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The Politics of Dispute Settlement Design: Explaining Legalism in Regional Trade Pacts

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  • Smith, James McCall

Abstract

Dispute settlement mechanisms in international trade vary dramatically from one agreement to another. Some mechanisms are highly legalistic, with standing tribunals that resemble national courts in their powers and procedures. Others are diplomatic, requiring only that the disputing countries make a good-faith effort to resolve their differences through consultations. In this article I seek to account for the tremendous variation in institutional design across a set of more than sixty post-1957 regional trade pacts. In contrast to accounts that emphasize the transaction costs of collective action or the functional requirements of deep integration, I find that the level of legalism in each agreement is strongly related to the level of economic asymmetry, in interaction with the proposed depth of liberalization, among member countries.

Suggested Citation

  • Smith, James McCall, 2000. "The Politics of Dispute Settlement Design: Explaining Legalism in Regional Trade Pacts," International Organization, Cambridge University Press, vol. 54(01), pages 137-180, December.
  • Handle: RePEc:cup:intorg:v:54:y:2000:i:01:p:137-180_44
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    1. Rana, Arslan Tariq & Kebewar, Mazen, 2014. "The Political Economy of FDI flows into Developing Countries: Does the depth of International Trade Agreements Matter?," EconStor Preprints 91501, ZBW - German National Library of Economics.
    2. Tadashi Ito, 2007. "NAFTA and productivity convergence between Mexico and the US," IHEID Working Papers 26-2007, Economics Section, The Graduate Institute of International Studies, revised 27 Nov 2007.
    3. Besir Ceka and Brian Burgo, 2014. "Discovering Cooperation: A Contractual Approach to Institutional Change in Regional International Organizations," EUI-RSCAS Working Papers p0388, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
    4. Bernauer, Thomas & Kalbhenn, Anna & Koubi, Vally & Ruoff, Gabi, 2010. "On commitment levels and compliance mechanisms: Determinants of participation in global environmental agreements," Center for European, Governance and Economic Development Research Discussion Papers 94, University of Goettingen, Department of Economics.
    5. Andy Thorpe & Catherine Robinson, 2004. "When goliaths clash: US and EU differences over the labeling of food products derived from genetically modified organisms," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 21(4), pages 287-298, January.
    6. Blome, Kerstin, 2011. "Wie erfolgversprechend ist die Reproduktion institutionellen Designs? Individualbeschwerden im Kontext des Inter-Amerikanischen Menschenrechtssystems sowie des juristischen Systems der Andengemeinscha," TranState Working Papers 144, University of Bremen, Collaborative Research Center 597: Transformations of the State.
    7. Chisik, Richard, 2012. "Trade disputes, quality choice, and economic integration," Journal of International Economics, Elsevier, vol. 88(1), pages 47-61.
    8. Daniel Matisoff, 2010. "Are international environmental agreements enforceable? implications for institutional design," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 10(3), pages 165-186, September.
    9. Robert G. Finbow, 2016. "Restructuring the State through Economic and Trade Agreements: The Case of Investment Disputes Resolution," Politics and Governance, Cogitatio Press, vol. 4(3), pages 62-76.
    10. Rana Arslan Tariq, 2015. "Trade and Conflicts: Do Preferential Trade Agreements Matter?," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 21(4), pages 561-574, December.
    11. Áslaug Ásgeirsdóttir & Martin Steinwand, 2015. "Dispute settlement mechanisms and maritime boundary settlements," The Review of International Organizations, Springer, vol. 10(2), pages 119-143, June.
    12. Jérôme Sgard, 2004. "IMF in Theory: Sovereign Debts, Judicialisation and Multilateralism," Working Papers hal-01065546, HAL.
    13. Christopher Marcoux & Johannes Urpelainen, 2013. "Non-compliance by design: Moribund hard law in international institutions," The Review of International Organizations, Springer, vol. 8(2), pages 163-191, June.
    14. Gabriele Spilker & Vally Koubi, 2016. "The effects of treaty legality and domestic institutional hurdles on environmental treaty ratification," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 16(2), pages 223-238, April.
    15. Tanja A. Börzel & Tobias Hofmann & Diana Panke, 2011. "Policy Matters But How? Explaining Non-Compliance Dynamics in the EU," KFG Working Papers p0024, Free University Berlin.
    16. Daniel Blake & Autumn Payton, 2015. "Balancing design objectives: Analyzing new data on voting rules in intergovernmental organizations," The Review of International Organizations, Springer, vol. 10(3), pages 377-402, September.
    17. Johannes Urpelainen, 2009. "Political-economic problems in trade capacity building," The Review of International Organizations, Springer, vol. 4(4), pages 329-359, December.
    18. Andreas Dür & Leonardo Baccini & Manfred Elsig, 2014. "The design of international trade agreements: Introducing a new dataset," The Review of International Organizations, Springer, vol. 9(3), pages 353-375, September.
    19. Yoram Haftel, 2013. "Commerce and institutions: Trade, scope, and the design of regional economic organizations," The Review of International Organizations, Springer, vol. 8(3), pages 389-414, September.
    20. Mondré, Aletta & Zangl, Bernhard, 2005. "Judicialization in international security: A theoretical concept and some preliminary evidence," TranState Working Papers 27, University of Bremen, Collaborative Research Center 597: Transformations of the State.
    21. Goertz, Gary & Powers, Kathy, 2014. "Regional governance: The evolution of a new institutional form," Discussion Papers, Research Unit: Global Governance SP IV 2014-106, Social Science Research Center Berlin (WZB).
    22. Julia Gray & Jonathan Slapin, 2012. "How effective are preferential trade agreements? Ask the experts," The Review of International Organizations, Springer, vol. 7(3), pages 309-333, September.

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