10 Jun 2013
Compliance with WTO Dispute Rulings
Gabriele Spilker, ETH Zurich - Working Paper No 2011/25 | July 2012
Country pairs such as the US and the EU meet several times in front of the WTO dispute settlement body. Sometimes they resolve their dispute quickly whereas sometimes they do not succeed in solving the dispute at all. This paper tries to answer the question why the same countries seem to have no difficulties solving one trade dispute while they do not succeed in solving others. I argue
that it is crucial to look at the interaction between dispute complexity and the domestic industry concerned to explain the time until compliance with adverse WTO dispute rulings is achieved.
Using a Cox duration model to analyze 96 compliance cases, the results confirm that disputes, which involve either non-tariff barriers to trade or the agricultural sector, significantly prolong the time it takes a country to bring its trade measures back into congruence with WTO law. This is in line with the idea that governments can rely on complex instruments for trade protection to significantly stretch out the compliance period allowing a politically relevant sector to enjoy the benefits of trade protection for a longer time. In this sense compliance with adverse rulings is an important thing to study since affected industries might not be able to prevent a WTO dispute from happening but they can well influence their government to give them more time to adapt to the new situation.