The Economics of the World Trading System

Preface xi Introduction 1(12) The Theory of Trade Agreements 13(30) The Purpose of Trade Agreements 13(23) The General Equilibrium Model 14(1) The Traditional Economic Approach 15(3) The Political-Economy Approach 18(14) The Commitment Approach 32(3) Comparison of Approaches 35(1) Rules versus Power 36(3) Enforcement 39(4) The History and Design of GATT and the WTO 43(14) The Origin of GATT and the WTO 43(5) The Rules of GATT 48(6) Substantive Obligations 48(1) Exceptions 49(2) Dispute Settlement Procedures 51(3) Reciprocity, Nondiscrimination, and Enforcement under GATT 54(3) Reciprocity 57(14) Reciprocity in GATT 57(2) Reciprocity and Trade Negotiations 59(5) Reciprocity and Renegotiation 64(4) Reciprocity and Participation: Rules versus Power 68(3) MFN 71(24) MFN in GATT 71(2) The Multicountry Model 73(6) The General Equilibrium Model 73(4) Government Preferences 77(2) MFN, Reciprocity, and Trade Negotiations 79(10) Significance 80(1) MFN and Reciprocity 81(3) Nonviolation Nullification-or-Impairment Complaints 84(2) The Free-Rider Problem 86(3) MFN, Reciprocity and Renegotiation 89(3) MFN and the Terms-of-Trade Theory: A Summary 92(2) MFN and Political Externalities 94(1) Enforcement 95(16) GATT Enforcement and the Theory of Repeated Games 95(8) Predictions 103(5) Rebalancing the Agreement: The GATT Escape Clause 104(2) Gradualism: Rounds of Trade Liberalization 106(2) The Exchange and Aggregation of Enforcement Power 108(3) Preferential Trading Agreements 111(14) Preferential Trading Agreements in GATT 111(1) Preferential Trading Agreements and Reciprocity 112(3) PTAs and Trade Negotiations 113(1) PTAs and Renegotiation 114(1) Preferential Trading Agreements and Multilateral Enforcement 115(6) Other Approaches 121(4) Labor and Environmental Standards 125(22) Labor and Environmental Standards in GATT 125(6) The Model with Domestic Standards 131(2) The General Equilibrium Model 131(2) Government Preferences 133(1) The Purpose of a Trade Agreement 133(4) Efficient Policies 134(1) Noncooperative Policies 135(1) Identifying the Inefficiency 136(1) Trade Agreements and National Sovereignty 137(5) Enforcement of Labor and Environmental Standards 142(5) Competition Policy 147(16) Competition Policy in GATT 148(4) The Model with Competition Policy 152(6) The General Equilibrium Model 152(3) Government Preferences 155(3) The Purpose of a Trade Agreement 158(2) Trade Agreements and National Sovereignty 160(3) Agricultural Export Subsidies 163(18) Agricultural Export Subsidies in GATT 163(2) Features of the Agricultural Disputes 165(2) Theoretical Approaches 167(2) The Model of Agricultural Export Subsidies 169(3) The Partial Equilibrium Model 169(2) Government Preferences 171(1) The Purpose of Subsidy Agreements 172(7) Nash Subsidies 172(2) Cooperative Subsidies 174(1) Efficient Subsidies 174(2) Illustration 176(1) Interpretation 177(2) The Treatment of Export Subsidies 179(2) The Practical Relevance of Terms-of-Trade Considerations 181(6) Conclusion 187(4) Appendixes 191(16) A Appendix to Chapter 2 191(4) B Appendix to Chapter 5 195(12) B.1 The General Equilibrium Model: Further Details 195(1) B.2 The Efficiency Frontier: Characterizations 195(5) B.3 Many Goods 200(7) References 207(10) Index 217