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US–Stainless Steel (Mexico)


The US–Mexico Stainless-Steel dispute presents two interesting questions. First, what role does and should stare decisis (precedent) play in the WTO dispute-resolution system? Second, are there circumstances under which exceptional methodologies, i.e. ‘zeroing’, can better achieve the stated objectives of the agreement than the standard methodologies explicitly stated in the agreement? We argue that the institutional structure and foundational norms of the WTO imply the need for Panels to be bound by the prior decisions of the Appellate Body. Our economic analysis describes the costs and benefits of legal systems with and without precedent. Regarding methodology, we argue that any analysis of the suitability of a methodology (i.e. ‘zeroing’) must be undertaken jointly with an analysis of the underlying objective of the agreement (i.e. remedying injury). We conclude that, under limited circumstances, the ‘zeroing’ methodology is more effective at remedying injury than the ordinary methodology outlined in the Anti-Dumping Agreement.

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Bruce A. Blonigen and Park Jee-Hyeong (2004), ‘Dynamic Pricing in the Presence of Antidumping Policy: Theory and Evidence’, American Economic Review, 94: 134154.

Nicola Gennaioli and Andrei Shleifer (2007a), ‘The Evolution of Common Law’, Journal of Political Economy, 115: 4368.

Nicola Gennaioli and Andrei Shleifer (2007b), ‘Overruling and the Instability of Law’, Journal of Comparative Economics, 35: 309328.

Robert W. Staiger and Frank A. Wolak (1992), ‘The Effects of Domestic Antidumping Law in the Presence of Foreign Monopoly’, Journal of International Economics, 32 (3–4): 265287.

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World Trade Review
  • ISSN: 1474-7456
  • EISSN: 1475-3138
  • URL: /core/journals/world-trade-review
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