The Politics of WTO Enforcement Mechanism

Pao-Li Chang ()

No 04-2004, Working Papers from Singapore Management University, School of Economics

Abstract: This paper attempts to develop a formal economic framework to analyze the influences of domestic political considerations by democratic governments in shaping the WTO enforcement outcomes in the wake of a violation ruling against the defendant. Since a different mix of import and export sectors in the defendant and complainant country will benefit from the various potential enforcement outcomes, they become competing forces which steer the strategic interactions between the disputing governments. The results of the paper illustrate the complainant’s strategy in selecting the retaliation list, and the likelihood of the defendant’s compliance or compensation in response to the proposed or foreseeable retaliation, given the political and economic environments on both sides of the disputing parties. This paper also captures the possibility of enforcement failures under the current WTO dispute settlement procedure, where the complainant does not have enough retaliation capacity to induce compliance or some form of compensation from the defendant.

Keywords: trade sanction; enforcement failure; compliance; compensation; political economy (search for similar items in EconPapers)
JEL-codes: F13 K33 K42 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2004-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in SMU Economics and Statistics Working Paper Series

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Working Paper: The Politics of WTO Enforcement Mechanisms (2004)
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