Enforcement, private political pressure, and the General Agreement on Tariffs and Trade/World Trade Organization escape clause

We consider the design and implementation of international trade agreements when ( a) negotiations occur in the presence of uncertainty about future political pressures, (b) governments possess private information about political pressures at the time that the agreement is actually implemented, and ( 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.