The Case for Tradable Remedies in WTO Dispute Settlement

52 Pages Posted: 20 Apr 2016

See all articles by Kyle Bagwell

Kyle Bagwell

Stanford University - Department of Economics; National Bureau of Economic Research (NBER)

Petros C. Mavroidis

Columbia University - Law School; European University Institute - Department of Law (LAW); European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS)

Robert W. Staiger

Stanford University; University of Wisconsin - Madison - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: May 20, 2004

Abstract

In response to concerns over the efficacy of the WTO dispute settlement system, especially in regard to its use by developing countries, Mexico has tabled a proposal to introduce tradable remedies within the Dispute Settlement Understanding. The idea is that a country that has won cause before the WTO, and who is facing non-implementation by the author of the illegal act but feels that its own capacity to exercise its right to impose countermeasures is unlikely to lead to compliance, can auction off that right. The attractiveness of this idea is that it offers an additional possibility to injured WTO members to get something from the dispute settlement mechanism without putting into question the legal nature of the existing contract, that is, the predominantly decentralized system of enforcement in the WTO. Examining all disputes brought to the WTO since its inception, the authors find some support for Mexico's perception that developing countries face a practical problem when they attempt to carry through with effective retaliation within the WTO system. And based on the formal results of Bagwell, Mavroidis, and Staiger (2003), they describe arguments that lend some support to the efficacy of Mexico's proposed solution from the perspective of formal economic theory.

This paper - a product of Trade, Development Research Group - is part of a larger effort in the group to promote discussions on the efficacy of the WTO dispute settlement system.

Suggested Citation

Bagwell, Kyle and Mavroidis, Petros C. and Staiger, Robert W., The Case for Tradable Remedies in WTO Dispute Settlement (May 20, 2004). Available at SSRN: https://ssrn.com/abstract=610359

Kyle Bagwell (Contact Author)

Stanford University - Department of Economics ( email )

Landau Economics Building
579 Serra Mall
Stanford, CA 94305-6072
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Petros C. Mavroidis

Columbia University - Law School ( email )

435 West 116th Street
New York, NY 10025
United States

European University Institute - Department of Law (LAW) ( email )

Via Bolognese 156 (Villa Salviati)
50-139 Firenze
ITALY

European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS) ( email )

Villa La Fonte, via delle Fontanelle 18
50016 San Domenico di Fiesole
Florence, Florence 50014
Italy

Robert W. Staiger

Stanford University ( email )

Stanford, CA 94305
United States

University of Wisconsin - Madison - Department of Economics ( email )

1180 Observatory Drive
Madison, WI 53706
United States
608-262-2265 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
515
Abstract Views
4,475
rank
67,003
PlumX Metrics