Trade Disputes under WTO

Abstract

The Dispute Settlement Mechanism is one of the best elements of the World Trade Organisation (WTO) system since it addressed the earlier concerns under the GATT system, of lack of transparency, nonenforceability, discriminatory nature and high degree of ambiguity. In this paper we evaluate the trends and features of trade disputes initiated at the JVTO Dispute Settlement Body during 1995-2003 and then relate the disputes to world trade. The paper first examines the disputes on the basis of major defendants and complainants involved. It reveals a high frequency with which advanced nations or blocs like the United States (US) and European Communities (EC) got involved as complainant or defendant in trade disputes. The paper next groups the disputes based on broad issues on which the disputes have been initiated. The analysis reveals a large number of disputes on certain widely debated or controversial issues such as Trade Related Aspects of Intellectual Property Rights (TRIPS) and import control measures. Thirdly, the paper examines the disputes by category of products involved and concludes that disputes occur more often on products falling in contentious areas such as agriculture and food. The paper ends with an exploratory econometric analysis of the world tradedispute relationship. While it finds no statistically significant causal relationship between trade and disputes, it finds traces of a mutually inverse movement in the two.