We provide a simple but novel model of trade agreements that highlights the role of transaction costs, renegotiation and dispute settlement. The model allows us to characterize the appropriate remedy for breach and whether the agreement should be structured as a system of "property rights" or...

This chapter assesses China's integration into the global trading system by examining areas of international political-economic "friction" associated with its increased trade. We use a number of newly constructed data sets to examine tensions associated with its rapidly increasing trade and the...

East Asian countries have become much more active in utilizing the WTO dispute settlement system to assert their legal rights. The dispute settlement experience so far for these countries has shown strong tendency of domestic governments to defend economic interest of major industries. Their...

A prominent problem with the WTO dispute settlement procedures is the practical difficulty faced by small and developing countries in finding the capacity to effectively retaliate against trading partners that are in violation of their WTO commitments. In light of this problem, Mexico has...

A fundamental objective of the Doha Round of WTO negotiations is to improve the trading prospects of developing countries. The 2001 declaration from the WTO Ministerial Conference in Doha, Qatar, commits the member governments to negotiations aimed at substantial improvements in market access...

This study analyzes a new set of data on the decisions of conventional arbitrators. The main goal is to draw inferences about the extent to which conventional arbitration decisions are fashioned as mechanical compromises of the parties' final offers, without reference to the exogenous facts...

Formal economic analysis of trade agreements typically treats disputes as synonymous with concerns about enforcement. But in reality, most WTO disputes involve disagreements of interpretation concerning the agreement, or instances where the agreement is simply silent. And some have suggested...

This paper examines how the prospect of foreign retaliation affects the antidumping (AD) process in the United States. We separate the capacity for retaliation into two channels: (i) the capacity for foreign government retaliation under the dispute settlement procedures of the GATT/WTO system,...

The great majority of international contracts provides that any disputes which may arise will be decided by arbitration. Legal scholars argue that international arbitration is leading to the development of legal doctrine attuned to the needs of business and independent of national laws. This...

This paper analyzes GATT and its dispute settlement procedure (DSP) in the context of a supergame model of international trade featuring both explicit and implicit agreements. An explicit agreement, such as GATT, may be violated at some positive cost in addition to retaliatory actions that might...