Why the WTO? An introduction to the economics of trade agreements

Gene M. Grossman, Henrik Horn

Research output: Chapter in Book/Report/Conference proceedingChapter

7 Scopus citations


Introduction This study is part of The American Law Institute (ALI) project Legal and Economic Principles of World Trade Law. The project aims to analyze the central instrument in the World Trade Organization (WTO) Agreement for the regulation of trade in goods – The General Agreement on Tariffs and Trade (GATT). The present study is one of two background studies for this project. The first study, The Genesis of the GATT, appraises the rationale for the creation of the GATT, and tracks its development from a historical and legal perspective. This second study provides an overview of the economics of trade agreements. A distinguishing feature of this ALI project is the desire to base the analysis of the GATT firmly in both economics and law. The necessity of legal analysis needs no justification. But why also base the study in economics? Art. 31.1 of the Vienna Convention of the Laws of Treaties states that an international agreement should be interpreted “in the light of its object and purpose.” There are fundamental reasons why the interpretation of the GATT therefore cannot be adequately addressed without economic analysis.

Original languageEnglish (US)
Title of host publicationLegal and Economic Principles of World Trade Law
Subtitle of host publicationEconomics of Trade Agreements, Border Instruments, and National Treasures
PublisherCambridge University Press
Number of pages59
ISBN (Electronic)9781139839105
ISBN (Print)9781107038615
StatePublished - Jan 1 2011

All Science Journal Classification (ASJC) codes

  • General Social Sciences


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