Enforcement, Private Political Pressure, and the General Agreement on Tariffs and Trade/World Trade Organization Escape Clause
c) negotiated commitments can be implemented only if they are self-enforcing. We thus consider the design of self-enforcing trade agreements among governments that acquire private information over time. We provide equilibrium interpretations of General Agreement on Tariffs and Trade/World Trade Organization (GATT/WTO) negotiations regarding upper bounds on applied tariffs and GATT/WTO escape clauses. We also provide a novel interpretation of a feature of the WTO Safeguards Agreement, under which escape clause actions cannot be reimposed in an industry for a period equal to the duration of the most recent escape clause action. We find that a dynamic-use constraint of this kind can raise the expected welfare of negotiating governments.
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