AEA Papers and Proceedings
ISSN 2574-0768 (Print) | ISSN 2574-0776 (Online)
Geopolitics and Shallow Integration
AEA Papers and Proceedings
(pp. 119–126)
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.Citation
Mattoo, Aaditya, Michele Ruta, and Robert W. Staiger. 2026. "Geopolitics and Shallow Integration." AEA Papers and Proceedings 116: 119–126. DOI: 10.1257/pandp.20261014Additional Materials
JEL Classification
- D72 Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- F12 Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- F13 Trade Policy; International Trade Organizations
- F14 Empirical Studies of Trade
- F15 Economic Integration
- F52 National Security; Economic Nationalism
- K33 International Law