Working Paper: NBER ID: w22087
Authors: Kyle Bagwell; Robert W. Staiger
Abstract: What does economics have to say about the design of international trade agreements? We review a literature on this question, providing detailed coverage on three key design features of the GATT/WTO: reciprocity, nondiscrimination as embodied in the MFN principle, and tariff bindings and binding "overhang." Each of these features is central to the design of the GATT/WTO, and we argue that an economic perspective can go a long way toward revealing a consistent logic to the inclusion of these design features in trade agreements.
Keywords: No keywords provided
JEL Codes: F02; F13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| design of international trade agreements (F13) | inefficiencies in trade relations (F14) |
| trade agreement design features (F13) | mutual gains among member governments (F55) |
| Nash equilibrium inefficiencies (C72) | necessity for trade agreements (F13) |
| term-of-trade externalities (F14) | motivation for governments to enter agreements (F53) |
| absence of agreements (Y70) | suboptimal tariff settings (F13) |
| trade agreements (F13) | mitigate inefficiencies (D61) |
| reciprocal reductions (C71) | Pareto improvements (D61) |