Nothing Special   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/iie/wpaper/wp20-4.html
   My bibliography  Save this paper

Why Trump shot the sheriffs: The end of WTO dispute settlement 1.0

Author

Listed:
  • Chad P. Bown

    (Peterson Institute for International Economics)

  • Soumaya Keynes

    (The Economist)

Abstract
On December 10, 2019, the WTO's 25-year-old system of resolving disputes broke down. This paper explains why. It describes the dysfunctional system that preceded the WTO, when the United States dealt with politically troublesome imports by using voluntary export restraints and increasingly resorted to the "aggressively unilateral" Section 301 policy to resolve trade concerns. The WTO was a compromise between the rest of the world and the United States, whereby the latter accepted some constraints with the expectation that the new system of binding dispute settlement would serve its interests. But although the creation of the WTO resolved some concerns about American unilateralism in the short term, its system of handling disputes turned out to be politically unsustainable.

Suggested Citation

  • Chad P. Bown & Soumaya Keynes, 2020. "Why Trump shot the sheriffs: The end of WTO dispute settlement 1.0," Working Paper Series WP20-4, Peterson Institute for International Economics.
    • Handle: RePEc:iie:wpaper:wp20-4
    as

    Download full text from publisher

    File URL: https://www.piie.com/publications/working-papers/why-trump-shot-sheriffs-end-wto-dispute-settlement-10
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Chad P. Bown & Meredith A. Crowley, 2013. "Self-Enforcing Trade Agreements: Evidence from Time-Varying Trade Policy," American Economic Review, American Economic Association, vol. 103(2), pages 1071-1090, April.
    2. Giovanni Maggi & Robert W. Staiger, 2018. "Trade Disputes And Settlement," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 59(1), pages 19-50, February.
    3. Mr. Douglas A. Irwin, 2005. "The Rise of U.S. Antidumping Activity in Historical Perspective," IMF Working Papers 2005/031, International Monetary Fund.
    4. Anabel González & Euijin Jung, 2020. "Developing Countries Can Help Restore the WTO's Dispute Settlement System," Policy Briefs PB20-1, Peterson Institute for International Economics.
    5. Robert W. Staiger & Kyle Bagwell, 1999. "An Economic Theory of GATT," American Economic Review, American Economic Association, vol. 89(1), pages 215-248, March.
    6. Handley, Kyle, 2014. "Exporting under trade policy uncertainty: Theory and evidence," Journal of International Economics, Elsevier, vol. 94(1), pages 50-66.
    7. Christian Broda & Nuno Limão & David E. Weinstein, 2018. "Optimal Tariffs and Market Power: The Evidence," World Scientific Book Chapters, in: Policy Externalities and International Trade Agreements, chapter 2, pages 13-46, World Scientific Publishing Co. Pte. Ltd..
    8. Kyle Bagwell & Robert W. Staiger, 2011. "What Do Trade Negotiators Negotiate About? Empirical Evidence from the World Trade Organization," American Economic Review, American Economic Association, vol. 101(4), pages 1238-1273, June.
    9. Kyle Handley & Nuno Limão, 2018. "Policy Uncertainty, Trade, and Welfare: Theory and Evidence for China and the United States," World Scientific Book Chapters, in: Policy Externalities and International Trade Agreements, chapter 5, pages 123-175, World Scientific Publishing Co. Pte. Ltd..
    10. Pao-Li Chang, 2002. "The Evolution and Utilization of the GATT/WTO Dispute Settlement Mechanism," Working Papers 475, Research Seminar in International Economics, University of Michigan.
    11. Rodney D. Ludema & Anna Maria Mayda, 2013. "Do terms-of-trade effects matter for trade agreements? Theory and evidence from WTO Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(4), pages 1837-1893.
    12. Alessandro Nicita & Marcelo Olarreaga & Peri Silva, 2018. "Cooperation in WTO’s Tariff Waters?," Journal of Political Economy, University of Chicago Press, vol. 126(3), pages 1302-1338.
    13. Chad P. Bown, 2011. "Taking Stock of Antidumping, Safeguards and Countervailing Duties, 1990–2009," The World Economy, Wiley Blackwell, vol. 34(12), pages 1955-1998, December.
    14. Chad Bown & Kara Reynolds, 2015. "Trade flows and trade disputes," The Review of International Organizations, Springer, vol. 10(2), pages 145-177, June.
    15. Henrik Horn, 2006. "National Treatment in the GATT," American Economic Review, American Economic Association, vol. 96(1), pages 394-404, March.
    16. Douglas A. Irwin, 2005. "The Rise of US Anti‐dumping Activity in Historical Perspective," The World Economy, Wiley Blackwell, vol. 28(5), pages 651-668, May.
    17. Sykes, Alan O., 2003. "The safeguards mess: a critique of WTO jurisprudence," World Trade Review, Cambridge University Press, vol. 2(3), pages 261-295, November.
    18. Douglas A. Irwin, 1994. "Managed Trade: The Case Against Import Targets," Books, American Enterprise Institute, number 51697, September.
    19. Chad P. Bown & Kara M. Reynolds, 2017. "Trade Agreements and Enforcement: Evidence from WTO Dispute Settlement," American Economic Journal: Economic Policy, American Economic Association, vol. 9(4), pages 64-100, November.
    20. Petros C. Mavroidis, 2016. "Dispute Settlement in the WTO. Mind over Matter," RSCAS Working Papers 2016/04, European University Institute.
    21. Giovanni Maggi & Robert W. Staiger, 2011. "The Role of Dispute Settlement Procedures in International Trade Agreements," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(1), pages 475-515.
    22. Schwartz, Warren F & Sykes, Alan O, 2002. "The Economic Structure of Renegotiation and Dispute Resolution in the World Trade Organization," The Journal of Legal Studies, University of Chicago Press, vol. 31(1), pages 179-204, January.
    23. Swagel, Phillip & Mankiw, N, 2005. "Antidumping: The Third Rail of Trade Policy," Scholarly Articles 2961701, Harvard University Department of Economics.
    24. Tetyana Payosova & Gary Clyde Hufbauer & Jeffrey J. Schott, 2018. "The Dispute Settlement Crisis in the World Trade Organization: Causes and Cures," Policy Briefs PB18-5, Peterson Institute for International Economics.
    25. Jeffrey J. Schott & Euijin Jung, 2019. "The WTO’s Existential Crisis: How to Salvage Its Ability to Settle Trade Disputes," Policy Briefs PB19-19, Peterson Institute for International Economics.
    26. C. Fred Bergsten & Marcus Noland, 1993. "Reconcilable Differences? United States-Japan Economic Conflict," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 34, January.
    27. John Greenwald, 2003. "WTO Dispute Settlement: an Exercise in Trade Law Legislation?," Journal of International Economic Law, Oxford University Press, vol. 6(1), pages 113-124, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chad Brown & Paola Conconi & Aksel Erbahar & Lorenzo Trimarchi, 2020. "Trade Protection Along Supply Chains," Working Papers ECARES 2020-52, ULB -- Universite Libre de Bruxelles.
    2. Bown, Chad, 2020. "Export Controls: America’s Other National Security Threat," CEPR Discussion Papers 14739, C.E.P.R. Discussion Papers.
    3. Giuseppe Zaccaria, 2022. "You’re Fired! International Courts, Re‐contracting, and the WTO Appellate Body during the Trump Presidency," Global Policy, London School of Economics and Political Science, vol. 13(3), pages 322-333, June.
    4. Johann Robert Basedow, 2022. "Why de‐judicialize? Explaining state preferences on judicialization in World Trade Organization Dispute Settlement Body and Investor‐to‐State Dispute Settlement reforms," Regulation & Governance, John Wiley & Sons, vol. 16(4), pages 1362-1381, October.
    5. Bown, Chad P., 2021. "The US–China trade war and Phase One agreement," Journal of Policy Modeling, Elsevier, vol. 43(4), pages 805-843.
    6. Ian M. Sheldon, 2022. "The United States' power‐based bargaining and the WTO: Has anything really been gained?," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 44(3), pages 1424-1439, September.
    7. Paul Laurent, & Jeudy Bruno-Philippe., 2021. "Le blocage de l’OMC, un révélateur de la crise du multilatéralisme ?," Bulletin de la Banque de France, Banque de France, issue 234.
    8. Mauro Caselli & Andrea Fracasso & Stefano Schiavo, 2021. "Trade policy and firm performance: introduction to the special section," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 38(1), pages 1-6, April.
    9. Eugene Beaulieu & Janet Whittaker, 2021. ""Two roads diverged in [soft]wood". Targeted dumping, differential pricing methodology, and zeroing: US-Canada anti-dumping in softwood lumber (WTDS534/R)," RSCAS Working Papers 2021/11, European University Institute.
    10. Jason H. Grant & Kathryn A. Boys & Chaoping Xie, 2021. "A new president in the White House: implications for Canadian agricultural trade," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 69(1), pages 45-58, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kyle Bagwell & Chad P. Bown & Robert W. Staiger, 2016. "Is the WTO Passé?," Journal of Economic Literature, American Economic Association, vol. 54(4), pages 1125-1231, December.
    2. Staiger, Robert & Bagwell, Kyle & Bown, Chad, 2015. "Is the WTO Passé?," CEPR Discussion Papers 10672, C.E.P.R. Discussion Papers.
    3. Chad P. Bown & Kara M. Reynolds, 2017. "Trade Agreements and Enforcement: Evidence from WTO Dispute Settlement," American Economic Journal: Economic Policy, American Economic Association, vol. 9(4), pages 64-100, November.
    4. Maggi, Giovanni, 2014. "International Trade Agreements," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 317-390, Elsevier.
    5. Bown,Chad P. & Crowley,Meredith A & Bown,Chad P. & Crowley,Meredith A, 2016. "The empirical landscape of trade policy," Policy Research Working Paper Series 7620, The World Bank.
    6. Chad Bown & Kara Reynolds, 2015. "Trade flows and trade disputes," The Review of International Organizations, Springer, vol. 10(2), pages 145-177, June.
    7. Beshkar, Mostafa & Bond, Eric W. & Rho, Youngwoo, 2015. "Tariff binding and overhang: Theory and evidence," Journal of International Economics, Elsevier, vol. 97(1), pages 1-13.
    8. Lake, James & Linask, Maia K., 2016. "Could tariffs be pro-cyclical?," Journal of International Economics, Elsevier, vol. 103(C), pages 124-146.
    9. Bown, Chad, 2015. "What's Left for the WTO?," CEPR Discussion Papers 11003, C.E.P.R. Discussion Papers.
    10. Groppo, Valeria & Piermartini, Roberta, 2014. "Trade policy uncertainty and the WTO," WTO Staff Working Papers ERSD-2014-23, World Trade Organization (WTO), Economic Research and Statistics Division.
    11. Bown, Chad P., 2014. "Trade policy instruments over time," Policy Research Working Paper Series 6757, The World Bank.
    12. Lorz, Oliver & Thede, Susanna, 2024. "Tariff overhang and aid: Theory and empirics," Journal of Development Economics, Elsevier, vol. 166(C).
    13. Chad P. Bown & Patricia Tovar, 2016. "Preferential Liberalization, Antidumping, and Safeguards: Stumbling Block Evidence from MERCOSUR," Economics and Politics, Wiley Blackwell, vol. 28(3), pages 262-294, November.
    14. Bown, Chad P. & Crowley, Meredith A., 2014. "Emerging economies, trade policy, and macroeconomic shocks," Journal of Development Economics, Elsevier, vol. 111(C), pages 261-273.
    15. Bown, Chad P. & Crowley, Meredith A., 2013. "Import protection, business cycles, and exchange rates: Evidence from the Great Recession," Journal of International Economics, Elsevier, vol. 90(1), pages 50-64.
    16. Conconi, Paola & DeRemer, David R. & Kirchsteiger, Georg & Trimarchi, Lorenzo & Zanardi, Maurizio, 2017. "Suspiciously timed trade disputes," Journal of International Economics, Elsevier, vol. 105(C), pages 57-76.
    17. Limão, Nuno & Handley, Kyle, 2013. "Policy Uncertainty, Trade and Welfare: Theory and Evidence for China and the U.S," CEPR Discussion Papers 9615, C.E.P.R. Discussion Papers.
    18. Crowley, Meredith & Meng, Ning & Song, Huasheng, 2018. "Tariff scares: Trade policy uncertainty and foreign market entry by Chinese firms," Journal of International Economics, Elsevier, vol. 114(C), pages 96-115.
    19. Solleder, Jean-Marc, 2020. "Market power and export taxes," European Economic Review, Elsevier, vol. 125(C).
    20. Jakubik, Adam & Piermartini, Roberta, 2023. "How WTO commitments tame uncertainty," European Economic Review, Elsevier, vol. 157(C).

    More about this item

    Keywords

    WTO; dispute settlement; Appellate Body; antidumping; trade remedies;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iie:wpaper:wp20-4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peterson Institute webmaster (email available below). General contact details of provider: https://edirc.repec.org/data/iieeeus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.