THE LAW, ECONOMICS, AND POLITICS OF TRADE RETALIATION IN WTO DISPUTE SETTLEMENT, Chad P. Bown & Joost Pauwelyn, eds., Cambridge University Press, 2009
19 Pages Posted: 31 Dec 2008
Date Written: December 29, 2008
Scholars continue to debate over the aim of WTO remedies in light of the ambiguity of the legal texts. One method of discerning the purpose of WTO remedies is by examining Members' practice, constituting the law-in-action of WTO remedies. This chapter's assessment of current practice leads to five interrelated findings: (1) the process for applying an authorized WTO remedy is driven primarily by domestic export interests demanding compliance, not rebalancing; (2) complainant government practice has responded accordingly, focusing on compliance; (3) governments have done so by strategically targeting politically-influential foreign export interests, as opposed to politically influential domestic protectionist interests, while attempting to minimize harm to domestic consumers and consuming industries; (4) constituencies within the complainant Member who fear that their products may be on a retaliation list (that is, importers and import-consuming industries) have been catalyzed to lobby to exempt goods from the retaliation list, apparently more so than producers who would benefit from rebalancing through the imposition of protective tariffs; and (5) overall, Members have not implemented retaliatory countermeasures as frequently as would be predicted were the primary goal rebalancing. Our findings raise the prospect that WTO Member practices could have systemic impacts within the WTO over time. If the ministries representing WTO Members perceive that the objective of WTO remedies is compliance, then such beliefs could affect formal law over time, whether through the negotiation of new legal texts or the interpretation of existing ones. In any case, Members' practices constitute the WTO law-in-action, that is, how formal WTO remedies are actually applied.
Keywords: WTO dispute settlement, remedies, retaliation, rebalancing, inducing compliance, litigation, enforcement, law-in-action
JEL Classification: F13, F14, F53
Suggested Citation: Suggested Citation
Shaffer, Gregory and Ganin, Dan, WTO Remedies: Extrapolating Purpose from Practice (December 29, 2008). Minnesota Legal Studies Research Paper No. 08-51; Minnesota Legal Studies Research Paper No. 08-51. Available at SSRN: https://ssrn.com/abstract=1321507