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Dispute Settlement in the WTO. Mind over Matter

Author

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  • Petros C. Mavroidis

Abstract

The basic point I advocate in this paper is that the WTO Dispute Settlement System aims to curb unilateralism. No sanctions can be imposed, unless if the arbitration process is through, the purpose of which is to ensure that reciprocal commitments entered should not be unilaterally undone through the commission of illegalities. There are good reasons though, to doubt whether practice guarantees full reciprocity. The insistence on calculating remedies prospectively, and not as of the date when an illegality has been committed, and the ensuing losses for everybody that could or could not be symmetric, lend support to the claim that the WTO regime serves ‘diffuse’ as opposed to ‘specific’ reciprocity. Still, WTO Members continue to routinely submit their disputes to the WTO adjudicating fora, showing through their behaviour that they would rather live in a world where punishment is curbed, than in world where punishment acts as deterrent since full reciprocity would be always guaranteed.

Suggested Citation

  • Petros C. Mavroidis, 2016. "Dispute Settlement in the WTO. Mind over Matter," RSCAS Working Papers 2016/04, European University Institute.
  • Handle: RePEc:rsc:rsceui:2016/04
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    References listed on IDEAS

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    1. Henrik Horn & Petros C. Mavroidis & André Sapir, 2010. "Beyond the WTO? An Anatomy of EU and US Preferential Trade Agreements," The World Economy, Wiley Blackwell, vol. 33(11), pages 1565-1588, November.
    2. Anderson, Kym, 2002. "Peculiarities of retaliation in WTO dispute settlement," World Trade Review, Cambridge University Press, vol. 1(2), pages 123-134, July.
    3. Chase, Claude & Yanovich, Alan & Crawford, Jo-Ann & Ugaz, Pamela, 2013. "Mapping of dispute settlement mechanisms in regional trade agreements: Innovative or variations on a theme?," WTO Staff Working Papers ERSD-2013-07, World Trade Organization (WTO), Economic Research and Statistics Division.
    4. Blonigen, Bruce A. & Bown, Chad P., 2003. "Antidumping and retaliation threats," Journal of International Economics, Elsevier, vol. 60(2), pages 249-273, August.
    5. Nordstrã–M, Hã…Kan & Shaffer, Gregory, 2008. "Access to justice in the World Trade Organization: a case for a small claims procedure?," World Trade Review, Cambridge University Press, vol. 7(4), pages 587-640, October.
    6. Giovanni Maggi & Robert W. Staiger, 2011. "The Role of Dispute Settlement Procedures in International Trade Agreements," The Quarterly Journal of Economics, Oxford University Press, vol. 126(1), pages 475-515.
    7. Henrik Horn & Giovanni Maggi & Robert W. Staiger, 2010. "Trade Agreements as Endogenously Incomplete Contracts," American Economic Review, American Economic Association, vol. 100(1), pages 394-419, March.
    8. Chad P. Bown, 2002. "The Economics of Trade Disputes, the GATT’s Article XXIII, and the WTO’s Dispute Settlement Understanding," Economics and Politics, Wiley Blackwell, vol. 14(3), pages 283-323, November.
    9. Beshkar, Mostafa, 2010. "Optimal remedies in international trade agreements," European Economic Review, Elsevier, vol. 54(3), pages 455-466, April.
    10. Chad P. Bown & Kara M. Reynolds, 2017. "Trade Agreements and Enforcement: Evidence from WTO Dispute Settlement," American Economic Journal: Economic Policy, American Economic Association, vol. 9(4), pages 64-100, November.
    11. Collins-Williams, Terry & Wolfe, Robert, 2010. "Transparency as a trade policy tool: the WTO's cloudy windows," World Trade Review, Cambridge University Press, vol. 9(4), pages 551-581, October.
    12. Pauwelyn,Joost, 2003. "Conflict of Norms in Public International Law," Cambridge Books, Cambridge University Press, number 9780521824880, October.
    13. Chad P. Bown, 2004. "On the Economic Success of GATT/WTO Dispute Settlement," The Review of Economics and Statistics, MIT Press, vol. 86(3), pages 811-823, August.
    14. Bernard M. Hoekman & Petros C. Mavroidis, 2000. "WTO Dispute Settlement, Transparency and Surveillance," The World Economy, Wiley Blackwell, vol. 23(04), pages 527-542, April.
    15. Henrik Horn & Petros C. Mavroidis, 2007. "International trade: dispute settlement," Chapters, in: Andrew T. Guzman & Alan O. Sykes (ed.), Research Handbook in International Economic Law, chapter 5, Edward Elgar Publishing.
    16. 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.
    17. Wilfred Ethier, 2004. "Intellectual Property Rights And Dispute Settlement In The World Trade Organization," Journal of International Economic Law, Oxford University Press, vol. 7(2), pages 449-457, June.
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    Cited by:

    1. Mavroidis, Petros C. & Meagher, Niall & Prusa, Thomas J. & Yanguas, Tatiana, 2017. "Ask for the Moon, Settle for the Stars: What is a Reasonable Period to Comply with WTO Awards?," World Trade Review, Cambridge University Press, vol. 16(2), pages 395-425, April.
    2. Louise Johannesson & Petros C. Mavroidis, 2016. "The WTO Dispute Settlement System 1995-2016: A Data Set and its Descriptive Statistics," RSCAS Working Papers 2016/72, European University Institute.
    3. Johannesson, Louise & Mavroidis, Petros C., 2017. "The WTO Dispute Settlement System 1995-2015: A Data Set and its Descriptive Statistics," Working Paper Series 1148, Research Institute of Industrial Economics.
    4. Bown, Chad P. & Keynes, Soumaya, 2020. "Why Trump shot the Sheriffs: The end of WTO dispute settlement 1.0," Journal of Policy Modeling, Elsevier, vol. 42(4), pages 799-819.

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    More about this item

    Keywords

    WTO; DISPUTE SETTLEMENT; DIFFUSE RECIPROCITY;
    All these keywords.

    JEL classification:

    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General

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