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Trade agreements with limited punishments

By Ben Lockwood and Ben Zissimos


This paper shows that free trade can never be achieved when punishment for deviation from a trade agreement is limited to ‘a withdrawal of equivalent concessions’. This is where retaliation is not allowed to entail higher tariffs than those set by the initial deviant, and is the most severe form of punishment allowed under WTO rules. If, in addition, deviations from agreements are also limited in some way, then efficient self-enforcing tariff reductions must be gradual

Topics: HF, JZ
Publisher: University of Warwick. Centre for the Study of Globalisation and Regionalisation
Year: 2002
OAI identifier: oai:wrap.warwick.ac.uk:2031

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