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The GATT and Gradualism

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  • Ben Zissimos
  • Ben Lockwood

Abstract

This paper shows how the institutional rules imposed on its signatories by the GATT created a strategic incentive for countries to liberalize gradually. Free trade can never be achieved if punishment for deviation from a trade agreement is limited to a 'withdrawal of equivalent concessions.' Trade liberalization must be gradual if, in addition, deviation from an agreement is limited. The paper shows how (sufficiently patient) countries may have an incentive to deviate in a limited way when operating under GATT dispute settlement procedures

Suggested Citation

  • Ben Zissimos & Ben Lockwood, 2004. "The GATT and Gradualism," Econometric Society 2004 North American Summer Meetings 607, Econometric Society.
    • Handle: RePEc:ecm:nasm04:607
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Giovanni Maggi & Andrés Rodríguez-Clare, 2007. "A Political-Economy Theory of Trade Agreements," American Economic Review, American Economic Association, vol. 97(4), pages 1374-1406, September.
    2. Richard E. Baldwin, 2011. "Multilateralising Regionalism: Spaghetti Bowls as Building Blocks on the Path to Global Free Trade," Chapters, in: Miroslav N. Jovanović (ed.), International Handbook on the Economics of Integration, Volume I, chapter 2, Edward Elgar Publishing.
    3. Richard Chisik & Harun Onder, 2017. "Does Limited Punishment Limit The Scope For Cross Retaliation?," Economic Inquiry, Western Economic Association International, vol. 55(3), pages 1213-1230, July.
    4. Carsten Kowalczyk & Raymond Riezman, 2013. "Trade Agreements," Palgrave Macmillan Books, in: Daniel Bernhofen & Rod Falvey & David Greenaway & Udo Kreickemeier (ed.), Palgrave Handbook of International Trade, chapter 13, pages 367-388, Palgrave Macmillan.
    5. Zissimos, Ben, 2007. "The GATT and gradualism," Journal of International Economics, Elsevier, vol. 71(2), pages 410-433, April.
    6. Sheldon, Ian M. & Chow, Daniel C.K. & McGuire, William, 2017. "Trade Liberalization and Institutional Constraints on Moves to Protectionism: Multilateralism vs. Regionalism," 2018 Allied Social Sciences Association (ASSA) Annual Meeting, January 5-7, 2018, Philadelphia, Pennsylvania 266305, Agricultural and Applied Economics Association.
    7. repec:ilo:ilowps:469183 is not listed on IDEAS
    8. Emanuel Ornelas, 2012. "Preferential Trade Agreements and the Labor Market," CEP Discussion Papers dp1117, Centre for Economic Performance, LSE.
    9. Costas Hadjiyiannis & Doruk İriş & Chrysostomos Tabakis, 2012. "Multilateral tariff cooperation under fairness and reciprocity," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 45(3), pages 925-941, August.
    10. Richard Baldwin, 2016. "The World Trade Organization and the Future of Multilateralism," Journal of Economic Perspectives, American Economic Association, vol. 30(1), pages 95-116, Winter.
    11. Steven A. Matthews, 2006. "Smooth Monotone Contribution Games," PIER Working Paper Archive 06-018, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    12. Kyle Bagwell & Robert W. Staiger, 2009. "The WTO: Theory and Practice," NBER Working Papers 15445, National Bureau of Economic Research, Inc.
    13. Richard E. Baldwin, 2006. "Multilateralising Regionalism: Spaghetti Bowls as Building Blocs on the Path to Global Free Trade," The World Economy, Wiley Blackwell, vol. 29(11), pages 1451-1518, November.
    14. Richard Chisik, 2010. "Limited Incremental Linking and Unlinked Trade Agreements," Working Papers 023, Ryerson University, Department of Economics.
    15. Hartigan, James C., 2018. "Punching out of one's weight class? Cross agreement retaliation in the WTO," International Review of Economics & Finance, Elsevier, vol. 54(C), pages 274-288.

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    More about this item

    Keywords

    Nash tariffs; Free Trade; Gradualism; Trade agreement;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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