An Economic Theory of the GATT: A Generalization

Paul Wonnacott and Ronald Wonnacott
Additional contact information
Paul Wonnacott: Middlebury College, http://www.middlebury.edu/academics/econ
Authors registered in the RePEc Author Service: Diego Restuccia

No 9901, University of Western Ontario, Departmental Research Report Series from University of Western Ontario, Department of Economics

Abstract: Bagwell and Staiger (1999) conclude that the reason for governments to enter trade negotiation is the terms-of-trade externality, which creates an inefficiency in unilateral trade policies. To address this conclusion, the authors consider that protection may be motivated by many other objectives than just unilateral attempts at terns-of-trade improvements, including the desire to: (1) increase incomes (or prevent trade-driven losses) in import- competing countries; (2) increase employment; (3) improve the balance of trade. It may or may not be sensible for countries to increase tariffs for any of these reasons, but they do. In each case, trade agreements may be appealing to governments as a way to prevent an inefficiency that arises from unilateral trade policies. The justification for the GATT is that it restrains unilateral protection, regardless of its political or economic motivation. Moreover, this conclusion holds even if each country has a different motive for protection.

Date: 1999
New Economics Papers: this item is included in nep-cdm, nep-dge and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://ir.lib.uwo.ca/cgi/viewcontent.cgi?article=1369&context=economicsresrpt (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden

Related works:
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:uwo:uwowop:9901

Ordering information: This working paper can be ordered from
https://economics.uw ... itting_ordering.html
The price is Paper copy available by mail at a cost of $10.00 Canadian each.

Access Statistics for this paper

More papers in University of Western Ontario, Departmental Research Report Series from University of Western Ontario, Department of Economics Department of Economics, Social Science Centre, University of Western Ontario, London, Ontario, Canada N6A 5C2.
Bibliographic data for series maintained by ().