Market Access Bargaining in the Uruguay Round : Rigid or Relaxed Reciprocity?

The Uruguay Round tariff negotiations did not achieve a country-by-country balancing of concessions given and concessions received. How governments bargained was determined less by their national interests than by the interests of their politically important industrial constituencies.How tightly are trade negotiators held to winning a dollar of concession for each dollar of concession granted? The outcome of the Uruguay Round tariff negotiations suggests that such constraints were not tight.None of the delegations interviewed by Finger, Reincke, and Castro had tried to calculate for themselves the extent of concessions received. And the surplus or deficit of concessions received (over concessions given) varied widely among countries.Measuring the percentage point dollar of concessions given and received (a percentage point dollar being a reduction of the tariff by one percentage point on $1 of imports, or by trading partners on exports), they found that the outcome of negotiations varied enormously from one country to another.For 13 of 27 countries, net concessions (positive or negative) were at least 75 percent of the size of concessions received.Negotiations were widely perceived to involve equal sacrifice for the common good, with all countries expected to cut tariffs on the same percentage of imports.Ability to pay was also a consideration: a smaller fraction of imports was liberalized for developing countries.The authors found a tendency toward equality (in percentage of imports affected) across participating countries' concessions, particularly when developing countries' unilateral liberalization was considered - including the part of it that was not bound at the Uruguay Round.Delegations emphasized how important it was for them to look after the interests of politically important sectors (including rice for Japan and the Republic of Korea and textiles for the United States and the European Union).This paper is a product of Trade, Development Research Group. Michael Finger may be contacted at jfinger@worldbank.org