GATT, Dispute Settlement and Cooperation

   (298 K)

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.

Published:

• Economics and Politics Volume 4, #2, pp. 151-170 (July 1992). ,
• Reprinted in Analytical and Negotiating Issues in the Global Trading System , edited by Robert Stern (1994), University of Michigan Press.

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