Date of Award
Doctor of Philosophy (PhD)
David C. Earnest
Jesse T. Richman
Kurt T. Gaubatz
This study examines the World Trade Organization (WTO) to test how, if at all, its Dispute Settlement Body (DSB) serves the needs of its members. More specifically, it probes why countries would join the institution, but do not use it if a trade dispute arises. To test this expectation, the study hypothesizes that exorbitant dispute settlement costs can inhibit litigation. This occurs, however, across all dyads and not just when developing and developed countries litigate.
The project uses mixed methods comprising an extensive form game, case studies and the information theory approach for comparative case analysis. The cases selected have power disparities, and variation in the dependent variable, since not all of them are litigated. Additionally, they all feature cement as the contested good and invocation of the Anti-Dumping Agreement for reprieve. These disputes are China – Cement (between China and Jamaica); Guatemala – Cement I and II (between Guatemala and Mexico); and United States – Cement (between the United States and Mexico).
The formal model shows that with the same litigation costs, there is a pure subgame perfect Nash equilibrium where both states will engage in protectionism and avoid filing. In situations where one state has a higher burden to seek recourse, its trading partner will protect as its dominant strategy. The affected state is then forced to continue with free trade and not use the DSB, or respond with protectionism and then acquiesce since it cannot afford the full litigation process.
The case studies highlight how legal capacity and other associated costs can catalyze DSB participation, or induce non-involvement. Countries that have membership in other dispute settlement organizations, DSB experience, as well as domestic and international experience with the Anti-Dumping Agreement are more likely to litigate. The likelihood of litigation also increases if the contested good contributes significantly towards GDP and if the country expects to win. The information theory approach tests these results under conditions of reduced uncertainty and validates some of these findings.
Generally, the study shows that non-participatory membership is relative to the timing of the dispute, the countries involved, and their calculations of the costs against the projected benefits.
Grey, Felicia A..
"Empty Chair at the Table: Bargaining, Costs and Litigation at the World Trade Organization"
(2017). Doctor of Philosophy (PhD), Dissertation, International Studies, Old Dominion University, DOI: 10.25777/f269-1765