National Treatment in the GATT

Henrik Horn

No 657, Working Paper Series from Research Institute of Industrial Economics

Abstract: The National Treatment clause (NT) is the first-line defense in the GATT (and in most other trade agreements) against opportunistic exploitation of the inevitable incompleteness of the agreement. This paper examines the role of NT as it applies to internal taxation under the GATT. It is shown that despite severely restricting the freedom to set internal taxes, NT may improve government welfare. But it will not completely solve the incomplete contract problem it is meant to remedy. Furthermore, it requires a high degree of economic sophistication on behalf of trade negotiators in order for this beneficial effect to materialize.

Keywords: National Treatment; GATT; WTO; Trade Agreements (search for similar items in EconPapers)
JEL-codes: F13 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2006-01-27
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (36)

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Journal Article: National Treatment in the GATT (2006)
Working Paper: National Treatment in the GATT (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:0657

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