A Comparative Analysis of Bilateral and Multilateral Negotiation in the New Round Trade Negotiation

This paper examines the optimal trade negotiation strategies in the trade negotiation involving multi-parties such as Doha Development Agenda, which is characterized by asymmetric multiple negotiators with multi-trade issues. Due to the consensus rule, which is the formal decision making rule of WTO, bilateral bargaining formula is often taken simultaneously with the multilateral bargaining formula. We demonstrate that the large economy, which might pose a fundamental objection, prefers the sequential bilateral negotiation, while multilateral negotiation from the initial stage of bargaining is welfare dominant for small economies. World welfare is also improved with the adoption of multilateral negotiating regime from the initial stage of negotiation compared to bilateral negotiation.