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How Important can the Non-Violation Clause be for the GATT/WTO?

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  • Robert W. Staiger
  • Alan O. Sykes

Abstract

The "non-violation" clause was a major focus of the drafters of GATT in 1947, and its relevance was revisited and reaffirmed with the creation of the WTO in 1995. And according to the terms-of-trade theory of trade agreements, it has an important role to play in facilitating the success of the "shallow integration" approach that the GATT/WTO has adopted. Yet despite the prominence given to the non-violation clause by its legal drafters and suggested by economic theory, in GATT/WTO practice the observed performance of the non-violation complaint has been weak. Can a model account for the observed features of the usage and outcomes of non-violation claims? And if so, what is implied by these weak performance measures about the (on- and off-) equilibrium impacts of the non-violation clause on the joint welfare of the GATT/WTO member governments? We develop a model of non-violation claims in trade agreements, demonstrate that it can account for the observed features of the usage and outcomes of non-violation claims, and show that the weak performance measures of observed non-violation claims are not inconsistent with a valuable role for the non-violation clause in the GATT/WTO.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19256.

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Date of creation: Jul 2013
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Handle: RePEc:nbr:nberwo:19256

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  1. Chad P. Bown, 2005. "Trade Remedies and World Trade Organization Dispute Settlement: Why Are So Few Challenged?," The Journal of Legal Studies, University of Chicago Press, vol. 34(2), pages 515-555, 06.
  2. Oecd, 2005. "Case Law," Nuclear Law Bulletin, OECD Publishing, vol. 2005(2), pages 63-68.
  3. Oecd, 2005. "Case Law," Nuclear Law Bulletin, OECD Publishing, vol. 2005(1), pages 95-110.
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Cited by:
  1. Kara M. Reynolds & Chad P. Bown, 2014. "Trade Flows and Trade Disputes This paper introduces a new data set and establishes a set of basic facts and patterns regarding the 'trade' that countries fight about under WTO dispute settlement. It ," Working Papers 2014-05, American University, Department of Economics.

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