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Cooperation in the Shadow of WTO Law: Why Litigate When You Can Negotiate

Published online by Cambridge University Press:  03 July 2015

ARLO POLETTI ,
DIRK DE BIÈVRE  and
J. TYSON CHATAGNIER
ARLO POLETTI*
Affiliation:
Department of Political Science and School of Government, LUISS Guido Carli
DIRK DE BIÈVRE*
Affiliation:
Antwerp Centre for Institutions and Multilevel Politics (ACIM), Department of Political Science, University of Antwerp
J. TYSON CHATAGNIER*
Affiliation:
Research Center on International Politics and Conflict Resolution (CeRPIC) – Bruno Kessler Foundation and Johns Hopkins University, SAIS Bologna Center
*
*Email: apoletti@luiss.it
**Email: dirk.debievre@uantwerpen.be
***Email: chatagnier@fbk.eu.
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Abstract

In the current multilateral trade regime, members often negotiate under the shadow of WTO law. This article develops a formal explanation of the way in which the credible threat to resort to and the actual use of WTO litigation can influence multilateral trade negotiations. We contend that the ability to impose costs on a defendant by way of litigation increases the complainant's bargaining power, opening a bargaining window and ultimately increasing the chances for cooperation in multilateral trade negotiations. On the other hand, the complainant's preference for loss-mitigation over gains from retaliation and its expectations about the likelihood that the defendant will not comply with an adverse ruling can augment the defendant's bargaining leverage. Thus, contrary to conventional wisdom, increased enforcement does not necessarily make actors shy away from further cooperation, although the credibility of the defendant's non-compliant threats crucially affects the location of any potential negotiated agreement. Empirically, we show that the argument can account for how Brazil, a potential complainant, and the EU and the US, two potential defendants, approached and bargained agricultural negotiations in the Doha Round.

Type
Review Article
Information
World Trade Review , Volume 14 , Special Issue S1: Judicial Politics in International Trade Relations , July 2015 , pp. S33 - S58
Copyright
Copyright © Arlo Poletti et al. 2015 

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