Whither the WTO?

Ian Sheldon, Andersons Professor of International Trade at the Department of Agricultural, Environmental, and Development Economics at The Ohio State University, presented the Tweeten Seminar on February 4, 2014 in Room 105 of the Agricultural Administration Building (2120 Fyffe Road) as part of the AEDE Applied Economics Seminar Series. His presentation focused on his recent research: "Whither the WTO?"

Abstract: There is consensus in international economics that the General Agreement on Tariffs and Trade (GATT), the predecessor to the World Trade Organization (WTO), was successful in reducing tariffs among developed economies, based on the idea that it provides a solution to a terms-of-trade Prisoners' Dilemma. In this context, the lecture examines the validity of three key reasons put forward for why the WTO has been less successful in liberalizing trade. First, it has been argued developing countries face a "latecomer's problem" in the sense that developed countries have already significantly reduced manufacturing tariffs among themselves, and that meaningful reduction of farm subsidies is the only way to get developing countries to the bargaining table. Second, there has been much debate about whether WTO commitments on tariffs undermine members' sovereignty over domestic environmental regulation, and in particular whether policies such as "carbon tariffs" are even permissible under WTO law. Third, the increase in offshore production of inputs may have pushed countries to seek "deep integration" through preferential trade agreements (PTAs) as opposed to "shallow integration" through the WTO. The overall conclusion of the lecture is that the latter presents the greatest challenge to the future relevance of the WTO, especially in light of rapid growth in the number of PTAs.

The Tweeten Seminar is sponsored by funds from the Luther Tweeten Fund, which has been supported by Luther and Eloyce Tweeten since 1992. Luther Tweeten was a member of the AEDE faculty from 1988 to 2000. The Tweeten Seminar sponsors yearly a presentation at the AEDE Seminar Series focused on policy.