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GAME‐THEORETIC ANALYSIS OF CHINA's WTO ACCESSION
Author(s) -
Bond Eric W.,
Ching Stephen,
Lai Edwin L.C.
Publication year - 2003
Publication title -
pacific economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.34
H-Index - 33
eISSN - 1468-0106
pISSN - 1361-374X
DOI - 10.1111/j.1468-0106.2003.00214.x
Subject(s) - accession , negotiation , tariff , china , outcome (game theory) , economics , international economics , international trade , microeconomics , political science , law , european union
. This paper studies the determination of split of total surplus among the negotiating parties (member countries and the acceding country) in a WTO accession negotiation using a sequential bargaining model. In particular, we are interested in the effect of the most‐favored‐nation (MFN) principle on the negotiation outcome. The MFN principle says that any tariff reduction offered by the applicant for accession has to be automatically granted to all existing members. The model suggests that it is quite plausible that China's share of surplus is more when MFN is in place.