Cooperation in the shadow of WTO law: why litigate when you can negotiate

Poletti, Arlo and De Bièvre, Dirk and Chatagnier, J. Tyson (2014) Cooperation in the shadow of WTO law: why litigate when you can negotiate. [Working Paper]. LUISS Academy, Roma. p. 23. Working Paper (3/2014). ISBN 9788868560096.

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In the current multilateral trade regime, members often negotiate under the shadow of WTO law. This article develops a formal explanation of the way in which the credible threat to resort to and the actual use of WTO litigation can influence multilateral trade negotiations. We contend that the ability to impose costs on a defendant by way of litigation increases the complainant’s bargaining power, opening a bargaining window and ultimately increasing the chances for cooperation in multilateral trade negotiations. On the other hand, the complainant’s preference for loss-mitigation over gains from retaliation and its expectations about the likelihood that the defendant will not comply with an adverse ruling can augment the defendant’s bargaining leverage. Thus, contrary to conventional wisdom, increased enforcement does not necessarily make actors shy away from further cooperation, although the credibility of the defendant’s non-compliant threats crucially affects the location of any potential negotiated agreement. Empirically, we show that the argument can account for how Brazil, a potential complainant, and the EU and the US, two potential defendants, approached and bargained agricultural negotiations in the Doha round.

Item Type: Report / Paper (Working Paper)
Research documents and activity classification: Working Papers > Refereed Working Papers / of international relevance
Divisions: Department of Political Science
MIUR Scientific Area: Area 14 - Political and Social Sciences > SPS/04 Political Science
Deposited by: Barbara Scipioni
Date Deposited: 10 Apr 2014 16:39
Last Modified: 22 Apr 2015 00:15


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