Should WTO dispute settlement be subsidized?

Sebastian Wilckens

No 2007-02, Economics Working Papers from Christian-Albrechts-University of Kiel, Department of Economics

Abstract: This paper develops a model of the WTO dispute settlement process (DSP) to study the recent proposal by legal scholars to subsidize litigation costs. The high cost of litigation, so the argument, is a major obstacle for developing countries to using the DSP to enforce developed countries? compliance with WTO rules. The paper shows that this proposal may be misguided. In particular, a reduction of litigation costs may lead large countries to impose larger trade impediments where before they may have raised barriers only a little. Thus, a cost reduction may even weaken the smaller countries? position in the DSP. Moreover, the model sheds light on the structure of the dark figure of un-accused offenses, suggesting that the observed record of disputes notified to the WTO is systematically biased.

Keywords: Developing Countries; Dispute Settlement; GATT/WTO; Tariff Retaliation; Trade Disputes (search for similar items in EconPapers)
JEL-codes: F13 (search for similar items in EconPapers)
Date: 2007
New Economics Papers: this item is included in nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cauewp:5439

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