American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
How Important Can the Non-violation Clause Be for the GATT/WTO?
American Economic Journal: Microeconomics
vol. 9,
no. 2, May 2017
(pp. 149–87)
Abstract
The "non-violation" clause of GATT is Exhibit A for the proposition that international trade agreements are incomplete contracts. According to the terms-of-trade theory of trade agreements, it underpins the success of the GATT/WTO's "shallow integration" approach. Yet the observed role of the non-violation complaint is minimal. We develop a model of non-violation claims in trade agreements, demonstrate that it predicts a minimal on-equilibrium-path role for non-violation claims under reasonable parameter restrictions, and show that the non-violation clause may nevertheless play an important off-equilibrium-path role in the GATT/WTO.Citation
Staiger, Robert W., and Alan O. Sykes. 2017. "How Important Can the Non-violation Clause Be for the GATT/WTO?" American Economic Journal: Microeconomics, 9 (2): 149–87. DOI: 10.1257/mic.20150139Additional Materials
JEL Classification
- D74 Conflict; Conflict Resolution; Alliances; Revolutions
- D86 Economics of Contract: Theory
- F12 Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- F13 Trade Policy; International Trade Organizations
- K33 International Law
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