summary
Our paper attempts to examine the problems of international trade negotiations taking place within the WTO and the role that this organization can play in the search for fair competition and a balance of interests for all contracting parties. We will show that the non-cooperative game of international trade negotiations is a game of threats and concessions where each country tries to defend its interests even if it adopts aggressive strategies such as the threat of retaliation. Today, it is no longer tariff barriers that present the first major obstacle to trade, but rather non-tariff barriers that threaten to destroy international economic relations. Several unfair trade practices, such as export subsidies or dumping, contribute to distorting international trade. Examination of Nash's variable threat model (1953), where we developed the subsidy problem between the United States and the European Union, shows that the threat point is endogenously chosen to maximize the final payment, and that the tariff is the only instrument to obtain this point. We find that the only equilibrium that can exist is the Nash equilibrium, which is not a Pareto optimum. This optimum can only be obtained when there is cooperation between countries.
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