MICHAEL FAKHRI, University of Toronto - Faculty of Law
Email: michael.fakhri@utoronto.ca

This paper explicates competing conceptions of the WTO by examining the relationship between the perceived legitimacy crisis of the WTO and the emergence of development onto the global trade agenda. The general argument is that the WTO legitimacy debate in trade law literature can be understood as a proxy for a development debate. By reconstruing the legitimacy debate as a development debate, this paper shows how implicit within legitimacy arguments are competing conceptions of the WTO’s function and purpose and that these conceptions are embedded within a broader development framework.

The unfortunate effect of the contestations and justifications of the WTO’s legitimacy has been the obscuring of normative assumptions underpinning conceptions of the WTO. One suspects that the more the discourse continues in this tug-of-war of legitimacy, the more entangled our understanding of the WTO will be. Gaining a better sense of what conceptions of the WTO are dominating legal thought allows for a more substantive and detailed debate as to what the function and purpose of the WTO should be.

FABIEN CANDAU, Université de Pau et des Pays de l'Adour
Email: fabien.candau@univ-pau.fr
MARC FLEURBAEY, Université Paris V Rene Descartes
Email: marc.fleurbaey@gmail.com

This paper constructs a model of endogenous location of entrepreneurs with preference heterogeneity between individuals. Two main results are found. First, agglomeration and partial dispersion can be simultaneously stable but preference heterogeneity reduces the possibility of multiple equilibria. Secondly, measuring individual welfare in terms of equivalent income we show that in the case of agglomeration, the worst-off workers would prefer a dispersed equilibrium.

KYLE BAGWELL, Stanford University - Department of Economics, National Bureau of Economic Research (NBER)
Email: kwb8@columbia.edu
ROBERT W. STAIGER, Stanford University, University of Wisconsin - Madison - Department of Economics, National Bureau of Economic Research (NBER)
Email: rstaiger@stanford.edu

We consider the purpose and design of the World Trade Organization (WTO) and its predecessor, GATT. We review recent developments in the relevant theoretical and empirical literature. And we describe the GATT/WTO architecture and briefly trace its historical antecedents. We suggest that the existing literature provides a useful framework for understanding and interpreting central features of the design and practice of the GATT/WTO, and we identify key unresolved issues.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

MARIO ARTURO RUIZ ESTRADA, University of Malaya - Faculty of Economics and Administration
Email: marioruiz@um.edu.my

This paper is interested to evaluate the trade creation and trade diversion effect under the application of multi-level analytical framework. The main idea is to present an alternative group of indicators such as the trade mass (Т), the intra-regional and extra-regional trade trend ratio (R1), the extra-regional and intra-regional trade trend ratio (R2) and the trade expansion coefficient (TEC). These indicators will study the trend and the possible trade creation and trade diversion effect of any country can experience from intra or extra regional level.

JON D. CARLSON, University of California, Merced
Email: jcarlson3@ucmerced.edu

I argue that international politics - and globalization in particular - must be understood by tracing their historical development. Many of the present phenomena of ‘globalization’ have their roots in the expansion of the European state system. Consequently, I undertake a structured, comparative case study analysis of four regions (the Northwest coast of America, the Asante Kingdom of West Africa, Abyssinia, and Japan) and examine how they were absorbed into the expanding European-centered state system. I trace the process of incorporation, and develop a refined model of incorporation, including the development of a ‘zone of ignorance’ beyond the ‘known’ world which serves as an enabling mechanism for actors promoting incorporating behavior (i.e., exploration, colonization, conquest). In addition to textual analysis, I also use historically contemporary maps to ‘operationalize’ the stages of systemic expansion. This allows cross-temporal comparison of event-contexts with regard to the incorporation process, without having to ‘anchor’ the time-frame across cases; one can focus on process rather than era. I argue that significant socio-cultural, political, and economic change occurs upon contact between civilizations, and that these early changes have been largely overlooked in current international relations literature. Quite simply, the rules of the game and the agenda for negotiations are solidified rather early, well before most scholars examine the processes associated with globalization.

This case study illustrates that information, myth and misinformation act as mechanisms for systemic expansion. First, this is facilitated precisely because there is a 'zone of ignorance' where possibilities exist for desires to be realized, independent of objective reality; if one thinks there are cities of gold, then that may be enough to undertake the wildest of ventures. Second, high-risk high-return behavior drives early contact. This early contact is often undertaken by actors far from the organizing influence of ‘states’, and allows otherwise ‘irrational’ action to proceed. Third, significant state-building occurs prior to incorporation. In fact, states or simulacra thereof often arise precisely because of the incentive-shift, or systemic disturbance, associated with initial contact. Fourth, relative systemic status is a continuously mediated process. Actors in external arenas being incorporated generally have more negotiating leverage early, which declines over time. Finally, traditional views of international systems need revision; a refined world-systems approach offers a more elegant and nuanced means of doing so. Societies, cultures, and civilizations have been clashing for centuries, and an historical context is crucial for understanding present dynamics within the international system. I introduce the notion of 'protoglobalization' as a means of accomplishing this.

AMARENDER A. REDDY, Administrative Staff College of India
Email: aareddy@asci.org.in

The WTO regime has thronged new opportunities as well as challenges to Indian agriculture. The paper reviews impact of WTO regime on Indian agriculture competitiveness in comparison to developed countries. As majority of Indian farmers are small and marginal there is greater scope in organizing farmer’s organizations to enhance scale and scope economies to farming systems. In this respect the paper critically analyse success stories of some of the farmers organizations, which can be role models for future farmers organizations in the new regime. The paper ends with policy suggestions to enhance farmer’s organizations strength in increasing competitiveness of Indian farmers based on the past experience.

HAROLD HOUBA, VU University Amsterdam - Department of Econometrics, Tinbergen Institute
Email: hhouba@feweb.vu.nl
HANS-PETER WEIKARD, Wageningen University and Research Center - School of Social Sciences
Email: hans-peter.weikard@wur.nl

We introduce the notion of a stone age equilibrium to study societies in which property rights are absent, bilateral exchange is either coercive or voluntary, and relative strength governs power relations in coercive exchange. We stress the importance of free disposal of goods which allows for excess holdings larger than consumption, thereby modelling the power to withhold goods from others. Under complete, transitive, continuous and strictly-convex preferences, stone age equilibria exist. The maximum of the lexicographic welfare function in which agents are ranked by descending strength always corresponds to a stone age equilibrium. Every stone age equilibrium is weakly Pareto efficient.

PHILIP I. LEVY, American Enterprise Institute
Email: philip.levy@aei.org

Bilateral free trade agreements have generally been analyzed as instances of preferential reciprocal tariff liberalization. Viewed through this lens, such agreements raise concerns both about new competition and about trade diversion. The United States-Peru Trade Promotion Agreement, an example of a serious North-South accord, demonstrates that new market access was not a principal Peruvian goal in the trade negotiations. Instead, the agreement was intended to encourage investment by locking in Peru’s economic reforms. This motivation has very different implications for the global trading system than a quest for preferential access.