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Plaintiffs by proxy: A firm-level approach to WTO dispute resolution

Author

Listed:
  • Jeheung Ryu

    (University of Rochester)

  • Randall W. Stone

    (University of Rochester)

Abstract

Lobbying by multinational business firms drives the agenda of international trade politics. We match Fortune Global 500 firms to WTO disputes in which they have a stake and to their political activities using public disclosure data. The quantitative evidence reveals traces of a principal-agent relationship between major MNCs and the US Trade Representative (USTR). Firms lobby and make political contributions to induce the USTR to lodge a WTO dispute, and once a dispute begins, firms increase their political activity in order to keep USTR on track. Lobbying is overwhelmingly patriotic—the side opposing the US position is barely represented—and we see little evidence of MNCs lobbying against domestic protectionism. When the United States is targeted in a dispute, lobbying by defendant-side firms substantially delays settlement, as the affected firms pressure the government to reject concessions. Lobbying on the complainant side does not delay dispute resolution, as complainant-side firms have mixed incentives, to resolve disputes quickly as well as to hold out for better terms.

Suggested Citation

  • Jeheung Ryu & Randall W. Stone, 2018. "Plaintiffs by proxy: A firm-level approach to WTO dispute resolution," The Review of International Organizations, Springer, vol. 13(2), pages 273-308, June.
    • Handle: RePEc:spr:revint:v:13:y:2018:i:2:d:10.1007_s11558-018-9304-9
    DOI: 10.1007/s11558-018-9304-9
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    More about this item

    Keywords

    Trade; WTO trade disputes; Lobbying; Political contributions; World Trade Organization; MNCs;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F68 - International Economics - - Economic Impacts of Globalization - - - Policy

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