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Pecularities of Retaliation in WTO Dispute Settlement

Author

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  • Kym Anderson

    () (School of Economics, University of Adelaide, Australia)

Abstract

The dispute resolution procedures of the World Trade Organization allow sanctions to be imposed when a country is unwilling to bring a WTO-inconsistent trade measure into conformity. Apart from the fact that the procedure for triggering the retaliation process has ambiguities that need to be removed, the retaliation itself has some undesirable economic features. This paper looks at why compensation is not preferred to retaliation and then examines five economic features of the temporary trade retaliation that WTO may permit under certain conditions. Both efficiency and equity concerns are raised. The paper concludes with some suggestions for reforming this part of WTO dispute resolution during the review of the Dispute Settlement Understanding that is due to be completed by May 2003.

Suggested Citation

  • Kym Anderson, 2002. "Pecularities of Retaliation in WTO Dispute Settlement," Centre for International Economic Studies Working Papers 2002-07, University of Adelaide, Centre for International Economic Studies.
  • Handle: RePEc:adl:cieswp:2002-07
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    File URL: http://www.adelaide.edu.au/cies/papers/0207.pdf
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    References listed on IDEAS

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    1. 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.
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    6. Gary Clyde Hufbauer & Jeffrey J. Schott & Kimberly Ann Elliott, 1990. "Economic Sanctions Reconsidered: 2nd Edition," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 82, January.
    7. Gary Clyde Hufbauer & Jeffrey J. Schott & Kimberly Ann Elliott, 2009. "Economic Sanctions Reconsidered, 3rd Edition (paper)," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 4129.
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    Citations

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    Cited by:

    1. Petros C. Mavroidis, 2016. "Dispute Settlement in the WTO. Mind over Matter," RSCAS Working Papers 2016/04, European University Institute.
    2. Chau, Nancy H. & Färe, Rolf, 2011. "Shadow pricing market access: A trade benefit function approach," Journal of Economic Theory, Elsevier, vol. 146(4), pages 1631-1663, July.
    3. Carsten Herrmann-Pillath, 2006. "Reciprocity and the hidden constitution of world trade," Constitutional Political Economy, Springer, vol. 17(3), pages 133-163, September.
    4. 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.
    5. Bown, Chad P. & Ruta, Michele, 2008. "The economics of permissible WTO retaliation," WTO Staff Working Papers ERSD-2008-04, World Trade Organization (WTO), Economic Research and Statistics Division.
    6. Ludmila Štěrbová & Kamila Trojanová, 2013. "Patent Protection of European Pharmaceutical Innovations in India," Současná Evropa, University of Economics, Prague, pages 35-54.
    7. Pao-Li Chang, 2004. "The Politics of WTO Enforcement Mechanisms," Econometric Society 2004 Australasian Meetings 117, Econometric Society.
    8. Petros C. Mavroidis, 2015. "Dispute Settlement in the WTO (Mind over Matter)," RSCAS Working Papers 2015/34, European University Institute.
    9. Thomas A. Zimmermann, 2005. "WTO Dispute Settlement at Ten: Evolution, Experiences, and Evaluation," International Trade 0504003, EconWPA.
    10. Anderson, Kym, 2004. "Setting the Trade Policy Agenda: What Roles for Economists?," Working Papers 14574, International Agricultural Trade Research Consortium.
    11. Cardwell, Ryan T. & Kerr, William A., 2013. "Reforming WTO Rules on Export Restrictions - Is There Any Point?," Commissioned Papers 158894, Canadian Agricultural Trade Policy Research Network.
    12. Fritz Breuss, 2004. "WTO Dispute Settlement: An Economic Analysis of four EU-US Mini Trade Wars," WIFO Working Papers 231, WIFO.
    13. Fritz Breuss, 2004. "WTO Dispute Settlement: An Economic Analysis of Four EU–US Mini Trade Wars—A Survey," Journal of Industry, Competition and Trade, Springer, vol. 4(4), pages 275-315, December.
    14. Ichiro Araki, 2004. "Comment on Fritz Breuss "WTO Dispute Settlement: An Economic Analysis of Four EU--US Mini Trade Wars"," Journal of Industry, Competition and Trade, Springer, vol. 4(4), pages 345-364, December.

    More about this item

    Keywords

    WTO; Dispute settlement; Compensation; Retaliation;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • K33 - Law and Economics - - Other Substantive Areas of Law - - - International Law
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • P45 - Economic Systems - - Other Economic Systems - - - International Linkages
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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