The Role of Economic Theory in WTO Arbitrations
AbstractHow can economic theory be useful in WTO arbitrations? Motivated by this question, this paper reviews the approach that is often used to determine the level of permissible retaliation in international trade disputes (the, so called, "trade effect" approach), and its implementation under specific policy scenarios (tariffs, quotas, subsidies). Through these examples, the paper argues that economic theory, in addition to quantitative economics, can play a useful role in assisting WTO arbitrators in understanding the pros and cons of the trade effect approach and in implementing this approach under different policy scenarios.
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Bibliographic InfoPaper provided by European University Institute in its series RSCAS Working Papers with number PP2013/02.
Date of creation: Mar 2013
Date of revision:
WTO Arbitrations; Economic Theory; Permissible Retaliation;
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- Varian, H.R., 1993.
"What Use is Economic Theory?,"
93-14, Michigan - Center for Research on Economic & Social Theory.
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