How Important Can the Non-Violation Clause Be for the GATT/WTO?

53 Pages Posted: 19 Jul 2013

See all articles by Robert W. Staiger

Robert W. Staiger

Stanford University; University of Wisconsin - Madison - Department of Economics; National Bureau of Economic Research (NBER)

Alan Sykes

Stanford University - Law School

Multiple version iconThere are 2 versions of this paper

Date Written: July 17, 2013

Abstract

The “non-violation” clause was a major focus of the drafters of GATT in 1947, and its relevance was revisited and reaffirmed with the creation of the WTO in 1995. And according to the terms-of-trade theory of trade agreements, it has an important role to play in facilitating the success of the "“shallow integration" ”approach that the GATT/WTO has adopted. Yet despite the prominence given to the non-violation clause by its legal drafters and suggested by economic theory, in GATT/WTO practice the observed performance of the non-violation complaint has been weak. Can a model account for the observed features of the usage and outcomes of non-violation claims? And if so, what is implied by these weak performance measures about the (on- and off-) equilibrium impacts of the non-violation clause on the joint welfare of the GATT/WTO member governments? We develop a model of non-violation claims in trade agreements, demonstrate that it can account for the observed features of the usage and outcomes of non-violation claims, and show that the weak performance measures of observed non-violation claims are not inconsistent with a valuable role for the non-violation clause in the GATT/WTO.

Keywords: GATT, WTO, dispute resolution, non-violation doctrine

JEL Classification: F10, F13, K33

Suggested Citation

Staiger, Robert W. and Sykes, Alan, How Important Can the Non-Violation Clause Be for the GATT/WTO? (July 17, 2013). Available at SSRN: https://ssrn.com/abstract=2295603 or http://dx.doi.org/10.2139/ssrn.2295603

Robert W. Staiger

Stanford University ( email )

Stanford, CA 94305
United States

University of Wisconsin - Madison - Department of Economics ( email )

1180 Observatory Drive
Madison, WI 53706
United States
608-262-2265 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Alan Sykes (Contact Author)

Stanford University - Law School ( email )

559 Nathan Abbott Way
Stanford, CA 94305-8610
United States

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