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Globalization and the WTO Dispute Settlement Mechanism: Making a Rules-based Trading Regime Work


  • Khan, Haider
  • Liu, Yibei


We discuss thje role of the dispute settlement mechanism (DSM) of the World Trade Organization (WTO) in the context of a complex characterization of globalization.The dispute settlement mechanism (DSM) of the World Trade Organization (WTO) is at present a controversial exercise at the international level. Reasonable people disagree as to whether it has enhanced and maintained equality between developing and developed countries. Through examining its concrete provisions, procedures and several important factors such as resource availability and political influence outside the WTO, it can be found that there are conditions under which the new rule-based DSM can indeed contribute to promoting developing countries’ status in the system . Consequently, it can provide them with more power to defend their own interests. However, the DSM still does not eliminate the power-based relationships among countries. Developing countries are still affected by biases, which stem from several sources such as high financial and legal resource costs, political pressure generated outside the WTO, declarative WTO legal provisions, etc..A reformed WTO with less asymmetry of power will result in a higher level of global social welfare.

Suggested Citation

  • Khan, Haider & Liu, Yibei, 2008. "Globalization and the WTO Dispute Settlement Mechanism: Making a Rules-based Trading Regime Work," MPRA Paper 7613, University Library of Munich, Germany, revised 2008.
  • Handle: RePEc:pra:mprapa:7613

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    References listed on IDEAS

    1. Holmes, Peter & Rollo, Jim & Young, Alasdair R., 2003. "Emerging trends in WTO dispute settlement : back to the GATT?," Policy Research Working Paper Series 3133, The World Bank.
    2. Shaffer, Gregory, 2006. "The challenges of WTO law: strategies for developing country adaptation," World Trade Review, Cambridge University Press, vol. 5(02), pages 177-198, July.
    3. Narlikar, Amrita, 2005. "The World Trade Organization: A Very Short Introduction," OUP Catalogue, Oxford University Press, number 9780192806086.
    4. Constantine Michalopoulos, 1999. "The Developing Countries in the WTO," The World Economy, Wiley Blackwell, vol. 22(1), pages 117-143, January.
    5. Jackson, John H, 1998. "Dispute Settlement and the WTO: Emerging Problems," Journal of International Economic Law, Oxford University Press, vol. 1(3), pages 329-351, September.
    6. 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, January.
    7. William J. Davey, 2005. "The WTO Dispute Settlement System: The First Ten Years," Journal of International Economic Law, Oxford University Press, vol. 8(1), pages 17-50, March.
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    Cited by:

    1. Khan, Haider, 2008. "Making Globalization Work: Towards Global Economic Justice," MPRA Paper 7864, University Library of Munich, Germany, revised 2008.
    2. Khan, Haider, 2013. "Globalization and Democracy: A Short Introduction," MPRA Paper 49515, University Library of Munich, Germany.

    More about this item


    dispute settlement mechanism (DSM); World Trade Organization (WTO) ; Globalization;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F10 - International Economics - - Trade - - - General

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