Reciprocity and the hidden constitution of world t

Authors: Carsten HerrmannPillath

Publish Date: 2006/09/15

Volume: 17, Issue: 3, Pages: 133-163

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Abstract

In common descriptions of the world trading system MFN and national treatment embody the principle of nondiscrimination Reciprocity is mostly regarded as a remnant of mercantilist trade policy This paper argues that reciprocity is the more fundamental constitutional rule because it reflects the unanimity principle enabling countries to identify Paretoimproving changes of trade policy I reconstruct the implicit constitution of world trade by applying some methodology of positive constitutional economics A major result is that in the Uruguay round a fundamental constitutional change took place from general reciprocity to “status quo reciprocity” which entails the possibility of Paretodeteriorating institutional changes

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