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Public versus Private Enforcement of International Economic Law: Standing and Remedy

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  • Alan O. Sykes

Abstract

This paper develops a theory of the rules regarding standing and remedy in international trade and investment agreements. Regarding investment agreements, the paper argues that a credible government-to-firm commitment (or signal) that the capital importer will not engage in expropriation or related practices is required and that a private right of action for money damages is the best way to make such a commitment. In trade agreements, by contrast, importing nations have commitments that are best viewed as government to government rather than government to firm. The parties to trade agreements can enhance their mutual political welfare by declining to enforce commitments that benefit politically inefficacious exporters and can most cheaply do so by reserving to themselves the standing to initiate dispute proceedings—a right to act as a political filter. The paper also suggests why governments may prefer to utilize trade sanctions rather than money damages as the penalty for breach of a trade agreement.

Suggested Citation

  • Alan O. Sykes, 2005. "Public versus Private Enforcement of International Economic Law: Standing and Remedy," The Journal of Legal Studies, University of Chicago Press, vol. 34(2), pages 631-666, June.
    • Handle: RePEc:ucp:jlstud:v:34:y:2005:p:631-666
    DOI: 10.1086/431781
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    References listed on IDEAS

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    1. Kyle Bagwell & Petros C. Mavroidis & Robert W. Staiger, 2003. "The Case for Auctioning Countermeasures in the WTO," NBER Working Papers 9920, National Bureau of Economic Research, Inc.
    2. Giovanni Maggi & Andres Rodriguez-Clare, 1998. "The Value of Trade Agreements in the Presence of Political Pressures," Journal of Political Economy, University of Chicago Press, vol. 106(3), pages 574-601, June.
    3. Schwartz, Warren F & Sykes, Alan O, 2002. "The Economic Structure of Renegotiation and Dispute Resolution in the World Trade Organization," The Journal of Legal Studies, University of Chicago Press, vol. 31(1), pages 179-204, January.
    4. Salas, Mauricio & Jackson, John H, 2000. "Procedural Overview of the WTO EC-Banana Dispute," Journal of International Economic Law, Oxford University Press, vol. 3(1), pages 145-166, March.
    5. Marco Bronckers & Naboth van den Broek, 2005. "Financial Compensation in the WTO," Journal of International Economic Law, Oxford University Press, vol. 8(1), pages 101-126, March.
    6. Goldstein, Judith & Martin, Lisa L., 2000. "Legalization, Trade Liberalization, and Domestic Politics: A Cautionary Note," International Organization, Cambridge University Press, vol. 54(3), pages 603-632, July.
    7. R. W. Staiger & G. Tabellini, 1999. "Do Gatt Rules Help Governments Make Domestic Commitments?," Economics and Politics, Wiley Blackwell, vol. 11(2), pages 109-144, July.
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    Cited by:

    1. Krzysztof Pelc & Johannes Urpelainen, 2015. "When do international economic agreements allow countries to pay to breach?," The Review of International Organizations, Springer, vol. 10(2), pages 231-264, June.
    2. Kyle Bagwell & Chad P. Bown & Robert W. Staiger, 2016. "Is the WTO Passé?," Journal of Economic Literature, American Economic Association, vol. 54(4), pages 1125-1231, December.
    3. William Phelan, 2015. "Enforcement and Escape in the Andean Community: Why the Andean Community of Nations is Not a Replica of the European Union," Journal of Common Market Studies, Wiley Blackwell, vol. 53(4), pages 840-856, July.
    4. Staiger, Robert & Bagwell, Kyle & Bown, Chad, 2015. "Is the WTO Passé?," CEPR Discussion Papers 10672, C.E.P.R. Discussion Papers.
    5. Eric A. Posner, 2009. "Erga Omnes Norms, Institutionalization, and Constitutionalism in International Law," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 165(1), pages 5-23, March.
    6. Ossa, Ralph & Staiger, Robert W. & Sykes, Alan O., 2023. "Standing in international investment and trade disputes," Journal of International Economics, Elsevier, vol. 145(C).

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