Tariff retaliation versus financial compensation in the enforcement of international trade agreements

Nuno Limão and Kamal Saggi ()

Chapter 12 in Policy Externalities and International Trade Agreements, 2018, pp 337-349 from World Scientific Publishing Co. Pte. Ltd.

Abstract: We analyze whether financial compensation is preferable to the WTO’s current dispute settlement system that permits injured member countries to impose retaliatory tariffs. We show that, ex-post, monetary fines are more efficient than tariffs in terms of granting compensation to injured parties but fines suffer from an enforcement problem since they must be paid by the violating country. If fines must ultimately be supported by the threat of tariffs, they fail to yield a more cooperative outcome than the use of tariffs alone. Furthermore, the exchange of bonds between symmetric countries also does not improve enforcement relative to retaliatory tariffs.

Keywords: Trade; International Trade; WTO; World Trade Organization; Investment; Globalization; Externality; Policy; Cooperation (search for similar items in EconPapers)
JEL-codes: F13 (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.worldscientific.com/doi/pdf/10.1142/9789813147980_0012 (application/pdf)
https://www.worldscientific.com/doi/abs/10.1142/9789813147980_0012 (text/html)
Ebook Access is available upon purchase.

Related works:
Chapter: Tariff retaliation versus financial compensation in the enforcement of international trade agreements (2018)
Journal Article: Tariff retaliation versus financial compensation in the enforcement of international trade agreements (2008)
Working Paper: Tariff Retaliation versus Financial Compensation in the Enforcement of International Trade Agreements (2006)
Working Paper: Tariff retaliation versus financial compensation in the enforcement of international trade agreements (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wsi:wschap:9789813147980_0012

Ordering information: This item can be ordered from

Access Statistics for this chapter

More chapters in World Scientific Book Chapters from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().