Why do member countries choose not to participate in the World Trade Organization’s Dispute Settlement Body?

Felicia A. Grey

The International Trade Journal, 2019, vol. 33, issue 2, 139-159

Abstract: This study examines non-participatory membership in the WTO’s Dispute Settlement Body. It uses an extensive form game that models trade and dispute settlement, costs for litigation, and prisoner’s dilemma-like payoffs. The study finds that, with the same litigation costs, there is a pure subgame perfect Nash equilibrium where both states will engage in protectionism and avoid filing. If one state has a higher litigation cost, it can be locked out of recourse and be worse off than it would be ex ante. These results, however, do not capture third-party litigation; neither do they examine the inability to impose countermeasures.

Date: 2019
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DOI: 10.1080/08853908.2018.1480435

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