Geopolitics and Shallow Integration

Aaditya Mattoo, Michele Ruta and Robert W. Staiger

AEA Papers and Proceedings, 2026, vol. 116, 119-126

Abstract: The GATT/WTO system rests on reciprocity, nondiscrimination (MFN), and shallow integration—focusing on border measures while allowing domestic policy flexibility. Previous literature established the economic logic of these principles absent geopolitics. Mattoo, Ruta, and Staiger (2024) found that reciprocity and MFN may need relaxation under geopolitical rivalry. This paper extends that analysis to shallow integration by incorporating domestic standards alongside tariffs. We demonstrate formally that shallow integration's logic persists under geopolitical rivalry, suggesting the GATT/WTO approach—negotiating tariff bindings for market access while retaining domestic policy flexibility—remains viable for efficient trade cooperation even amid great power competition.

JEL-codes: D72 F12 F13 F14 F15 F52 K33 (search for similar items in EconPapers)
Date: 2026
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DOI: 10.1257/pandp.20261014

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