Depth versus Rigidity in the Design of International Trade Agreements

Abstract

I examine the impact of depth and rigidity in international trade agreements. Increasing the depth of required cooperation lowers the likelihood of full compliance and the stability of a trade regime. In contrast, increasing the rigidity of an agreement raises the likelihood of full compliance and lowers stability. Both depth and rigidity can lower tariffs if a state does not defect from its treaty obligations. I argue that if we control for the benefits of trade liberalization, then observable treaties will have a negative relationship between depth and rigidity. Deep agreements will be flexible, while shallow agreements will be rigid.

Keywords: preferential trade agreement, compliance, stability, international law, international trade

JEL Classification: K33, F1