The National Treatment clause (NT) is the first-line defence in the GATT (and in most other trade agreements) against …. Furthermore, it requires a high degree of economic sophistication on behalf of trade negotiators in order for this beneficial …

We propose a model of trade agreements in which contracting is costly, and as a consequence the optimal agreement may … be incomplete. In spite of its simplicity, the model yields rich predictions on the structure of the optimal trade … explicitly into account can help explain a number of key features of real trade agreements. …