The Case for Tradable Remedies in WTO Dispute Settlement
In response to concerns over the efficacy of the WTO dispute settlement system, especially in regard to its use by developing countries, Mexico has tabled a proposal to introduce tradable remedies within the Dispute Settlement Understanding. The idea is that a country that has won cause before the WTO, and who is facing non-implementation by the author of the illegal act but feels that its own capacity to exercise its right to impose countermeasures is unlikely to lead to compliance, can auction off that right. The attractiveness of this idea is that it offers an additional possibility to injured WTO members to get something from the dispute settlement mechanism without putting into question the legal nature of the existing contract, that is, the predominantly decentralized system of enforcement in the WTO. Examining all disputes brought to the WTO since its inception, the authors find some support for Mexico's perception that developing countries face a practical problem when they attempt to carry through with effective retaliation within the WTO system. And based on the formal results of Bagwell, Mavroidis, and Staiger (2003), they describe arguments that lend some support to the efficacy of Mexico's proposed solution from the perspective of formal economic theory.
| Main Authors: | , , |
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| Language: | English en_US |
| Published: |
World Bank, Washington, D.C.
2004-05
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| Subjects: | TRADE DISPUTES, WORLD TRADE ORGANIZATION, ENFORCEMENT MECHANISMS, ENFORCEMENT OF FOREIGN JUDGMENTS, TRADE RETALIATION AUCTION, AUCTIONS, BARGAINING POWER, BASIC, BID, BIDDERS, BIDDING, DAMAGES, DISPUTE SETTLEMENT, DISPUTE SETTLEMENT MECHANISM, ECONOMIC THEORY, EXPORT SUBSIDIES, EXPORTS, EXTERNALITIES, EXTERNALITY, IMPORT PROTECTION, NATIONAL INCOME, NEGATIVE EXTERNALITIES, POSITIVE EXTERNALITIES, SPECULATION, STATEMENTS, TRADE POLICY, TRADING SYSTEM, VALUATION, WEB SITE, WTO, WTO MEMBERS, WTO MEMBERSHIP, WTO SECRETARIAT, |
| Online Access: | http://documents.worldbank.org/curated/en/2004/05/4976717/case-tradable-remedies-wto-dispute-settlement https://hdl.handle.net/10986/14017 |
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| Summary: | In response to concerns over the
efficacy of the WTO dispute settlement system, especially in
regard to its use by developing countries, Mexico has tabled
a proposal to introduce tradable remedies within the Dispute
Settlement Understanding. The idea is that a country that
has won cause before the WTO, and who is facing
non-implementation by the author of the illegal act but
feels that its own capacity to exercise its right to impose
countermeasures is unlikely to lead to compliance, can
auction off that right. The attractiveness of this idea is
that it offers an additional possibility to injured WTO
members to get something from the dispute settlement
mechanism without putting into question the legal nature of
the existing contract, that is, the predominantly
decentralized system of enforcement in the WTO. Examining
all disputes brought to the WTO since its inception, the
authors find some support for Mexico's perception that
developing countries face a practical problem when they
attempt to carry through with effective retaliation within
the WTO system. And based on the formal results of Bagwell,
Mavroidis, and Staiger (2003), they describe arguments that
lend some support to the efficacy of Mexico's proposed
solution from the perspective of formal economic theory. |
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