National Treatment in the GATT
The National Treatment clause (NT) is the first-line defence 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.
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- Bagwell,K. & Staiger,R.W., 1998.
"An economic theory of GATT,"
15, Wisconsin Madison - Social Systems.
- Horn, Henrik, 2006.
"National Treatment in the GATT,"
CEPR Discussion Papers
5450, C.E.P.R. Discussion Papers.
- Kyle Bagwell & Robert W. Staiger, 2001.
"Domestic Policies, National Sovereignty, and International Economic Institutions,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 116(2), pages 519-562.
- Kyle Bagwell & Robert W. Staiger, 1999. "Domestic Policies, National Sovereignty and International Economic Institutions," NBER Working Papers 7293, National Bureau of Economic Research, Inc.
- Brian R. Copeland, 1990. "Strategic Interaction among Nations: Negotiable and Non-negotiable Trade Barriers," Canadian Journal of Economics, Canadian Economics Association, vol. 23(1), pages 84-108, February.
- Pierpaolo Battigalli & Giovanni Maggi, 2003.
"International agreements on product standards: an incomplete-contracting theory,"
229, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Pierpaolo Battigalli & Giovanni Maggi, 2003. "International agreements on product standard: an incomplete contracting theory," NBER Working Papers 9533, National Bureau of Economic Research, Inc.
- Josh Ederington, 2001. "International Coordination of Trade and Domestic Policies," American Economic Review, American Economic Association, vol. 91(5), pages 1580-1593, December.
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