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GATT, Dispute Settlement and Cooperation

  • Dan Kovenock
  • Marie Thursby

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 GAIT-DSP: unilateral retaliation and the effect of inordinate delays in the operation of DSP.

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File URL: http://www.nber.org/papers/w4071.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4071.

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Date of creation: May 1992
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Publication status: published as Economics and Politics Volume 4, #2, pp. 151-170 (July 1992).
Handle: RePEc:nbr:nberwo:4071
Note: ITI
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  1. Crawford, Vincent P, 1982. "A Theory of Disagreement in Bargaining," Econometrica, Econometric Society, vol. 50(3), pages 607-37, May.
  2. 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.
  3. Riezman, Raymond, 1991. "Dynamic tariffs with asymmetric information," Journal of International Economics, Elsevier, vol. 30(3-4), pages 267-283, May.
  4. Hungerford, T.L., 1990. "Gatt: A Cooperative Equilibrium In A Noncooperative Trading Regime?," Working Papers 262, Research Seminar in International Economics, University of Michigan.
  5. Bagwell, Kyle & Staiger, Robert W, 1990. "A Theory of Managed Trade," American Economic Review, American Economic Association, vol. 80(4), pages 779-95, September.
  6. Mayer, Wolfgang, 1981. "Theoretical Considerations on Negotiated Tariff Adjustments," Oxford Economic Papers, Oxford University Press, vol. 33(1), pages 135-53, March.
  7. Dilip Abreu & Paul Milgrom & David Pearce, 1997. "Information and timing in repeated partnerships," Levine's Working Paper Archive 636, David K. Levine.
  8. 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.
  9. 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.
  10. Green, Edward J & Porter, Robert H, 1984. "Noncooperative Collusion under Imperfect Price Information," Econometrica, Econometric Society, vol. 52(1), pages 87-100, January.
  11. Baldwin, Robert E. & Clarke, Richard N., 1987. "Game-modeling multilateral trade negotiations," Journal of Policy Modeling, Elsevier, vol. 9(2), pages 257-284.
  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. Segerstrom, Paul S., 1988. "Demons and repentance," Journal of Economic Theory, Elsevier, vol. 45(1), pages 32-52, June.
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