Constraining and supporting effects of the multilateral trading system on U.S. unilateralism
The subject of this paper is Section 301 of the Trade Act of 1974 of the United States, a statute that for the past 35 years has allowed the U.S. to unilaterally handle its trade disputes. More specifically, the paper examines the constraining and supporting effects of the multilateral trading system (GATT and WTO) on the effectiveness of Section 301 in general (127 cases), and of retaliatory threats and sanctions in particular (44 cases). In contrast with previous empirical papers, the emphasis is on the gradual interaction between both instances, with special attention to the escalation of the multilateral dispute and the timing of retaliatory threats and sanctions (if any). The paper shows that contrary to conventional wisdom, Section 301 has been less about ‘aggressive unilateralism’ (Bhagwati and Patrick 1991) than about reinforcing the multilateral trading system and the U.S. agenda in it. Section 301 proceedings and retaliation were often used in contravention of international trade law; but they were also used as tools to enforce multilateral rulings or to advance the multilateral agenda upon non-Members or on new issues. To address the effectiveness question, a qualitative response model is used. Results confirm the hypothesis prevalent in the extant literature that a process of escalation at the GATT/WTO is correlated with a higher success rate of Section 301 investigations in changing the target country’s policy. However, the impact is not linear; a settlement is more likely early in the bargaining stages rather than after a ruling is issued by a GATT/WTO panel. The empirical estimation is based on a comprehensive dataset on all Section 301 cases and on the related GATT/WTO dispute(s); and on 45 case studies outlined in the Appendix which, supplemented by the case studies of Bayard & Elliott (1994), are the basis for the coding of the dependent variable.
|Date of creation:||16 Jun 2010|
|Contact details of provider:|| Postal: P.O. Box 36, 1211 Geneva 21|
Phone: ++41 22 731 17 30
Fax: ++41 22 738 43 06
Web page: http://www.graduateinstitute.ch/economics
More information through EDIRC
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.:
- Munkin, Murat K. & Trivedi, Pravin K., 2008. "Bayesian analysis of the ordered probit model with endogenous selection," Journal of Econometrics, Elsevier, vol. 143(2), pages 334-348, April.
- Kimberly Ann Elliott & Thomas O. Bayard, 1994. "Reciprocity and Retaliation in U.S. Trade Policy," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 78, November.
- Mansfield, Edward D. & Reinhardt, Eric, 2008. "International Institutions and the Volatility of International Trade," International Organization, Cambridge University Press, vol. 62(04), pages 621-652, October.
- Rivers, Douglas & Vuong, Quang H., 1988. "Limited information estimators and exogeneity tests for simultaneous probit models," Journal of Econometrics, Elsevier, vol. 39(3), pages 347-366, November.
When requesting a correction, please mention this item's handle: RePEc:gii:giihei:heidwp09-2010. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dorina Dobre)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.