Two Alternative Sequences of WTO Negotiations: Implications for Welfare

Abstract

We develop a partial equilibrium, sequential model of trade negotiation between an OECD country and two developing countries. First, we show that there are substantive qualitative and quantitative differences in the state of market access and domestic support that emerge under possible alternative sequences in which the negotiating game can be played. We then explore the welfare implications of such alternative sequences on the various stakeholders within the OECD. The welfare outcomes point to various lobbying activities which can influence the trade negotiator and contribute to the confusion and disagreement on who should commit to its policies first.