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How Important Can the Non-violation Clause Be for the GATT/WTO?

Robert Staiger () and Alan O. Sykes

American Economic Journal: Microeconomics, 2017, vol. 9, issue 2, 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.

JEL-codes: D74 D86 F12 F13 K33 (search for similar items in EconPapers)
Date: 2017
Note: DOI: 10.1257/mic.20150139
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Working Paper: How Important can the Non-Violation Clause be for the GATT/WTO? (2013) Downloads
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