Trade Justice Delayed is Trade Justice Denied

5 Pages Posted: 6 Dec 2019

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Cato Institute

Cato Institute

Simon Lester

Cato Institute

James Baachus

University of Central Florida

Date Written: November 20, 2019

Abstract

International law is not known for being quick or effective. Cases can drag on for years, have limited legal force, and are infamous for noncompliance. Until recently, the World Trade Organization (WTO) dispute settlement process had served as a beacon of hope for being one of the fastest and most effective international dispute settlement systems in the history of the world.

It may still hold that title, but it has slowed down considerably. Cases take much longer to complete today than they did at the start of the WTO in 1995.

These delays have undermined the WTO’s usefulness as a way to resolve trade disputes. Today, with the process so much slower, governments can have a three-year or longer “free pass” to implement illegal protectionist measures while litigation drags on. Even the most obvious violation of the rules can take a long time to adjudicate. For the rule of law to work, there must be some degree of timeliness in the litigation process.

We are in the midst of a major crisis in WTO dispute settlement, as the United States has challenged various aspects of the Appellate Body’s operation and possibly its very existence. Although this crisis will be difficult to resolve, perhaps raising such fundamental issues offers an opportunity to think about a broader reform agenda. A key element of such reform should be finding ways to make dispute settlement faster and more effective. The adoption of reforms toward that end could be a positive step forward at a time when much of the world trading system is moving backward from trade liberalization and the rule of law.

Keywords: international law, WTO, World Trade Organization, trade law, DSB, Dispute Settlement Body, DSU, Dispute Settlement Understanding

JEL Classification: K1, K10, K13, K14, K22, K33

Suggested Citation

Institute, Cato and Lester, Simon and Bacchus, James, Trade Justice Delayed is Trade Justice Denied (November 20, 2019). Free Trade Bulletin No. 75. Available at SSRN: https://ssrn.com/abstract=3490661

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Simon Lester (Contact Author)

Cato Institute ( email )

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James Bacchus

University of Central Florida ( email )

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