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Developing Countries and Enforcement of Trade Agreements: Why Dispute Settlement Is Not Enough

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Author Info
Bown, Chad P.
Hoekman, Bernard

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Abstract

Poor countries are rarely challenged in formal WTO trade disputes for failing to live up to commitments, reducing the benefits of their participation in international trade agreements. This paper examines the political-economic causes of the failure to challenge poor countries and discusses the static and dynamic costs and externality implications of this failure. Given the weak incentives to enforce WTO rules and disciplines against small and poor members, bolstering the transparency function of the WTO is important to make trade agreements more relevant to trade constituencies in developing countries. While our focus is on the WTO system, our arguments also apply to reciprocal North-South trade agreements.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6459.

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Date of creation: Sep 2007
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Handle: RePEc:cpr:ceprdp:6459

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Related research
Keywords: developing countries; dispute settlement; enforcement; trade agreements; WTO;

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Find related papers by JEL classification:
F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

This paper has been announced in the following NEP Reports:

References listed on IDEAS
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  1. Chad P. Bown, 2005. "Trade Remedies and World Trade Organization Dispute Settlement: Why Are So Few Challenged?," Journal of Legal Studies, University of Chicago Press, vol. 34, pages 515-555. [Downloadable!]
  2. James P. Durling, 2003. "Deference, But Only When Due: WTO Review of Anti-Dumping Measures," Journal of International Economic Law, Oxford University Press, vol. 6(1), pages 125-153, March.
  3. Levy, Philip I & Srinivasan, T N, 1996. "Regionalism and the (Dis)advantage of Dispute-Settlement Access," American Economic Review, American Economic Association, vol. 86(2), pages 93-98, May. [Downloadable!] (restricted)
  4. Kyle Bagwell & Robert W. Staiger, 2004. "The Economics of the World Trading System," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262524341.
  5. Bown, Chad P., 2005. "Trade remedies and World Trade Organization dispute settlement : Why are so few challenged?," Policy Research Working Paper Series 3540, The World Bank. [Downloadable!]
  6. Simeon Djankov & Bernard Hoekman, 1998. "Conditions of Competition and Multilateral Surveillance," The World Economy, Blackwell Publishing, vol. 21(8), pages 1109-1128, November. [Downloadable!] (restricted)
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  7. Bernard Hoekman & Aaditya Mattoo, 2007. "Regulatory Cooperation, Aid For Trade And The Gats," Pacific Economic Review, Blackwell Publishing, vol. 12(4), pages 399-418, October. [Downloadable!] (restricted)
  8. Kyle Bagwell & Robert W. Staiger, 1999. "An Economic Theory of GATT," American Economic Review, American Economic Association, vol. 89(1), pages 215-248, March. [Downloadable!] (restricted)
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  9. Bernard M. Hoekman & Petros C. Mavroidis, 2000. "WTO Dispute Settlement, Transparency and Surveillance," The World Economy, Blackwell Publishing, vol. 23(04), pages 527-542, 04. [Downloadable!] (restricted)
  10. Giovanni Maggi & Andres Rodriguez-Clare, 2005. "A Political-Economy Theory of Trade Agreements," NBER Working Papers 11716, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  11. Giovanni Maggi, 1999. "The Role of Multilateral Institutions in International Trade Cooperation," American Economic Review, American Economic Association, vol. 89(1), pages 190-214, March. [Downloadable!] (restricted)
  12. Bagwell, Kyle & Mavroidis, Petros C. & Staiger, Robert W., 2004. "The case for tradable remedies in WTO dispute settlement," Policy Research Working Paper Series 3314, The World Bank. [Downloadable!]
    Other versions:
  13. Shaffer, Gregory, 2006. "The challenges of WTO law: strategies for developing country adaptation," World Trade Review, Cambridge University Press, vol. 5(02), pages 177-198, July. [Downloadable!]
  14. Chad P. Bown & Bernard M. Hoekman, 2005. "WTO Dispute Settlement and the Missing Developing Country Cases: Engaging the Private Sector," Journal of International Economic Law, Oxford University Press, vol. 8(4), pages 861-890, December.
  15. Eschenbach, Felix & Hoekman, Bernard, 2006. "Services policies in transition economies: on the EU and WTO as commitment mechanisms," World Trade Review, Cambridge University Press, vol. 5(03), pages 415-443, November. [Downloadable!]
    Other versions:
  16. Subramanian, Arvind & Wei, Shang-Jin, 2007. "The WTO promotes trade, strongly but unevenly," Journal of International Economics, Elsevier, vol. 72(1), pages 151-175, May. [Downloadable!] (restricted)
    Other versions:
  17. Staiger, Robert W & Tabellini, Guido, 1987. "Discretionary Trade Policy and Excessive Protection," American Economic Review, American Economic Association, vol. 77(5), pages 823-37, December. [Downloadable!] (restricted)
  18. Kyle Bagwell & Robert W. Staiger, 2005. "Enforcement, Private Political Pressure and the Gatt/Wto Escape Clause," Discussion Papers 0405-13, Columbia University, Department of Economics. [Downloadable!]
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  19. Horn, Henrik & Maggi, Giovanni & Staiger, Rikard W., 2007. "Trade Agreements as Endogenously Incomplete Contracts," Working Paper Series 689, Research Institute of Industrial Economics. [Downloadable!]
    Other versions:
  20. Shang-Jin Wei & Zhiwei Zhang, 2006. "Do External Interventions Work? The Case of Trade Reform Conditions in IMF Supported Programs," NBER Working Papers 12667, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  21. Sykes, Alan O., 2003. "The safeguards mess: a critique of WTO jurisprudence," World Trade Review, Cambridge University Press, vol. 2(03), pages 261-295, November. [Downloadable!]
  22. Horn, Henrik & Mavroidis, Petros C & Nordström, Håkan, 1999. "Is The Use Of The WTO Dispute Settlement System Biased?," CEPR Discussion Papers 2340, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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