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In our 1992 paper, we analyzed GATT and its dispute settlement procedure (DSP) in the context of a supergame model of international trade featuring both explicit (GATT) and implicit (non-GATT) agreements. Our paper departed from the previous economics literature on GATT enforcement (see, for instance Hungerford (1991) and Ludema (1990)) by incorporating the ``twin engines of international obligation and retaliation'' (Hudec, 1990). International obligation imposed a cost of violating an explicit international agreement, such as GATT, while retaliation could take place either within the rules stipulated by the international agreement or by punishment outside of the agreement. In Section 2 of Kovenock and Thursby (1992), we explicitly documented the prevalence of unilateral retaliation outside of the rules of GATT, either in the absence of a formal complaint or concurrently while the GATT-DSP proceeded. Indeed, in referring to this option of proceeding within the rules of GATT and retaliating outside of the mechanism, our position was emphatic.


This is the accepted version of the following article:

Kovenock, Dan, and Marie Thursby. "GATT, dispute settlement and cooperation: a reply.Economics & Politics 9.1 (1997): 95-98.

which has been published in final form at DOI: 10.1111/1468-0343.00022.

Peer Reviewed






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