WTO Working Papers

This paper assesses the impact of the 2005 multilateral Hong Kong Ministerial decision on duty free quota free (DFQF) market access for products originating in Least developed countries (LDCs) on the latter's export performance. The analysis is conducted over a sample of 41 LDCs, with data spanning the period 1998-2013. The empirical analysis examines both the average effect and the short term/medium term effect. Results indicate that on average, this multilateral decision has exerted a positive effect on LDCs' performance on merchandise exports, with this average positive effect being solely driven by a positive effect on LDCs' export performance on primary products; the average effect on manufacturing exports has been statistically nil. In the short and medium term, this decision has exerted a positive effect on LDCs' merchandise export performance, as well as on the components of the latter, namely both primary product exports and manufacturing exports. However, the positive effect on primary product exports appears to be far higher than that on manufacturing exports. These findings have important policy implications regarding reflections on the way LDCs could utilize their policy flexibilities in the WTO Agreements to diversify their exports away from the primary sector and toward manufacturing and/or services sector.

The unbundling of trade across regions offers unique opportunities for SMEs to integrate into global trade notably through their involvement into supply-chains. With supplychains shifting and expanding into new regions of the world, the challenge for SMEs to accessing financing remains an important one; in many developing and emerging market economies, the capacity of the local financial sector to support new traders is limited. Moreover, after the financial crisis, several global banks have "retrenched", for various reasons. In this context, supply-chain finance arrangements, and other alternative forms of financing such as through factoring, have proven increasingly popular among traders. This paper shows that factoring has a positive effect in allowing SMEs to access international trade, in countries in which it is available. Factoring also appears to be employed by firms involved in global supply chains. We employ for the first time data on factoring from Factor Chain International (FCI), the most extensive dataset on factoring available at the moment, for the period of 2008-2015. Using an instrumentation strategy we identify a strong, stable effect of factoring on SMEs access to capital for some of the main traders in the world.

The average international trade transaction is subject to numerous procedural and documentation requirements, which add to the costs of doing business as an importer or exporter and also use up scarce government resources. While these requirements can be necessary to fulfil policy objectives, questions are often raised about why and how they are implemented. The Trade Facilitation Agreement (TFA), adopted by WTO Members in 2014, seeks to expedite the movement, release and clearance of goods across borders and reduce these trade transaction costs - by an average of 14.3 per cent as estimated by the 2015 World Trade Report. At the same time, many WTO Agreements already contain provisions aimed at facilitating trade procedures and avoiding unnecessary costs. The Agreement on Technical Barriers to Trade (the TBT Agreement) is one of these: its provisions on transparency and conformity assessment procedures, some of which are applied at the border, are of particular relevance in this context. The TFA and TBT Agreements are in fact complementary, with the TFA introducing some new requirements/recommendations, which are likely to apply to certain TBT measures. This paper maps out the linkages between these two Agreements. It does so with a view to informing TBT officials of the requirements and best practices emerging in the trade facilitation area as well as raising awareness amongst trade/customs officials of existing rules and evolving practices in the TBT area. The 2015 World Trade Report refers to “border agency cooperation” as the main TFA implementation challenge identified by developing countries and also points to the importance of cooperation and coordination between ministries as one of the main success factors. Considering that a significant share of import/export procedures and controls arise from the implementation of TBT measures, a better understanding of the linkages between the TFA and the TBT Agreement (as well as other relevant WTO Agreements such as the SPS Agreement) will be crucial for effective implementation. It will also contribute to more streamlined technical assistance activities and raise awareness among TBT officials of the opportunities generated by trade facilitation projects. The procedures and practices of the WTO TBT Committee, especially with regards to transparency and specific trade concerns, could also be of interest to the future TFA Committee, as it embarks on its task of furthering the implementation of the TFA. All these in turn will help reap the expected benefits of the new Trade Facilitation Agreement.

The GATS does not offer a definition of "services", but services need to be identified and classified for the operation of the Agreement, especially for the scheduling of specific commitments on market access and national treatment. There is no obligation on WTO Members to use any particular classification system in undertaking commitments. Nevertheless, an informal document produced for the services negotiation during the Uruguay Round, the Services Sectoral Classification List (W/120), was used and continues to be used as the principal guiding classification system, not only in the WTO, but also in bilateral and plurilateral services trade negotiations outside of the WTO. WTO jurisprudence has also noted the role of W/120 in the determination of sectoral coverage of GATS commitments. However, services classification does not receive enough attention it deserves. This paper attempts to make contribution by providing an overview of services classification and highlighting its relevance to both trade negotiations and WTO dispute settlement. It consists of four sections. Section I reviews how a services classification system was introduced into the multilateral trading system and describes the main features of W120. Section II takes a closer look at some aspects of the classification system, drawing attention to challenges in its application, which arise from inter alia services with multiple end-uses, overlaps between sectors, and the issue of "new services". Section III considers the implications of classification on GATS commitments by examining a number of WTO dispute settlement cases. Section IV concludes. In conclusion, the paper underlines the importance of services classification in assisting governments in clearly and accurately undertaking commitments. It also notes that WTO Members have taken or suggested various pragmatic approaches to addressing challenges in the application of the current services classification system. The proposed approaches again highlight the role of classification in ensuring the clarity, certainty and predictability of specific commitments in services.

This paper investigates whether TBT provisions included in RTAs differ from those under the WTO TBT Agreement, and, if they do, whether they entail broader commitments. Our analysis covers 238 RTAs, of which 171 include at least one provision, and focuses on the provisions on technical regulations, conformity assessment procedures, transparency, dispute settlement, marking and labelling and sector-specific commitments. We find that all RTAs signed since 2010 systematically include TBT provisions and that the most frequent provisions are those referring to the TBT Agreement and transparency. Moreover, even if there are RTAs that include new or broader commitments than the TBT Agreement, our study shows that their number remains very limited. For instance, relatively few RTAs have included provisions to better implement WTO provisions in the area of transparency or provisions requiring the equivalence or harmonization of technical regulations among the parties or even the recognition of conformity assessment results. RTAs with a dispute settlement provision that applies exclusively to TBT issues are also very few. These RTAs give in general exclusive jurisdiction to the WTO DSM over TBT related disputes. Finally, also only a minority of RTAs include provisions on new issues such as marking and labelling or sector-specific provisions, typically for electric and electronic products, pharmaceuticals or vehicles.

In 2003, the WTO General Council decided to provide an additional legal pathway for WTO Members with insufficient or no manufacturing capacities in the pharmaceutical sector to access medicines. Two years later, in 2005, WTO Members unanimously agreed to give this mechanism, often referred to as the "Paragraph 6 System", a permanent legal status when they adopted the Protocol Amending the TRIPS Agreement. The implementation and use of the additional pro-public health flexibilities provided by the System is optional, not mandatory. To take advantage of them, as of July 2015, 51 WTO Members have adopted specific implementing measures with a variable degree of detail and complexity which incorporate the Paragraph 6 System in their respective legal frameworks and provide the basis for them to act either as exporter or as importers, or as both. This represents almost a third of the WTO Membership, and the predominant bulk of existing pharmaceutical exporters. Given that, unlike other flexibilities in the TRIPS Agreement, the Paragraph 6 System was devised as a new mechanism without previous domestic experience to draw upon, there seems to be an exceptional need for an in-depth discussion of how it has been implemented at country level to which this paper attempts to respond. There is, indeed, often limited knowledge in the policy and procurement communities about the wide range of specific measures that have been introduced in many major exporters of medicines and the importance of this information both from a practical point of view, to facilitate exports of needed medicines, and from a policy point of view, to understand the implementation of this novel tool for access to medicines. To contribute to a better understanding of how the System has been implemented in practice, this paper surveys domestic measures that WTO Members have put in place. By doing so, it can inform the broader dialogue about access to medicines and provide practical information for procurement programmes. It can also put a valuable source of information and inspiration at the disposal of those Members who are yet in the process of considering whether and how best to implement the Paragraph 6 System in their domestic legal framework. While the survey illustrates that a robust framework supportive of the export of generic medicines to meet public health needs has been put in place by a significant number of WTO Members, there is an obvious need to move a step forward and engage in a substantive review of the System, including if and how better, more frequent use could be made of it. To conclude, the paper therefore offers some elements for reflection regarding the way forward in order to support the functioning of the Paragraph 6 System.

This paper studies the effects of trade policy uncertainty on the extensive and the intensive margins of trade for a sample of 149 exporters at the HS6 digit level. We measure trade policy uncertainty as the gap between binding tariff commitments under trade agreements (multilateral and regional agreements) and applied tariffs- what is also known as tariffs’ water. Our results show that trade policy uncertainty is an important barrier to export. On average the elimination of water increases the probability of exporting by 12 percent. A one percent decrease of water also increases export volumes by one percent. We also find that the negative impact of trade policy uncertainty is higher for countries with low quality of institutions and in the presence of global value chains. Finally, our findings show that on average trade policy uncertainty is equivalent to a level of tariffs between 1.7 and 8.7 percentage points.

This paper analyses the role of services in international trade through the lens of global value chains (GVCs). Services account for more than 70% of world GDP but only for around 20% of world trade in balance of payments terms. In value added terms, accounting for services embodied in exported goods, services account for 40% of world trade. Services industries increasingly produce in networked or "fragmented" arrangements. The paper lays out conceptual and measurement issues related to services networks and provides evidence based on trade in value added statistics and on a case study on the film industry. In contrast to goods value chains, services networks appear less fragmented internationally based on trade in value added statistics and survey evidence. However, to better capture the international services fragmentation, advances in statistics by enterprise characteristics and by mode of supply, i.e. taking into account the movement of labour and capital, are required.

The WTO’s plurilateral Information Technology Agreement (ITA) reduced tariffs to zero on many IT products. This paper presents a comprehensive study of its trade impacts by incorporating recent insights from both the global value chain (GVC) and time in trade literatures. Inserting tariffs directly into the gravity equation breaks the ITAs impact down into four layers. Import demand elasticities are found to be non-linear: Tariff reduction (layer 1) has relatively small impacts, while complete tariff elimination (layer 2) has high impacts, especially for intermediate goods. Beyond that, ITA accession has positive non-tariff effects on both imports (layer 3) and exports (layer 4). These commitment effects suggest that higher trade policy certainty affects investment and sourcing decisions in favour of signatories: Their ITA exports performed better relative to other ICT and machinery exports, unlike non-members. But “passive signatories” – which joined mainly as a by-product of a larger policy objective – reaped the most benefits. Featuring a smaller ITA sector upon accession, their final good exports increased also in absolute terms due to downstream GVC integration. However, such impacts are strongly heterogeneous with respect to countries’ geographical remoteness, education levels, business environment and institutions. China stands out with especially strong post-accession export increases, also extending to intermediate goods.

Albeit nominal tariffs have been decreasing in the past decades, the rise of global manufacturing along global value chains lead to their accumulation along the international supply chain. The calculation of effective protection rates provides important insights on the impact of nominal protection on the international competitiveness of industries in a trade in tasks perspective. Building on the results of the OECD-WTO Trade in Value-Added TiVAdatabase, the paper analyses the evolution of effective protection in about 50 developed and developing countries from 1995 to 2008. The paper reviews also the role of preferential agreements on effective protection as well as the impact of tariffs on the production costs of services. A final chapter is dedicated to exploring the underlying patterns that may exist beyond the EPR profiles.

Transitioning from the post-2008 financial meltdown to a sustained period of global growth and prosperity involves a major challenge: how to ensure the effective management of international economic interdependence. Trade, growth, good governance and sustainable development constitute essential ingredients to any solution, as is a fairer distribution of the gains of trade. Two issues stand out in this conversation. The first concerns the unfinished business of the global fight against the scourge of poverty, which impacts one region more than most: Africa. At the same time, a key pre-requisite for economic performance - affordable and efficient public infrastructure and services – remains lacking in this region – notably, in Sub-Saharan Africa. To address this, the region itself has initiated a major, long-term, continent-wide infrastructure development programme which is intended to fix this problem sustainably - namely, the Programme for Infrastructure Development in Africa (PIDA). Its success foreshadows an economic transformation that will potentially usher in an emergent Africa in the 21st century. Secondly, in one area of economic activity – trade in government procurement markets - the revised WTO Agreement on Government Procurement (GPA) is emerging as a multi-dimensional tool of trade, governance and development. The thesis of this paper is that GPA participation by African countries - a prospect which, to date, they have declined to take up - holds strong potential to reinforce the positive effects of PIDA and to contribute to the region's growth and development more generally. Developing this thesis, the paper examines the possible application of the GPA to support Africa's infrastructure programme, drawing on its three dimensions of instrument of governance, market access instrument, and 'policy space' instrument in support of the development, financial and trade needs of developing countries. Based on the analysis, the paper concludes that the potential benefits outweigh the potential costs of participation in the GPA by African countries, and, accordingly, that the GPA merits consideration by the region in this regard. A successful implementation of the infrastructure programme also portends a significant expansion in the size of the African government procurement market. Were African countries to accede to the Agreement in this context, it would constitute not only a big rise in membership numbers, but also a significant expansion in the value of market access under the Agreement. The broad outlines of a potential win-win scenario for both African countries and GPA Parties thus begin to emerge. The paper, nonetheless, acknowledges that delivering these benefits would involve significant practical and political challenges. It concludes that if the challenges can be overcome and the mutual benefits delivered, the revised GPA would have been demonstrated as an effective tool for balancing flexibility and reciprocity in the government procurement sector, consistent with sustainable development principles, with the capability to deliver win-win benefits for a broad range of stakeholders, in the post-2015 era.

We examine in this paper the impact of the tightening of IPRs, notably patents rights, and the adoption of utility model laws on export diversification. To perform our analysis, we used panel data covering 89 developing and developed countries (of which 55 developing countries) over the period 1975 – 2003, and Lewbel (-2012-)'s instrumental variable technique. Our results lead us to conclude that for developing countries, legal protection for minor and adaptive inventions could be a springboard for further strengthening of IPRs protection in spurring export diversification, which is essential for the structural change needed for their economic development.

Bangladesh's international image is not as a popular tourism destination, and many people might be surprised to learn it has three World Heritage sites, including the Sundarbans tiger reserves. Moreover, it is part of important travel circuits for cultural and religious tourism, and has demonstrated potential for sports tourism. The objective of this working paper is to critically test the assertion that pro-poor "green" tourism is one of the best development options for the majority of least developed countries (LDCs) -- a challenging task in Bangladesh in the face of the country's success as an exporter of readymade garments -- by comparing tourism to the available alternatives with regard to the crucial government priorities of export diversification, employment generation and the "green economy". It is well-known that Bangladesh is under strong pressure to diversify its exports, to generate new employment (especially in rural areas), and to respond to critical environmental issues. The government has identified over 30 "thrust sectors" (including tourism) to help address these challenges, but otherwise tourism is rarely mentioned as a major trade and development option for Bangladesh. Within the limitations of data availability, this working paper reaches the conclusion that greater efforts to develop "green" tourism would be highly beneficial for facilitating rural development, environmental and cultural protection, gender equality, and export diversification in services. The most obvious current impediments are inadequate infrastructure, lack of investment and (typically election year) political conflict, but behind these factors appear to be a serious lack of stakeholder coordination, insufficient regulatory and administrative transparency and coherence, as well as some government reluctance to relinquish greater commercial autonomy in tourism to the private sector. This paper offers extensive analysis and some suggestions to help address the impediments, including the recommendation to create a Bangladesh Tourism Stakeholders Forum.

Most international commerce is carried out by multinational firms, which use their foreign affiliates for the majority of their foreign sales. In this paper, I examine the determinants of multinational firms’ location and production decisions and the welfare implications of multinational production. The few existing quantitative general equilibrium models that incorporate multinational firms achieve tractability by assuming away export platforms – i.e. they do not allow foreign affiliates of multinationals to export – or by ignoring fixed costs associated with foreign investment. I develop a quantifiable multi-country general equilibrium model, which tractably handles multinational firms that engage in export platform sales and that face fixed costs of foreign investment. I first estimate the model using German firm-level data to uncover the size and nature of costs of multinational enterprise and show that fixed costs of foreign investment are large. Second, I calibrate the model to data on trade and multinational production for twelve European and North American countries. Counterfactual results reveal that multinationals play an important role in transmitting technological improvements to foreign countries as they can jump the barriers to international trade; I find that a twenty percent increase in the productivity of US firms leads to welfare gains in foreign countries an order of magnitude larger than in a world in which multinational production is disallowed. I demonstrate the usefulness of the model for current policy analysis by studying the pending Canada-EU trade and investment agreement; I find that a twenty percent drop in the barriers to foreign production between the signatories would divert about seven percent of the production of EU multinationals from the US to Canada.

How do information frictions distort international trade? This paper exploits a unique historical experiment to estimate the magnitude of these distortions: the establishment of the transatlantic telegraph connection in 1866. I use a newly collected data set based on historical newspaper records that provides daily data on information flows across the Atlantic together with detailed, daily information on prices and trade flows of cotton. Information frictions result in large and volatile deviations from the Law of One Price. What is more, the elimination of information frictions has real effects: Exports respond to information about foreign demand shocks. Average trade flows increase after the telegraph and become more volatile, providing a more efficient response to demand shocks. I build a model of international trade that can explain the empirical evidence. In the model, exporters use the latest news about a foreign market to forecast expected selling prices when their exports arrive at the destination Their forecast error is smaller and less volatile the more recent the available information. I estimate the welfare gains from information transmission through the telegraph to be roughly equivalent to those from abolishing a 6% ad valorem tariff.

The United Nations' post--2015- development agenda is taking shape. Like its predecessor the Millennium Development Goals, the post--2015- agenda will reshape development policy priorities for governments and non-governmental actors alike, in many cases galvanising new attention, thinking, and financing to tackle the priorities it identifies. This essay reviews the historical and ongoing role played by trade in sustained high growth and human development progress, and makes the case that the post--2015- development agenda should include considerations related to trade rules and supply-side capacity. Given the strong links between trade-led growth, economic upgrading, and poverty reduction, the paper argues that trade led economic growth must be prioritised in the post--2015- development agenda.

The paper builds a typology of value-added traders according to their economic and trade policy characteristics. In the process, it defines clusters of countries according to the multidimensional criteria defined by value-added, economic and trade policy indicators. A second approach focuses on the relationships existing between the variables themselves, using multicriteria and graph analysis. Natural resources endowments, on the one hand, and services orientation, on the other one, are among the most determinant variables for defining Trade in Value Added (TiVA) clusters. The level of economic development remains a crucial determinant of the TiVA profile as is the size of the economy, even if not as important as initially expected. Proactive GVC up-grading strategies, such as investments in ICT and R&D tend to foster a higher foreign content in exports, compensating the lower domestic margin by higher volumes. Inwardoriented protectionist policies are not particularly successful in exporting higher share of domestic content, except in services exports; but in this case, export volumes remain marginal.

The paper chronicles the negotiating history of the recently concluded Trade Facilitation Accord. Analysing the various stages of the decade-long effort to get the Agreement off the ground, it examines what was at stake in the negotiations, how they evolved and why they finally succeeded - despite many obstacles and detours along the way. The study also suggests ways in which the exercise has broken new ground – for Trade Facilitation rule-making at the global level, for how WTO Members negotiate agreements, and for the world trading system as a whole.

We argue that the trend toward international investment agreements (IIAs) with stricter investment rules is driven by competitive diffusion, namely defensive moves of developing countries concerned about foreign direct investment (FDI) diversion in favor of competing host countries. Accounting for spatial dependence in the formation of bilateral investment treaties (BITs) and preferential trade agreements (PTAs) that contain investment provisions, we find that the increase in agreements with stricter provisions on investor-state dispute settlement and pre-establishment national treatment is a contagious process. Specifically, a developing country is more likely to sign an agreement with weak investment provisions if other developing countries that compete for FDI from the same developed country have previously signed agreements with similarly weak provisions. Conversely, contagion in agreements with strong provisions exclusively derives from agreements with strong provisions that other FDI-competing developing countries have previously signed with a specific developed source country of FDI.

Trade finance, particularly in the form of short-term, self-liquidating letters of credit and the like, has received relatively favourable treatment regarding capital adequacy and liquidity under Basel III, the new international prudential framework. However, concerns have been expressed over the potential” unintended consequences” of applying the newly created leverage ratio to these instruments, notably for developing countries’ trade. This paper offers a relatively simple model approach showing the conditions under which the initially proposed 100% leverage tax on non-leveraged activities such as letters of credit would reduce their natural attractiveness relative to higher-risk, less collateralized assets, which may stand in the balance sheet of banks. Under these conditions, the model shows that leverage ratio may nullify in part the effect of the low capital ratio that is commensurate to the low risk of such instruments. The decision by the Basel committee on 12 January 2014 to reduce the leverage ratio seems to be justified by the analytical framework developed in this paper.

LDCs' trade patterns changed in the past decade, thanks to the rebalancing of global demand towards large emerging countries and the resulting cycle of high international commodity prices. This process led to a wider geographical diversification of LDCs' exports but contributed also to a greater reliance on those highly priced commodities. Notwithstanding some progress in market and product diversification — including services — LDCs remain particularly vulnerable to external shocks. With the exception of 2006-2008, the LDCs as a group have systematically recorded a trade deficit. The 2008-2009 global crisis and the bumpy recovery which followed illustrate the volatility of the recent trends. In such a perspective, renewed efforts towards extensive product diversification are called for. Fostering diversification has been supported for many years by preferential market access to developed countries; more recently, emerging countries have also been granting such preferences to LDCs products. Preferential market access remains relevant, but is not sufficient to improve the supply-side capabilities. The new business model related to global value chains (GVC) offers new opportunities to LDCs for export diversification. But GVC participation cannot materialize without a proper trade environment. Some of the main obstacles for joining GVCs are the high transaction costs in importing the necessary inputs and exporting the processed goods. Active trade facilitation programmes, such as those identified during the Fourth Global Review of Aid for Trade in July 2013 offer new options to LDCs for joining GVCs. For those LDCs that have already been able to join these global production network, up-grading towards higher "value-added" activities requires more encompassing horizontal policies.

This study surveys safeguard provisions on trade in goods in 232 regional trade agreements (RTAs) notified to the GATT/WTO up to 31 December 2012. In particular, it identifies those RTAs that modify the conditions applicable to the RTA partner (either substantively or procedurally) in the event that a global safeguard is invoked. In the case of bilateral (or intra-RTA safeguards), the study analyses provisions governing injury assessment, causation, conditions for the invocation of a measure and the types of measures that may be employed. We use the yardstick of GATT Article XIX and the WTO Safeguards Agreement to determine whether the provisions applicable to bilateral safeguard measures are more or less stringent than the corresponding multilateral rules. The study also includes an inventory of infant industry, balance of payments, and special safeguards applicable to agricultural products found in RTAs. We demonstrate through various examples that safeguard provisions have become more prescriptive in recent years, though little homogeneity in their design is found even for a given country. In the case of global safeguards, roughly a quarter of RTAs provide for the possible exclusion of the RTA partner, subject to certain criteria, thus discriminating against non-parties. In the case of bilateral safeguards, some RTAs use looser language to define the trigger mechanism to invoke a safeguard and to determine injury standards, thus potentially offering greater scope to use such measures. We found wide variety in the types of bilateral safeguard measures that are permitted in RTAs. A number of more recent RTAs tighten the conditions for application of a bilateral safeguard through limiting the duration of the safeguard measure, allowing the use of tariff-based measures only, and binding the use of the measure to the transition period. Other RTAs specify neither the length of the bilateral safeguard measure nor the conditions for its reapplication, thus providing greater scope to impose such measures than in the multilateral context.

This paper deals with claims, recently raised in various circles, that structural faults in the General Agreement on Trade in Services (GATS) have prevented WTO Members from advancing services liberalization under the Agreement. The GATS is generally associated in this context with a bottom-up (positive-list) scheduling approach where the sectors on which trade commitments are undertaken are selected individually. This is claimed to be less efficient, in terms of liberalization effects, than alternative approaches under which everything is considered to be fully committed unless specifically excluded (top-down or negative listing). However, a closer look at services negotiations conducted in various settings, including the Doha-Round process, WTO accession cases and different types of regional trade agreements, suggests that such structural issues have limited, if any, impact on the results achieved. What ultimately matters are not negotiating or scheduling techniques, but the political impetus that the governments concerned are ready to generate.

The WTO TBT Agreement obliges governments to use international standards as a basis for regulation, yet leaves a degree of flexibility with respect to the choice of standard, and the manner of its use. This interplay between obligation and flexibility has given rise to tension in various fora of the WTO. This paper brings together these three distinct strands of WTO work to illustrate core aspects of the international standards debate at the WTO. In our analysis we first briefly outline the nature of the discipline in the TBT Agreement itself; next, we describe where and how the discussion arises in the WTO; and, finally, explore some implications of governance of international standard setting. We propose that greater regulatory alignment could be achieved through a renewed focus on the procedures of setting international standards (the how), and greater emphasis on robust technical/scientific underpinnings of such standards (the what).

This paper analyses the trade effects of restrictive product standards on the margins of trade for a large panel of French firms. To focus on restrictive product standards only, we use a new database compiling the list of measures that have been raised as concerns in dedicated committees of the WTO. We restrict our analysis to the subset of Sanitary and Phyto-Sanitary (SPS) regulatory measures and analyse the effects of product standards on three variables: (i) probability to export and to exit the export market (firm-product extensive margins), (ii) value exported (firm-product intensive margin) and (iii) export prices. In particular we study whether firms size, market shares and export orientation modify the effect of SPS measures. We find that SPS measures discourage exports. We also find a negative effect of SPS imposition on the intensive margins of trade. This paper analyses the trade effects of restrictive product standards on the margins of trade for a large panel of French firms. To focus on restrictive product standards only, we use a new database compiling the list of measures that have been raised as concerns in dedicated committees of the WTO. We restrict our analysis to the subset of Sanitary and Phyto-Sanitary (SPS) regulatory measures and analyse the effects of product standards on three variables: (i) probability to export and to exit the export market (firm-product extensive margins), (ii) value exported (firm-product intensive margin) and (iii) export prices. In particular we study whether firms size, market shares and export orientation modify the effect of SPS measures. We find that SPS measures discourage exports. We also find a negative effect of SPS imposition on the intensive margins of trade. Finally, the negative effects of SPS measures on the extensive and intensive margins of trade are attenuated for big firms.

This paper examines the role of competition law and policy as tools for poverty reduction and development. The authors put forward five related principles, building upon the important work on related issues that has been done by the OECD, the International Competition Network (ICN), UNCTAD and civil society organizations such as CUTS in recent years, in addition to the earlier work done on these topics in the WTO Working Group on the Interaction between Trade and Competition Policy when that body was active from 1997 through 2003. Together, these principles comprise the "holistic approach" to competition law and policy which is referenced in the title of the paper: First, the focus of policy makers in using competition policy as tool for poverty reduction should be on approaches that are relatively easy to implement but have a trackrecord of being effective and economically sound. Second, for competition policy reforms and legislation to be successful, public acceptance and support is critical and must be an essential focus of related initiatives. Third, to serve as an effective tool of poverty reduction, competition policy needs to address the needs of the citizens of poorer societies in their capacities as producers (and, therefore, as users of extensive input goods and services, including public infrastructure), in addition to their capacities as final consumers/households. Fourth, it is posited that "competition policy" is more than just "what competition agencies do" and includes the full spectrum of measures that governments employ to enhance competition and improve the performance of markets. Fifth, in order to address the challenges posed by the changing landscape of competition policy worldwide, new forms of international co-operation may need to be considered. The paper then develops the application of these principles with respect to five specific areas in which competition policy can contribute to poverty reduction, namely: (i) the reform of public and business infrastructure sectors, particularly in the context of developing and transition economies; (ii) the complementary roles of competition law enforcement and market liberalization in public procurement markets; (iii) various related dimensions of competition policy as they relate to public health objectives; (iv) the addressing of possible monopsonistic practices in international supply chains that may affect the ability of developing country producers to reap gains from participation in international markets; and (v) measures to address the enduring problem of international cartels which, despite an impressive record of prosecutions by developed jurisdiction competition agencies over the past decade, continue to impose substantial costs on developing economies. The paper concludes with some observations regarding the future of international cooperation in the competition policy sphere.

"Pro-poor" tourism is arguably one of the best green options for addressing LDC poverty, employment and economic diversification initiatives. Although often neglected as a serious policy option -- and consequently most of its potential still remains untapped -- tourism is the leading export for at least 11 LDCs, and the 2nd or 3rd largest export for another 11 or more. It is also a major source of new employment, especially for women, youth and the rural poor in general. While difficult to measure accurately, tourism's pro-poor impacts are directly related to the achieved level of inter- and intra-sectoral linkages. Taking export diversification, employment generation and the "green economy" in turn, the working paper analyzes feasible LDC alternatives, reaching the conclusion (within the limits of data availability) that -- in contrast with the current overemphasis on agriculture and manufacturing -- green tourism is demonstrably one of the areas of greatest current comparative advantage and development potential for the majority of LDCs, via its extensive upstream and downstream linkages/multiplier effects, employment-generating and poverty alleviation capacities, opportunities for export "test marketing" of new products, sustainability, and largely untapped export opportunities. An economy wide, primarily private-sector approach is an essential element for maximizing tourism benefits -- including its multiple linkages with agriculture and manufacturing -- together with a significant coordinating governmental role to minimize negative externalities. Unfortunately, there is no automatic guarantee that expanding tourism will significantly increase poverty alleviation or local employment generation: the necessary mechanisms must be explicitly included in tourism planning and implementation.

As of November 2010, more than 300 regional trade agreements (RTAs) were in force. Approximately two-thirds of them had been notified to the WTO. Each of these RTAs had, implicitly or explicitly, established a regional legal framework for the application of intra-regional, and sometimes extra-regional, antidumping actions. This study focuses on intra-regional antidumping regimes and has been built around the analysis of antidumping provisions in 192 RTAs. This Working Paper first recalls the main constitutive elements of the multilateral and regional legal frameworks, a pre-requisite to consider if these rules and disciplines are competing with or are complementary to multilateral disciplines. Based on an analysis of these 192 RTAs, the Paper identifies two Categories of regional antidumping regimes, and assesses their relationships with the multilateral rules. Particular attention is paid to antidumping regimes in RTAs, which appear to "diverge" from the WTO disciplines. The Paper concludes that most regional antidumping regimes do not fundamentally change the Parties' rights to take antidumping measures, as compared with the multilateral regime. There appears to be no evidence that regional antidumping regimes increase RTA partners' rights to take antidumping actions at the intra-RTA level, and only a minority of regimes contains disciplines which diverge from multilateral rules, though most of those do not result in fundamental changes in the antidumping patterns of the RTA Parties. The Paper notes, however, that deep integration among a few RTAs has been decisive in bringing about a substantial change in the antidumping patterns of the RTA Parties concerned. It finds that legal consolidation, at the regional level, of a current practice of not using antidumping as a trade policy tool is restricted to a limited number of Parties. A few others seem to have used RTAs to restrict the possibility of using anti-dumping between RTA partners, as compared to multilateral rules. The Paper finally suggests that the proliferation of regional transparency mechanisms, related to antidumping may potentially undermine the oversight role of the multilateral trading system if "information diversion" materializes.

This paper assembles detailed information on the market access provisions in trade in goods contained in 192 active regional trade agreements (RTAs) notified to the WTO as of November 2010. Although market access provisions in trade in goods in RTAs have been addressed in a number of studies, much of this work has been limited to subsets of RTAs, particularly plurilateral RTAs involving three or more parties. The goal of the current study is to expand beyond the more commonly studied RTAs and to include all RTAs notified to the WTO for which data are available. This task has been facilitated by the recent Transparency Mechanism for RTAs (TM), adopted in 2006, that provides the basis for the systematic provision of detailed tariff and trade data by WTO Members engaged in RTAs. This information has been supplemented by other public sources of data, where available. A number of trends are evident. While a majority of RTAs result in a reasonably high degree of liberalization overall (with developing countries often liberalizing as much or more than developed countries), liberalization is not uniform across products or RTA parties. In some RTAs the degree of iberalization appears to be a negotiated outcome, depending on the RTA partner. Agricultural goods continue to be subject to lower levels of liberalization, frequent product exclusions and systematic protection in some RTAs, regardless of the RTA partner's comparative advantage. Nonetheless, a lower level of ambition in some RTAs is tempered by a commitment to negotiate further concessions or expand upon the RTA's scope at some future point: more than half the RTAs analysed contain such a commitment. Much has been written about the potential for the multilateralization of commitments undertaken in RTAs. While there may be scope for positive externalities in terms of regulatory convergence particularly with regard to services liberalization undertaken in RTAs, there is less evidence in this study to suggest that increased market access in merchandise goods leads to a more favourable trading environment for third parties. Continuing constructive engagement by WTO Members in the Transparency Mechanism through the provision of data, timely notifications, and submission of implementation reports will increase the availability of tariff and trade liberalization data, thus facilitating further examination of the topics highlighted in the study as worthy of future research.

The main objective of this paper is to analyse trade flows and tariff policies of health products. The first contribution is to construct three groups of health products based on the 2007 Harmonized System classification of international trade. Using these commodity groups, we analyse trade flows between 167 countries for the years 1996 to 2009. We find that trade in health products has developed very dynamically, with trade in dosified medicine displaying the strongest growth with an annual growth rate of almost 12 per cent. The results further indicate that the market of health products is dominated by a small number of developed countries. Finally, studying the tariffs on health products in preferential trade agreements between developing countries, the results show that the tariff level is low, but in some individual cases still substantive.

Trade finance has received special attention during the financial crisis as one of the potential culprits for the great trade collapse. Several researchers have used micro level data to establish the link between trade finance and trade, especially so during the financial crisis, and have found diverting results. This paper analyses the effect of trade credit on trade on a macro level through a whole cycle. We employ Berne Union data on export credit insurance, the most extensive dataset on trade credits available at the moment, for the period of 2005--2011-. Using an instrumentation strategy we can identify a significantly positive effect of insured trade credit, as a proxy for trade credits, on trade. The effect of insured trade credit on trade is very strong and remains stable over the cycle, not varying between crisis and non-crisis periods.

In a rapidly changing trade environment, marked by economic slowdown and impasse in the Doha Round, the success of the WTO in promoting and legitimizing the rules-based multilateral trading system rests, to a large extent, on maintaining effective relations with civil society, including non-governmental organisations. This paper provides an overview of the WTO's rules and practices for transparency and engagement with NGOs. First, it looks at both internal and external transparency. Second, it deals with how the WTO engages with civil society and illustrates how this has evolved over time. Third, it looks at how NGOs and civil society contribute to the dispute settlement process. In concluding, it explores whether there is scope for enhancing the WTO's current practices for engagement with NGOs, and if so how. It also offers some suggestions on how NGOs can render the WTO more accountable to the public. One area in which the WTO's practices for transparency and channels of engagement with civil society actors has evolved considerably is dispute settlement. Although only WTO members can bring a dispute to the WTO, the practice of opening hearings to the public, upon the parties' request, and inviting contributions from non-members, including NGOs, shows to what extent WTO transparency and engagement with civil society have improved in recent times. In particular, NGOs have assisted parties to a dispute prepare their briefs. This has included annexing studies to the parties's submissions, submitting amicus curiae briefs, and supporting the panel as experts under Article 13 of the WTO's Dispute Settlement Understanding (DSU). Forging links with civil society is a formidable task for any intergovernmental organization; at issue are the rights of governments to set WTO policy and the need to respect the voices of those without a vote. Although the WTO's rules for engagement with civil society based on Article V:2 of the Marrakesh Agreement and further elaborated in the 1996 Guidelines have not been updated, the actual practices for engagement have evolved considerably over time and it is likely that they will continue to be improved upon in the future.

We analyse the degree of preference utilization in four major importing countries (Australia, Canada, EU and US) and provide evidence that preferences are more widely used than previously thought. For Australia and Canada, we have obtained a new dataset on imports by preferential regime that has so far not been publicly available. For the EU and US, we make use of more disaggregated data than previously used in the literature. We empirically test what determines utilization rates. In line with previous studies, we find that utilization increases with both the preferential margin and the volume of exports, suggesting that using preferences can be costly. However, we also find that utilization rates are often very high, even for very small preferential margins and/or very small trade flows, which contradicts numerous estimates that average compliance costs are as high as 2-6%. We extend the existing literature in relation to both data and methodological issues. In particular, we construct "pseudo transaction-level" data that allows us to assess more precisely when available preferences are utilized. Using this methodology, we obtain a more realistic estimate of what determines utilization. Rather than constituting a percentage share of the trade value, our findings indicate that utilization costs involve an important fixed cost element. We provide estimates for such fixed costs, which appear to be in the range of USD 14 to USD 1,500.

The paper reviews a number of issues related to the use of currencies in international trade, more than one decade after the introduction of the euro and shortly after steps taken by the Chinese authorities to liberalize the use of the RMB in off-shore markets. Trade is an important factor in establishing a currency as an international currency, notably by fulfilling the transaction/medium of exchange and unit of account motives of currency demand. A well prepared liberalization of currency use for international trade and foreign direct investment transactions can even be helpful in achieving the international investment and reserve currency status. While in the distant past the later was also linked to preponderance of a country in trade markets, it is now linked to the prevalence of the currency in international financial transactions, which supposes that the country in question engages at least partly in some liberalization of capital account transactions. This paper shows theoretical and practical reasons explaining the current dominance of the US dollar and the euro in the invoicing of international trade. There is little doubt, though, that in the medium-to-long term the RMB will become a major currency of settlement in international trade. This is not only the current direction of government policy but also that of markets, as evidenced by the rapid expansion of off-shore trade payments in that currency. In the meantime, though, the US dollar and the euro are enjoying a nearduopoly as settlement and invoicing currencies in international trade. The stability of this duopoly is enhanced by a number of factors recently highlighted by economic analysis: coalescing, "thick externalities" and scarcity of international currencies are useful to explain that, until such time that RMB payments match at least the share of China in global trade, the US dollar and of the euro will remain the main currencies in the invoicing and payment of international trade. Section 1 looks at the factors that determine the use of currencies in the invoicing and settlement of international trade. Section 2 looks at the actual reality of currency use for international trade flows, and short-term prospects for the development of a possible alternative to the use of the US dollar and the euro (in particular in Asia), the RMB.

This paper studies the relationship between export policy and food prices. We show that, when individuals are loss averse, food exporters may use trade policy to shield the domestic economy from large price shocks. This creates a complementarity between the price of food in international markets and export policy. Specifically, unilateral actions by exporting countries give rise to a "multiplier effect": when a shock in the international food market drives up (down) its price, governments respond by imposing export restrictions (subsidies), thus exacerbating the initial shock and soliciting further export activism. We test this theory with a new dataset that comprises monthly information on trade measures across 125 countries and 29 food products for the period 2008-10, finding evidence of a multiplier effect. Global restrictions in a product (i.e. the share of international trade covered by export restrictions) are positively correlated with the probability of imposing a new export restriction on that product, especially for staple foods. Large exporters are found to be more reactive to restrictive measures, suggesting that the multiplier effect is mostly driven by this group. Finally, we estimate that a 1 per cent surge in global restrictions increased international food prices by 1.1 per cent on average during 2008-10. These findings contribute to inform the broader debate on the proper regulation of export policy within the multilateral trading system.

We study immigration policy in a small receiving economy under self-selection of migrants. We show that a non-discriminatory immigration policy choice affects and is affected by the migratory decisions of skilled and unskilled foreign workers. From this interaction multiple equilibria may arise, which are driven by the natives' expectations on the welfare effects of immigration. In particular, pessimistic (optimistic) beliefs induce a country to impose higher (lower) barriers to immigration, which crowd out (crowd in) skilled migrants and thus confirm initial beliefs. This self-fulfilling mechanism sustains the endogenous formation of an anti or pro-immigration prejudice. We discuss how the adoption of a skill-selective policy affects this result.

It has become increasingly common to produce goods in a number of geographically dispersed stages linked by international trade. This tendency, known by names such as “production fragmentation”, “processing trade”, and “vertical specialization”, has important implications for the analysis of non-tariff measures (NTMs) and trade facilitation. First, different types of NTMs or trade facilitation issues are naturally associated with different stages in the movement of goods. Different price gaps can be assigned to these stages, making it possible to decompose the overall amount of distortion and to prioritize the policies with the largest potential efficiency gains. Second, NTMs may accumulate in long supply chains, implying that their trade-distorting effects are greater for goods produced in a fragmented manner than for goods with simple production processes. There is evidence that trade costs are more important for high technology goods or goods undergoing several stages of processing. Issues with product standards may be particularly important for goods with long supply chains. The link between NTMs and supply chains also has implications for economic development and for the relationship between liberalization in services and goods.

The WTO's Dispute Settlement Mechanism (DSM) has been hailed as a fundamental aspect of the Multilateral Trading System for developing countries. At the same time developing countries face many challenges to ensure their effective participation in the mechanism. This paper presents statistical evidence of how Latin-American countries have been very active in their use of the DSM, especially when their use of the mechanism is compared to their participation in world trade. This paper also analyses why, to a large extent, Latin American countries have overcome the challenges of participating in the DSM; and have done so by coming up with innovative and creative solutions, without deviating from the guidelines established by WTO rules.

Policy uncertainty can delay investment and reduce the response to policy change. I provide theoretical and novel quantitative evidence for these effects by focusing on trade policy, a ubiquitous but often overlooked source of uncertainty, when a firm's cost of export market entry is sunk. While an explicit purpose of the World Trade Organization (WTO) is to secure long term market access, little theoretical and empirical work analyzes the value of WTO institutions for reducing uncertainty for prospective exporters. Within a dynamic model of heterogeneous firms, I show that trade policy uncertainty will delay the entry of exporters into new markets and make them less responsive to applied tariff reductions. Policy instruments that reduce or eliminate uncertainty such as binding trade policy commitments at the WTO can increase entry even when applied protection is unchanged. I test the model using a disaggregated and detailed dataset of product level Australian imports in 2004 and 2006. I use the variation in tariffs and binding commitments across countries, products and time, to construct model-consistent measures of uncertainty. The estimates indicate that lower WTO commitments increase entry. Reducing trade policy uncertainty is at least as effective quantitatively as unilateral applied tariff reductions for Australia. These results illuminate and quantify an important new channel for trade creation in the world trade system.

Preferential trade agreements (PTAs) on services have proliferated since 2000. This working paper briefly presents the expansion of the dataset initially developed in Marchetti and Roy (2008). The data permits to assess the extent to which market access commitments undertaken by WTO Members in PTAs go beyond GATS commitments and offers made in the context of the Doha Development Agenda. The dataset, which covers PTA commitments of 53 WTO Members (counting EU Members States as one), is available at: http://www.wto.org/english/tratop_e/serv_e/dataset_e/dataset_e.htm

Since the conclusion of the Uruguay Round in 1994 and the creation of the WTO in 1995, the functioning of the multilateral trading system has been the focus of a considerable number of articles, proposals and debates. With the exception of a few important initiatives on transparency and decisionmaking, most contributions on the functioning of the WTO have been made by external observers of the WTO. However, over the past two years, an increasing number of Members have showed interest in systemic and institutional issues. This interest has to a large extent been generated by a concern about the role of the multilateral trading system in the overall international economic environment, particularly in light of the current global financial crisis. At the same time, the WTO as an institution is under considerable pressure following more than a decade of efforts to conclude the Doha Round of trade negotiations. This paper explores the possibility of establishing a Working Party on the Functioning of the WTO as a separate, deliberative process in the WTO. It seeks to outline the advantages of creating an informal forum or space for discussion among WTO Members and argues that many WTO Members appear to be ready for a broad discussion of institutional and systemic challenges facing the multilateral trading system.

This paper examines the history of regional integration in Africa, what has motivated it, the different initiatives that African governments have pursued, the nature of the integration process, and the current challenges. Regional integration is seen as a rational response to the difficulties faced by a continent with many small national markets and landlocked countries. As a result, African governments have concluded a very large number of regional integration arrangements, several of which have significant membership overlap. While characterized by ambitious targets, they have a dismally poor implementation record. Part of the problem may lie in the paradigm of linear market integration, marked by stepwise integration of goods, labour and capital markets, and eventually monetary and fiscal integration. This tends to focus on border measures such as the import tariff. However, supply-side constraints may be more important. A deeper integration agenda that includes services, investment, competition policy and other behind-the-border issues can address the national-level supply-side constraints far more effectively than an agenda which focuses almost exclusively on border measures.

This Working Paper contains some observations concerning the evolution of trade and trade-related policies in the Asia-Pacific region since the establishment in 1989 of the Trade Policy Review Mechanism (TPRM), whose goal is to improve the transparency of these policies. It also draws some lessons from the Reviews undertaken. In particular, the Paper examines how reforms, either unilateral or in connection with bilateral, regional or multilateral trade agreements, can be greatly facilitated by transparency, including cost-benefit (C-B) analyses of policies and measures that take full account not just of the interests of domestic producers, but also those of other groups, including exporters and domestic consumers. While high quality transparency is not cheap, the costs of achieving it pale in comparison with the financial assistance involved and efficiency losses associated with such assistance. Trade Policy Reviews (TPRs) throw light not only on measures that appear to contravene WTO rules, although that is not their purpose; more importantly, they identify measures not seemingly covered by WTO rules, which can, nonetheless, have economic effects equivalent to measures that are subject to these rules. One of the main lessons from these TPRs is that impediments to economic development are largely homegrown. Consequently, unilateral structural reform, of which liberalization of both trade and foreign direct investment (FDI) has been an integral part, is of paramount importance. By fostering transparency, particularly evaluating the effectiveness of policies and measures in achieving their objectives and their overall impacts (intended or unintended) on the economy, the TPRM can be a catalyst for unilateral reform, including liberalization of trade and FDI. Although the latter has received added impetus from multilateral liberalization under the auspices of the GATT/WTO, the stalling of negotiations in connection with the Doha Development Agenda (DDA) should not preclude further unilateral liberalization. By contrast, the benefits of preferential trade agreements are far from obvious, notwithstanding their proliferation during the past decade throughout the Asia-Pacific region, here few governments have subjected these agreements to rigorous cost-benefit analysis. Economies in the Asia-Pacific region, especially East Asia, have been much more successful than those in other regions in achieving sustained fast growth, and thereby raising living standards and reducing poverty. This success can be attributed not so much to transparency, which is largely lacking, but to, inter alia, their broad outward-looking development strategy. This strategy has involved in particular an increasingly high degree of integration into the global economy with heavy reliance on growth of manufactured exports, high rates of national saving to finance high rates of domestic investment, including public investment in physical and social infrastructure (notably education and health), supplemented by FDI (as well as maintenance of macroeconomic stability, reliance on a functioning market system to allocate resources, and committed, capable and credible governments). However, this development strategy has left growth very heavily dependent on domestic investment and exports, which dropped sharply in the wake of the global financial crisis that erupted in 2008. This, and resulting current account imbalances, and consequent trade tension, has prompted a rethink in a number of East Asian economies of their development strategies. As a consequence, China, Chinese Taipei, Korea and Malaysia, for example, are now attempting to wean their economies off investment and exports and give freer rein to domestic consumption. As circumstances (including comparative advantage) change, and global resources become increasingly scarce, policies need to be continually reviewed in order to ensure that second-best measures are replaced by more cost-effectiveness ones. As improved productivity is the key to sustained development in the long run, policies need to be adapted to ensure that they facilitate, rather than inhibit, the efficient re-allocation of resources by markets in accordance with evolving comparative advantage. Reform needs to be ongoing, therefore. Transparency builds support for, and thus paves the way for, such reform.

Since 1990 the number of preferential trade agreements (PTAs) has increased very rapidly. This paper aims to contribute to this literature by presenting a new database on PTAs called Design of Trade Agreements (DESTA). We identified a total of 690 negotiated trade agreements between 1945 and 2009 of which we have coded 404 agreements for which treaty texts and appendices were available. We aim to have a database for about 550 agreements by 2012. We have coded agreements for a total of 10 broad sectors of cooperation, encompassing market access, services, investments, intellectual property rights, competition, public procurement, standards, trade remedies, non-trade issues, and dispute settlement. For each of these sectors, we have coded a significant number of items, meaning that we have about 100 data points for each agreement. The resulting DESTA database is – to the best of our knowledge – by far the most complete in terms of agreements and sectors covered. This dataset fills a crucial gap in the field by providing a fine-grain measurement of the design of PTAs. Among others, we think that DESTA will be of relevance for the literatures on the signing of PTAs; the legalization of international relations; the rational design of international institutions; the diffusion of policies; the political and economic effects of trade agreements; power relations between states; and forum shopping in international politics. This working paper describes the DESTA data set and provides selected descriptive statistics. The overview puts emphasis on variation in design over time and across regions.

This paper weaves several sets of facts into an argument that: 1) today’s trade is radically more complex, involving a “trade-investment-service nexus”, 2) this 21st century trade demanded deeper disciplines which were supplied by “21st century regionalism” while the WTO was otherwise occupied, and 3) 21st century regionalism has quite different implications for the world trading system than the traditional thinking suggests. The paper also argues that the traditional thinking (building-stumbling-block and Vinerian economics) is not up to the job of analysing 21st century regionalism. An alternative framework is not provided, but elements a new approach should encompass are discussed.

When looking at the conditions of trade in natural resources the world appears upside down: tariff protection in natural resources sectors is generally lower than for overall merchandise trade, while export restrictions are twice as likely as in other sectors. On the other hand, tariff escalation is significant in natural resources sectors, where materials in their raw state face, on average, lower duties than in their processed form. In this paper, we discuss how export taxes and tariff escalation may be the result of an uncooperative trade policy. Specifically, tariff escalation and export taxes can be "beggar-thy-neighbor" policies because governments may be tempted to use them to alter the relative price of exports to their advantage (terms-of-trade effect) or to expand the domestic processing industry at the expenses of foreign production (production relocation effect). In equilibrium, these policies offset each other in a Prisoners' Dilemma situation, where trade is inefficiently low.

The creation of the General Agreement on Trade in Services (GATS), in the Uruguay Round, and its entry into force in 1995 marked a new stage in the history of the multilateral system. It was motivated essentially by the rapid expansion of international services trade within an increasingly open environment in many countries. Given the peculiarities of services trade, including the intangible nature of the products concerned and the need for direct contact between supplier and user in many cases, the Agreement contains a variety of conceptual innovations, including its extension to modes of supply beyond conventional cross-border trade (consumption abroad, commercial presence, and presence of natural persons) and its coverage, and legitimization, of various types of non-tariff restrictions. In turn, the new concepts needed time to be absorbed by the ministries and agencies involved in services trade. Further, the positive-list, or bottom-up, approach to scheduling trade commitments under the GATS meant that great flexibility was given to Members in selecting the sectors concerned and specifying the levels of access provided under individual modes. Thus, not surprisingly, the schedules that emerged from the Uruguay Round, which still account for the majority of current commitments, contain a variety of unclear or superfluous entries that may cause interpretation problems. Their solution could contribute significantly to the clarity and comparability of access obligations across sectors and WTO Members. The scheduling conventions agreed for the Doha Round thus provide specifically for the possibility of technical refinements that leave the substance of commitments unchanged. However, not only was this possibility used more sparingly to date than might have been expected, but additional flaws would be introduced if some current offers were to enter into effect. The following discussion, with a focus on a particular group of entries (market access via commercial presence), tries to explain the scope for such refinements and develop a clearer picture of the areas where further action might be needed.

We propose a theoretical framework for analyzing the problems associated to unilateral immigration policy in receiving countries and for evaluating the grounds for reform of international institutions governing immigration. We build a model with multiple destination countries and show that immigration policy in one country is influenced by measures adopted abroad as migrants choose where to locate (in part) in response to differences in immigration policy. This interdependence gives rise to a leakage effect of immigration policy, an international externality well documented in the empirical literature. In this environment, immigration policy becomes strategic and unilateral behavior may lead to coordination failures, where receiving countries are stuck in welfare inferior equilibria. We then study the conditions under which a coordination failure is more likely to emerge and argue that multilateral institutions that help receiving countries make immigration policy commitments would address this inefficiency.

The Trade Policy Reviews conducted in the Western Hemisphere over 1989-2009 contain a wealth of information that puts in clear evidence the considerable improvements achieved in most American countries during the first two decades of operation of the Trade Policy Review Mechanism. Those Reviews show that trade liberalization came hand-in-hand with internal reforms, and was generally of an autonomous nature and an intrinsic component of improved economic management. Trade liberalization slowed down during the second decade under review, with tariffs having come down mostly during the earlier years. The use of non-tariff barriers also fell over time although at a slow pace in some of the smallest Members, which found it difficult to implement the more complex trade policy instrument applied by larger countries. Export and other government assistance schemes proliferated throughout the continent but were often characterized by a lack of unity in the criteria used to assign and apply them. The review period also witnessed enormous changes in the services sectors, where reforms usually proved more complex than in the goods area. The multilateral and other international trade agreements contributed to the stability of trade policies and the general rejection of protectionism, although backtracking did occur in a number of cases. Because the commitments made during the Uruguay Round negotiation now fall short of the more liberal trade regimes that came to be over the review period, most Members in the Americas could presently raise trade and investment barriers without violating multilateral rules. Thus, the pressing need to conclude the Doha Development Agenda in order to lock in the considerable trade policy liberalization achieved during past years, and to strengthen the multilateral trading system.

The previous literature provides a highly ambiguous picture on the impact of trade and investment agreements on FDI. Most empirical studies ignore the actual content of BITs and RTAs, treating them as "black boxes", despite the diversity of investment provisions constituting the essence of these agreements. We overcome this serious limitation by analyzing the impact of modalities on the admission of FDI and dispute settlement mechanisms in both RTAs and BITs on bilateral FDI flows between 1978 and 2004. We find that FDI reacts positively to RTAs only if they offer liberal admission rules. Dispute settlement provisions play a minor role. While RTAs without strong investment provisions may even discourage FDI, the reactions to BITs are less discriminate with foreign investors responding favourably to the mere existence of BITs.