler, 1998, Ederington, 1999and Spagnolo, 1999. The more pressing question for the WTO is whether and how to handle the pecuniary externalities associated with the choice of local standards, since these externalities travel through trade and are therefore inextricably intertwined with the business of the WTO.…”

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

“…One possible answer is that it too is subject to negotiation. 14 Alternatively, it may be that these structures have been institutionalized through various international arrangements or organizations. In this case, the analysis above will be useful for understanding these institutions and for determining who gains and loses from them.…”

“…Spagnolo (2000) argues that linking provides for more e¢cient enforcement of agreements by permitting more severe punishments for breaking the agreement. By contrast, Bagwell and Staiger (1999) argue that linking negotiations on trade with ones on domestic standards provides no bene…ts that can't be obtained without linking.…”