Discussion Paper Series Multilateral Trade Negotiations, Bilateral Opportunism and

Trade negotiations occur through time and between the governments of many countries. An important issue is thus whether the value of concessions that a government wins in a current negotiation may be eroded in a future bilateral negotiation to which it is not party. We identify rules of negotiation that serve to protect the welfare of governments that are not participating in the bilateral negotiation. Our main …nding is that the two central principles of GATT/WTO- non-discrimination (MFN) and reciprocity- preserve the welfare of non-participating governments and therefore o¤er a “…rst-line of defense ” against bilateral opportunism. We argue that the GATT/WTO nulli…cation-or-impairment rule then constitutes an important “second-line of defense. ” Finally, we con…rm that in the absence of rules, or under weaker rules (e.g., MFN alone), the potential for bilateral opportunism can be severe