Why Is There so Little Litigation Under Free Trade Agreements? Retaliation and Adjudication in International Dispute Settlement

CTEI Working Paper No. CTEI-2017-14

30 Pages Posted: 23 Jul 2015 Last revised: 9 Aug 2017

Date Written: August 8, 2017

Abstract

Over the past decade, the WTO dispute settlement system has continued to be used extensively, contrasting with the very few disputes taken to inter-state adjudication under FTAs. This paper discusses the causes of this discrepancy, arguing that, besides specific procedural difficulties, it may be explained by a more structural difference between adjudication in a multilateral and in a bilateral setting. The WTO’s global scope and the collective surveillance established by the DSU ensure that findings of breach harm a wrongdoer’s reputation and mobilize community pressure for compliance. Because adjudication within an FTA cannot mobilize the same multilateral forces, it may not only be less effective than WTO adjudication – it may also be perceived as less effective than unilateral retaliation.

Keywords: WTO, Free Trade Agreements, Adjudication, Retaliation

Suggested Citation

Vidigal, Geraldo, Why Is There so Little Litigation Under Free Trade Agreements? Retaliation and Adjudication in International Dispute Settlement (August 8, 2017). CTEI Working Paper No. CTEI-2017-14. Available at SSRN: https://ssrn.com/abstract=2634910 or http://dx.doi.org/10.2139/ssrn.2634910

Geraldo Vidigal (Contact Author)

University of Amsterdam ( email )

P.O. Box 1030
Amsterdam, 1000 BA
Netherlands

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