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Gatt, Dispute Settlement And Cooperation

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  • DAN KOVENOCK
  • MARIE THURSBY

Abstract

This paper analyzes GATT and its dispute settlement procedure (DSP) in the context of a supergame model of international trade featuring both explicit and implicit agreements. An explicit agreement, such as GATT, may be violated at some positive cost in addition to retaliatory actions that might be induced by the violation. We interpret this cost as arising from "international obligation", a phenomenon frequently mentioned in the legal literature on GATT. We focus on how international obligation affects two aspects of GATT-DSP: unilateral retaliation and the effect of inordinate delays in the operation of DSP. Copyright 1992 Blackwell Publishers Ltd..

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Economics & Politics.

Volume (Year): 4 (1992)
Issue (Month): 2 (07)
Pages: 151-170

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Handle: RePEc:bla:ecopol:v:4:y:1992:i:2:p:151-170

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References

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  1. Riezman, Raymond, 1991. "Dynamic tariffs with asymmetric information," Journal of International Economics, Elsevier, vol. 30(3-4), pages 267-283, May.
  2. Green, Edward J. & Porter, Robert H., 1982. "Noncooperative Collusion Under Imperfect Price Information," Working Papers 367, California Institute of Technology, Division of the Humanities and Social Sciences.
  3. Feenstra, Robert C & Lewis, Tracy R, 1991. "Negotiated Trade Restrictions with Private Political Pressure," The Quarterly Journal of Economics, MIT Press, vol. 106(4), pages 1287-307, November.
  4. Crawford, Vincent P, 1982. "A Theory of Disagreement in Bargaining," Econometrica, Econometric Society, vol. 50(3), pages 607-37, May.
  5. Ludema, Rodney D., 2001. "Optimal international trade agreements and dispute settlement procedures," European Journal of Political Economy, Elsevier, vol. 17(2), pages 355-376, June.
  6. Bagwell, Kyle & Staiger, Robert W, 1990. "A Theory of Managed Trade," American Economic Review, American Economic Association, vol. 80(4), pages 779-95, September.
  7. Dilip Abreu & Paul Milgrom & David Pearce, 1997. "Information and timing in repeated partnerships," Levine's Working Paper Archive 636, David K. Levine.
  8. Hungerford, T.L., 1990. "Gatt: A Cooperative Equilibrium In A Noncooperative Trading Regime?," Working Papers 262, Research Seminar in International Economics, University of Michigan.
  9. Segerstrom, Paul S., 1988. "Demons and repentance," Journal of Economic Theory, Elsevier, vol. 45(1), pages 32-52, June.
  10. Baldwin, Robert E. & Clarke, Richard N., 1987. "Game-modeling multilateral trade negotiations," Journal of Policy Modeling, Elsevier, vol. 9(2), pages 257-284.
  11. Mayer, Wolfgang, 1981. "Theoretical Considerations on Negotiated Tariff Adjustments," Oxford Economic Papers, Oxford University Press, vol. 33(1), pages 135-53, March.
  12. Chan, Kenneth S., 1988. "Trade negotiations in a Nash bargaining model," Journal of International Economics, Elsevier, vol. 25(3-4), pages 353-363, November.
  13. Brown, Fred & Whalley, John, 1980. "General Equilibrium Evaluations of Tariff-Cutting Proposals in the Tokyo Round and Comparisons with More Extensive Liberalisation of World Trade," Economic Journal, Royal Economic Society, vol. 90(363), pages 838-66, December.
  14. repec:fth:michin:262 is not listed on IDEAS
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Citations

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Cited by:
  1. Richard Chisik, 2010. "Trade Disputes, Quality Choice, and Economic Integration," Working Papers 022, Ryerson University, Department of Economics.
  2. Wilckens, Sebastian, 2007. "Should WTO dispute settlement be subsidized?," Center for European, Governance and Economic Development Research Discussion Papers 62, University of Goettingen, Department of Economics.
  3. Taiji Furusawa, 2009. "WTO as Moral Support," Review of International Economics, Wiley Blackwell, vol. 17(SI), pages 327-337, 05.
  4. Ludema, R.D., 1990. "Optimal International Trade Agreements And Dispute Settlement Procedures," UWO Department of Economics Working Papers 9101, University of Western Ontario, Department of Economics.
  5. Carsten Herrmann-Pillath, 2006. "Reciprocity and the hidden constitution of world trade," Constitutional Political Economy, Springer, vol. 17(3), pages 133-163, September.
  6. Furusawa, Taiji, 1999. "The negotiation of sustainable tariffs," Journal of International Economics, Elsevier, vol. 48(2), pages 321-345, August.
  7. Aradhna Aggarwal, 2008. "Anti-dumping Protection: Who Gets It? An Exploratory Analysis of Anti-dumping Use in the Most Active User Countries," Working Papers id:1374, eSocialSciences.
  8. Pierpaolo Battigalli & Giovanni Maggi, 2003. "International agreements on product standards: an incomplete-contracting theory," Working Papers 229, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  9. Kim, Young-Han, 2004. "The optimal trade bargaining strategies in the negotiation of DDA," Journal of Policy Modeling, Elsevier, vol. 26(1), pages 65-80, January.
  10. Klimenko, Mikhail & Ramey, Garey & Watson, Joel, 2008. "Recurrent trade agreements and the value of external enforcement," Journal of International Economics, Elsevier, vol. 74(2), pages 475-499, March.
  11. Kyle Bagwell & Robert W. Staiger, 2000. "GATT-Think," NBER Working Papers 8005, National Bureau of Economic Research, Inc.
  12. Thierry Verdier, 1998. "Results-oriented versus rules-oriented trade policies:: A theoretical survey," European Economic Review, Elsevier, vol. 42(3-5), pages 733-744, May.
  13. Bown, Chad P., 2004. "Trade disputes and the implementation of protection under the GATT: an empirical assessment," Journal of International Economics, Elsevier, vol. 62(2), pages 263-294, March.
  14. Heinz Hauser & Alexander Roitinger, 2002. "A Renegotiation Perspective on Transatlantic Trade Disputes," University of St. Gallen Department of Economics working paper series 2002 2002-09, Department of Economics, University of St. Gallen.
  15. Carsten Kowalczyk & Raymond Riezman, 2009. "Trade Agreements," CESifo Working Paper Series 2660, CESifo Group Munich.
  16. Ethier, Wilfred J., 2001. "Theoretical problems in negotiating trade liberalization," European Journal of Political Economy, Elsevier, vol. 17(2), pages 209-232, June.
  17. Wilckens, Sebastian, 2007. "Should WTO dispute settlement be subsidized?," Economics Working Papers 2007,02, Christian-Albrechts-University of Kiel, Department of Economics.

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