The Role of Economic Theory in WTO Arbitrations

Michele Ruta

No PP2013/02, RSCAS Working Papers from European University Institute

Abstract: How can economic theory be useful in WTO arbitrations? Motivated by this question, this paper reviews the approach that is often used to determine the level of permissible retaliation in international trade disputes (the, so called, "trade effect" approach), and its implementation under specific policy scenarios (tariffs, quotas, subsidies). Through these examples, the paper argues that economic theory, in addition to quantitative economics, can play a useful role in assisting WTO arbitrators in understanding the pros and cons of the trade effect approach and in implementing this approach under different policy scenarios.

Keywords: WTO Arbitrations; Economic Theory; Permissible Retaliation (search for similar items in EconPapers)
Date: 2013-03
New Economics Papers: this item is included in nep-int
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