Tariff Retaliation versus Financial Compensation in the Enforcement of International Trade Agreements
The authors analyze whether financial compensation is preferable to the current system of dispute settlement in the World Trade Organization that permits member countries to impose retaliatory tariffs in response to trade violations committed by other members. They show that monetary fines are more...
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| Format: | Policy Research Working Paper |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2006/04/6683376/tariff-retaliation-versus-financial-compensation-enforcement-international-trade-agreements http://hdl.handle.net/10986/8734 |
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okr-10986-87342021-04-23T14:02:40Z Tariff Retaliation versus Financial Compensation in the Enforcement of International Trade Agreements Limão, Nuno Saggi, Kamal ANTITRUST ENFORCEMENT BALANCE OF CONCESSIONS BENCHMARK BILATERAL TRADE BILATERAL TRADE AGREEMENT BONDS CENTRAL AMERICAN COLLECTIVE ACTION CONCESSIONS CONSUMER CONSUMER SURPLUS DEMAND ELASTICITY DISCOUNTED VALUE DISPUTE SETTLEMENT DISPUTE SETTLEMENT PROCEDURES DISPUTE SETTLEMENT SYSTEM ENFORCEMENT MECHANISM ENFORCEMENT MECHANISMS EQUILIBRIUM ESCROW EXCESS DEMAND EXPORT EXPORT CARTELS EXPORT SUPPLY EXPORTERS EXPORTS EXTERNALITIES FOREIGN COUNTRY FORMAL ANALYSIS FREE RIDER FREE RIDER PROBLEM HOME COUNTRY IMPORT PRICES IMPORT TARIFF INCENTIVE CONSTRAINT INCENTIVE CONSTRAINTS INCOME INEFFICIENCY INTELLECTUAL PROPERTY INTERNATIONAL AGREEMENT INTERNATIONAL AGREEMENTS INTERNATIONAL LAW INTERNATIONAL SPILLOVERS INTERNATIONAL TRADE LEGAL SCHOLARS LESS DEVELOPED COUNTRIES LIABILITY LOW TARIFFS MARKET CLEARING MARKET SHARE MEMBER COUNTRIES OPPORTUNITY COST OPTIMAL TARIFF OPTIMAL TARIFFS POLITICAL ECONOMY PREFERENTIAL TRADE PREFERENTIAL TRADE AGREEMENTS PROOF OF PROPOSITION PROVISIONS PUBLIC GOOD RECIPROCITY REMEDIES RENEGOTIATION ROYALTIES TARIFF CONCESSION TARIFF CONCESSIONS TARIFF REDUCTION TARIFF REDUCTIONS TAX TAX REVENUE TERMS OF TRADE THIRD PARTIES THIRD PARTY TOTAL VALUE TRADE AGREEMENT TRADE AGREEMENTS TRADE BARRIERS TRADE CONCESSIONS TRADE DISPUTE TRADE DISPUTES TRADE EFFECT TRADE NEGOTIATIONS TRADE PARTNER TRADE POLICY TRADING PARTNER TRADING SYSTEM URUGUAY ROUND UTILITY FUNCTION WORLD PRICE WORLD PRICES WORLD TRADE WORLD TRADE ORGANIZATION WTO The authors analyze whether financial compensation is preferable to the current system of dispute settlement in the World Trade Organization that permits member countries to impose retaliatory tariffs in response to trade violations committed by other members. They show that monetary fines are more efficient than tariffs in terms of granting compensation to injured parties when there are violations in equilibrium. However, fines suffer from an enforcement problem since they must be paid by the violating country. If fines must ultimately be supported by the threat of retaliatory tariffs, they fail to yield a more cooperative outcome than the current system. The authors also consider the use of bonds as a means of settling disputes. If bonds can be posted with a third party, they do not have to be supported by retaliatory tariffs and can improve the negotiating position of countries that are too small to threaten tariff retaliation. 2012-06-21T21:38:25Z 2012-06-21T21:38:25Z 2006-04 http://documents.worldbank.org/curated/en/2006/04/6683376/tariff-retaliation-versus-financial-compensation-enforcement-international-trade-agreements http://hdl.handle.net/10986/8734 English Policy Research Working Paper; No. 3873 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
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World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ANTITRUST ENFORCEMENT BALANCE OF CONCESSIONS BENCHMARK BILATERAL TRADE BILATERAL TRADE AGREEMENT BONDS CENTRAL AMERICAN COLLECTIVE ACTION CONCESSIONS CONSUMER CONSUMER SURPLUS DEMAND ELASTICITY DISCOUNTED VALUE DISPUTE SETTLEMENT DISPUTE SETTLEMENT PROCEDURES DISPUTE SETTLEMENT SYSTEM ENFORCEMENT MECHANISM ENFORCEMENT MECHANISMS EQUILIBRIUM ESCROW EXCESS DEMAND EXPORT EXPORT CARTELS EXPORT SUPPLY EXPORTERS EXPORTS EXTERNALITIES FOREIGN COUNTRY FORMAL ANALYSIS FREE RIDER FREE RIDER PROBLEM HOME COUNTRY IMPORT PRICES IMPORT TARIFF INCENTIVE CONSTRAINT INCENTIVE CONSTRAINTS INCOME INEFFICIENCY INTELLECTUAL PROPERTY INTERNATIONAL AGREEMENT INTERNATIONAL AGREEMENTS INTERNATIONAL LAW INTERNATIONAL SPILLOVERS INTERNATIONAL TRADE LEGAL SCHOLARS LESS DEVELOPED COUNTRIES LIABILITY LOW TARIFFS MARKET CLEARING MARKET SHARE MEMBER COUNTRIES OPPORTUNITY COST OPTIMAL TARIFF OPTIMAL TARIFFS POLITICAL ECONOMY PREFERENTIAL TRADE PREFERENTIAL TRADE AGREEMENTS PROOF OF PROPOSITION PROVISIONS PUBLIC GOOD RECIPROCITY REMEDIES RENEGOTIATION ROYALTIES TARIFF CONCESSION TARIFF CONCESSIONS TARIFF REDUCTION TARIFF REDUCTIONS TAX TAX REVENUE TERMS OF TRADE THIRD PARTIES THIRD PARTY TOTAL VALUE TRADE AGREEMENT TRADE AGREEMENTS TRADE BARRIERS TRADE CONCESSIONS TRADE DISPUTE TRADE DISPUTES TRADE EFFECT TRADE NEGOTIATIONS TRADE PARTNER TRADE POLICY TRADING PARTNER TRADING SYSTEM URUGUAY ROUND UTILITY FUNCTION WORLD PRICE WORLD PRICES WORLD TRADE WORLD TRADE ORGANIZATION WTO |
| spellingShingle |
ANTITRUST ENFORCEMENT BALANCE OF CONCESSIONS BENCHMARK BILATERAL TRADE BILATERAL TRADE AGREEMENT BONDS CENTRAL AMERICAN COLLECTIVE ACTION CONCESSIONS CONSUMER CONSUMER SURPLUS DEMAND ELASTICITY DISCOUNTED VALUE DISPUTE SETTLEMENT DISPUTE SETTLEMENT PROCEDURES DISPUTE SETTLEMENT SYSTEM ENFORCEMENT MECHANISM ENFORCEMENT MECHANISMS EQUILIBRIUM ESCROW EXCESS DEMAND EXPORT EXPORT CARTELS EXPORT SUPPLY EXPORTERS EXPORTS EXTERNALITIES FOREIGN COUNTRY FORMAL ANALYSIS FREE RIDER FREE RIDER PROBLEM HOME COUNTRY IMPORT PRICES IMPORT TARIFF INCENTIVE CONSTRAINT INCENTIVE CONSTRAINTS INCOME INEFFICIENCY INTELLECTUAL PROPERTY INTERNATIONAL AGREEMENT INTERNATIONAL AGREEMENTS INTERNATIONAL LAW INTERNATIONAL SPILLOVERS INTERNATIONAL TRADE LEGAL SCHOLARS LESS DEVELOPED COUNTRIES LIABILITY LOW TARIFFS MARKET CLEARING MARKET SHARE MEMBER COUNTRIES OPPORTUNITY COST OPTIMAL TARIFF OPTIMAL TARIFFS POLITICAL ECONOMY PREFERENTIAL TRADE PREFERENTIAL TRADE AGREEMENTS PROOF OF PROPOSITION PROVISIONS PUBLIC GOOD RECIPROCITY REMEDIES RENEGOTIATION ROYALTIES TARIFF CONCESSION TARIFF CONCESSIONS TARIFF REDUCTION TARIFF REDUCTIONS TAX TAX REVENUE TERMS OF TRADE THIRD PARTIES THIRD PARTY TOTAL VALUE TRADE AGREEMENT TRADE AGREEMENTS TRADE BARRIERS TRADE CONCESSIONS TRADE DISPUTE TRADE DISPUTES TRADE EFFECT TRADE NEGOTIATIONS TRADE PARTNER TRADE POLICY TRADING PARTNER TRADING SYSTEM URUGUAY ROUND UTILITY FUNCTION WORLD PRICE WORLD PRICES WORLD TRADE WORLD TRADE ORGANIZATION WTO Limão, Nuno Saggi, Kamal Tariff Retaliation versus Financial Compensation in the Enforcement of International Trade Agreements |
| relation |
Policy Research Working Paper; No. 3873 |
| description |
The authors analyze whether financial compensation is preferable to the current system of dispute settlement in the World Trade Organization that permits member countries to impose retaliatory tariffs in response to trade violations committed by other members. They show that monetary fines are more efficient than tariffs in terms of granting compensation to injured parties when there are violations in equilibrium. However, fines suffer from an enforcement problem since they must be paid by the violating country. If fines must ultimately be supported by the threat of retaliatory tariffs, they fail to yield a more cooperative outcome than the current system. The authors also consider the use of bonds as a means of settling disputes. If bonds can be posted with a third party, they do not have to be supported by retaliatory tariffs and can improve the negotiating position of countries that are too small to threaten tariff retaliation. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Limão, Nuno Saggi, Kamal |
| author_facet |
Limão, Nuno Saggi, Kamal |
| author_sort |
Limão, Nuno |
| title |
Tariff Retaliation versus Financial Compensation in the Enforcement of International Trade Agreements |
| title_short |
Tariff Retaliation versus Financial Compensation in the Enforcement of International Trade Agreements |
| title_full |
Tariff Retaliation versus Financial Compensation in the Enforcement of International Trade Agreements |
| title_fullStr |
Tariff Retaliation versus Financial Compensation in the Enforcement of International Trade Agreements |
| title_full_unstemmed |
Tariff Retaliation versus Financial Compensation in the Enforcement of International Trade Agreements |
| title_sort |
tariff retaliation versus financial compensation in the enforcement of international trade agreements |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2006/04/6683376/tariff-retaliation-versus-financial-compensation-enforcement-international-trade-agreements http://hdl.handle.net/10986/8734 |
| _version_ |
1764405906743754752 |