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Developing Countries as Plaintiffs and Defendants in GATT/WTO Trade Disputes

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Author Info
Chad P. Bown
Abstract

Developing countries have been increasing their participation in the formal institutions and proceedings of the multilateral trading system. A prominent example is their more frequent involvement as defendants and plaintiffs in GATT/WTO trade disputes. This paper provides an initial economic appraisal of developing country performance in the GATT/WTO dispute settlement system. We measure the economic resolution of these disputes through trade liberalisation gains, and our results suggest that developing country plaintiffs have had more success under WTO disputes than was the case under the GATT. We also document evidence on potential determinants of this success: the capacity for plaintiffs to make credible retaliatory threats and the guilty determinations by GATT/WTO panels. Finally, there is also some evidence that developing countries have recognised the importance of retaliatory threats and have responded by changing their pattern of dispute initiation under the WTO to better take advantage of the instances in which they have sufficient leverage to threaten retaliation and induce compliance with GATT/WTO obligations. Copyright Blackwell Publishing Ltd 2004.

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Article provided by Blackwell Publishing in its journal The World Economy.

Volume (Year): 27 (2004)
Issue (Month): 1 (01)
Pages: 59-80
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Handle: RePEc:bla:worlde:v:27:y:2004:i:1:p:59-80

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  1. Horn, Henrik & Mavroidis, Petros C, 2006. "A Survey of the Literature on the WTO Dispute Settlement System," CEPR Discussion Papers 6020, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  2. Francois, Joseph & Horn, Henrik & Kaunitz, Niklas, 2008. "Trading Profiles and Developing Country Participation in the WTO Dispute Settlement System," Working Paper Series 730, Research Institute of Industrial Economics. [Downloadable!]
  3. Petros C. Mavroidis & Kyle Bagwell & Robert W. Staiger, 2004. "The case for auctioning countermeasures in the WTO," Discussion Papers 0405-08, Columbia University, Department of Economics. [Downloadable!]
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  4. Limao, Nuno & Saggi, Kamal, 2006. "Tariff retaliation versus financial compensation in the enforcement of international trade agreements," Policy Research Working Paper Series 3873, The World Bank. [Downloadable!]
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  5. Chad P. Bown & Meredith Crowley, 2004. "Policy externalities: how U.S. antidumping affects Japanese exports to the EU," Working Paper Series WP-04-12, Federal Reserve Bank of Chicago. [Downloadable!]
    Other versions:
  6. Khan, Haider & Liu, Yibei, 2008. "Globalization and the WTO Dispute Settlement Mechanism: Making a Rules-based Trading Regime Work," MPRA Paper 7613, University Library of Munich, Germany, revised 2008. [Downloadable!]
  7. R Read, 2005. "Trade dispute settlement mechanisms: the WTO dispute settlement understanding in the wake of the GATT," Working Papers 002303, Lancaster University Management School, Economics Department. [Downloadable!]
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