We argue that, in the presence of asymmetric countries, a trade agreement that conforms to GATT’s reciprocity rule …. Conversely, the (weaker) more trade dependent country cannot reach the free trade welfare level under reciprocity, although its … welfare improves relative to the trade war. Reciprocity is so unfavorable to the weaker country that it may be worse off under …

We examine in detail the circumstances under which reciprocity, as defined in Bagwell and Staiger (1999), leads to … fixed world prices. We show that a change of tariffs satisfying reciprocity does not necessarily imply constant world prices … reciprocity and constant world prices, these reforms do not follow from the reciprocity condition, but rather from the requirement …