Trade negotiations, domestic policies, and the Most Favored Nation clause

Gal Hochman

Canadian Journal of Economics, 2008, vol. 41, issue 3, pages 781-795

Abstract: This paper illustrates how restricting trade instruments to non-discrimination links trade agreements to non-trade agreements and, under certain conditions, helps governments further lower tariffs and/or domestic standards (policies). These conditions are: (i) governments' objective functions are sufficiently concave with respect to domestic standards (policies); (ii) domestic standards are sufficiently valued; and (iii) policies are strategic complements. These can then be used as a rationale for restricting safeguard measures to non-discrimination.

JEL-codes: F02 F13 F18 (search for similar items in EconPapers)
Date: 2008

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