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Developing countries and enforcement of trade agreements : why dispute settlement is not enough

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  • Bown, Chad P.
  • Bernard M., Hoekman

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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Bibliographic Info

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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References

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  1. Shaffer, Gregory, 2006. "The challenges of WTO law: strategies for developing country adaptation," World Trade Review, Cambridge University Press, Cambridge University Press, vol. 5(02), pages 177-198, July.
  2. James P. Durling, 2003. "Deference, But Only When Due: WTO Review of Anti-Dumping Measures," Journal of International Economic Law, Oxford University Press, Oxford University Press, vol. 6(1), pages 125-153, March.
  3. Robert W. Staiger & Kyle Bagwell, 1999. "An Economic Theory of GATT," American Economic Review, American Economic Association, American Economic Association, vol. 89(1), pages 215-248, March.
  4. Giovanni Maggi & Andrés Rodríguez-Clare, 2007. "A Political-Economy Theory of Trade Agreements," American Economic Review, American Economic Association, American Economic Association, vol. 97(4), pages 1374-1406, September.
  5. Subramanian, Arvind & Wei, Shang-Jin, 2005. "The WTO Promotes Trade, Strongly But Unevenly," CEPR Discussion Papers, C.E.P.R. Discussion Papers 5122, C.E.P.R. Discussion Papers.
  6. 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, University of Chicago Press, vol. 34(2), pages 515-555, 06.
  7. Horn, Henrik & Maggi, Giovanni & Staiger, Rikard W., 2007. "Trade Agreements as Endogenously Incomplete Contracts," Working Paper Series, Research Institute of Industrial Economics 689, Research Institute of Industrial Economics.
  8. Francois, Joseph F. & Martin, Will, 2004. "Commercial policy variability, bindings, and market access," European Economic Review, Elsevier, Elsevier, vol. 48(3), pages 665-679, June.
  9. Chad P. Bown, 2004. "On the Economic Success of GATT/WTO Dispute Settlement," The Review of Economics and Statistics, MIT Press, vol. 86(3), pages 811-823, August.
  10. Horn, Henrik & Mavroidis, Petros C & Nordström, Håkan, 1999. "Is The Use Of The WTO Dispute Settlement System Biased?," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2340, C.E.P.R. Discussion Papers.
  11. Bown, Chad P., 2005. "Global antidumping database version 1.0," Policy Research Working Paper Series 3737, The World Bank.
  12. Kyle Bagwell & Robert W. Staiger, 2004. "The Economics of the World Trading System," MIT Press Books, The MIT Press, The MIT Press, edition 1, volume 1, number 0262524341, December.
  13. Staiger, Robert W & Tabellini, Guido, 1987. "Discretionary Trade Policy and Excessive Protection," American Economic Review, American Economic Association, American Economic Association, vol. 77(5), pages 823-37, December.
  14. Chad P. Bown, 2004. "Developing Countries as Plaintiffs and Defendants in GATT/WTO Trade Disputes," The World Economy, Wiley Blackwell, vol. 27(1), pages 59-80, 01.
  15. 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.
  16. Simeon Djankov & Bernard Hoekman, 1998. "Conditions of Competition and Multilateral Surveillance," The World Economy, Wiley Blackwell, vol. 21(8), pages 1109-1128, November.
  17. Levy, Philip I & Srinivasan, T N, 1996. "Regionalism and the (Dis)advantage of Dispute-Settlement Access," American Economic Review, American Economic Association, American Economic Association, vol. 86(2), pages 93-98, May.
  18. Sykes, Alan O., 2003. "The safeguards mess: a critique of WTO jurisprudence," World Trade Review, Cambridge University Press, Cambridge University Press, vol. 2(03), pages 261-295, November.
  19. 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, Oxford University Press, vol. 8(4), pages 861-890, December.
  20. Bernard Hoekman & Aaditya Mattoo, 2007. "Regulatory Cooperation, Aid For Trade And The Gats," Pacific Economic Review, Wiley Blackwell, Wiley Blackwell, vol. 12(4), pages 399-418, October.
  21. Wei, Shang-Jin & Zhang, Zhiwei, 2010. "Do external interventions work? The case of trade reform conditions in IMF supported programs," Journal of Development Economics, Elsevier, Elsevier, vol. 92(1), pages 71-81, May.
  22. Chad P. Bown, 2005. "Participation in," World Bank Economic Review, World Bank Group, World Bank Group, vol. 19(2), pages 287-310.
  23. Eschenbach, Felix & Hoekman, Bernard, 2006. "Services Policies in Transition Economies: On the EU and WTO as Commitment Mechanisms," CEPR Discussion Papers, C.E.P.R. Discussion Papers 5624, C.E.P.R. Discussion Papers.
  24. Giovanni Maggi, 1999. "The Role of Multilateral Institutions in International Trade Cooperation," American Economic Review, American Economic Association, American Economic Association, vol. 89(1), pages 190-214, March.
  25. Bernard M. Hoekman & Petros C. Mavroidis, 2000. "WTO Dispute Settlement, Transparency and Surveillance," The World Economy, Wiley Blackwell, vol. 23(04), pages 527-542, 04.
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Citations

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Cited by:
  1. Hoekman, Bernard & Sekkat, Khalid, 2010. "Arab Economic Integration: Missing links," CEPR Discussion Papers, C.E.P.R. Discussion Papers 7807, C.E.P.R. Discussion Papers.
  2. Bernard Hoekman, 2008. "The General Agreement on Trade in Services: Doomed to Fail? Does it Matter?," Journal of Industry, Competition and Trade, Springer, Springer, vol. 8(3), pages 295-318, December.
  3. Manfred Elsig, 2010. "The World Trade Organization at work: Performance in a member-driven milieu," The Review of International Organizations, Springer, Springer, vol. 5(3), pages 345-363, September.

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