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Geopolitics and Shallow Integration

Author

Listed:
  • Aaditya Mattoo
  • Michele Ruta
  • Robert W. Staiger

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.

Suggested Citation

  • Aaditya Mattoo & Michele Ruta & Robert W. Staiger, 2026. "Geopolitics and Shallow Integration," AEA Papers and Proceedings, American Economic Association, vol. 116, pages 119-126, May.
    • Handle: RePEc:aea:apandp:v:116:y:2026:p:119-126
    DOI: 10.1257/pandp.20261014
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    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F52 - International Economics - - International Relations, National Security, and International Political Economy - - - National Security; Economic Nationalism
    • K33 - Law and Economics - - Other Substantive Areas of Law - - - International Law

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