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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.
Bernard M., Hoekman

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Abstract

Poor countries are rarely challenged in formal World Trade Organization 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 World Trade Organization rules and disciplines against small and poor members, bolstering the transparency function of the World Trade Organization is important for making trade agreements more relevant to trade constituencies in developing countries. Although the paper focuses on the World Trade Organization system, the arguments also apply to reciprocal North-South trade agreements.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4450.

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Date of creation: 01 Dec 2007
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Handle: RePEc:wbk:wbrwps:4450

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Keywords: Economic Theory&Research; Trade Law; Free Trade; Emerging Markets; World Trade Organization;

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  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. 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!]
  7. 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.
  8. 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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  9. 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!]
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  10. 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)
  11. 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)
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  12. 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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  13. 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)
  14. 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)
  15. 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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  16. Horn, Henrik & Maggi, Giovanni & Staiger, Rikard W., 2007. "Trade Agreements as Endogenously Incomplete Contracts," Working Paper Series 689, Research Institute of Industrial Economics. [Downloadable!]
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  17. 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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  18. 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)
  19. 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!]
  20. 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)
  21. 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!]
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  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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