It is a well-known theorem in international trade that a Nash equilibrium between two countries that set optimal quotas non-cooperatively is the complete elimination of international trade. Yet we know that countries do by quotas on one another and that trade is not eliminated. This paper explores the hypothesis that the discrepancy lies in the weakness of Nash equilibrium concept. Specifically, we agree that the replacement of the Nash equilibrium with Greenberg's (1990) concept of a "standard-of-behavior" yields a much more plausible result. We construct a model of the quota retaliation as an "individual contingent threats situation." We show the existence of what Greenberg calls a "stable standard-of-behavior" and examine its welfare properties. In a static, essentially non-cooperative setting, we show that every stable standard-of-behavior supports at least one Pareto-efficient combination of quotas and vice versa. Free trade can be "rationalized" by a stable standard-of-behavior.