Working Paper: NBER ID: w4071
Authors: 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 GAIT-DSP: unilateral retaliation and the effect of inordinate delays in the operation of DSP.
Keywords: GATT; dispute settlement; international trade; tariff cooperation
JEL Codes: F13; F51
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| international obligations (F53) | tariff cooperation (F13) |
| GATT's DSP structure (F13) | reliance on legal procedures (K41) |
| delays in DSP process (C69) | unilateral retaliation (D74) |