Cost-Benefit Analysis of a WTO Dispute

Since the WTO's inception in 1995, the number of cases it has dealt with has exceeded the number of disputes under the GATT. This suggests that Members have found the WTO dispute settlement system a useful means to pursue their interests. In this paper, we analyze an ongoing WTO dispute to illustrate the economic and political costs and benefits that accrue to parties when they engage themselves into the formal dispute process. We draw on the Philippine-Australian case, which challenges the latter's quarantine policy on fresh fruit and vegetables, to understand further how the WTO dispute settlement system affects state behavior and litigation patterns. This particular case is also of keen interest to a number of countries, including the EC, US, Canada, Ecuador, Thailand, China, India and Chile.