Countersuits and the Politics of Abandoned WTO Trade Disputes
Political Economy of International Organizations 2016 Annual Meeting Paper
44 Pages Posted: 31 Aug 2014 Last revised: 24 Feb 2017
Date Written: 2016
Why are so many WTO trade disputes initiated but never completed? At least one third of all WTO trade disputes are not settled early, nor go to panel. Given the costs associated with initiating a trade dispute, this is an unusually high number. I argue that abandoned disputes are the result of tit-for-tat strategy: countries abandon disputes when they are subject to countersuits by the respondent country. These countersuits serve as a signal of displeasure at the original dispute, activate industries in the original complainant country to mobilize, and make the dispute more costly. I find evidence that suggests that this tit-for-tat strategy may indeed play a role in disputes being abandoned.
Keywords: WTO, trade disputes, abandoned disputes, countersuits, tit-for-tat, dispute settlement
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