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Challenged in Geneva: WTO Litigation Experience and the Design of Preferential Trade Agreements

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  • Wüthrich, Simon
  • Elsig, Manfred

Abstract

What explains the design of international institutions? Existing research has largely neglected how experience in cooperation in one set of international institutions impacts on design choices made by states in other globally-oriented institutions. We contribute to this evolving debate by analyzing spillovers in experience in international trade. We argue that countries' track record of interaction in multilateral trade disputes affects the design of their preferential trade agreements (PTAs). If a country participates in a complaint against a prospective PTA partner at the World Trade Organization (WTO), the challenge in Geneva alerts the defendant's import-competing industries with respect to potential challenges under the planned PTA. As a result, these industries exert pressure on their government to preserve leeway under the future treaty, leading to increased flexibility and a lower level of enforcement in the PTA. We find support for our hypotheses in an empirical analysis of 347 PTAs concluded post 1990.

Suggested Citation

  • Wüthrich, Simon & Elsig, Manfred, 2021. "Challenged in Geneva: WTO Litigation Experience and the Design of Preferential Trade Agreements," Business and Politics, Cambridge University Press, vol. 23(3), pages 344-363, September.
  • Handle: RePEc:cup:buspol:v:23:y:2021:i:3:p:344-363_3
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    Cited by:

    1. Rodrigo Fagundes Cezar, 2022. "The Intricacies of Firms’ Support for Labor Provisions in US Trade Agreements," Global Policy, London School of Economics and Political Science, vol. 13(4), pages 483-494, September.
    2. Elsig, Manfred & Ganeson, Kirthana & Jusoh, Sufian & Lugg, Andrew, 2024. "Why is there no investor-state dispute settlement in RCEP? Bargaining and Contestation in the Investment Regime," Papers 1436, World Trade Institute.

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