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Settling Disputes at the World Trade Organization

Academic dissertation for the Degree of Doctor of Philosophy in Economics
Johannesson, Louise (2018). Settling Disputes at the World Trade Organization. Doctoral Dissertation. School of Business, Örebro University.

Louise Johannesson

This cumulative dissertation consists of five self-contained essays, all o which are closely focused around issues that concern the WTO dispute settlement mechanism (DSM). 

In Essay 1, we describe salient features of the DSM using a unique data set. We observe a spike in new disputes in 2012, which in turn led to an increasing number of panels and appeals. This put the WTO under a heavy workload and delays soon became an issue.

In Essay 2, we show that the DSM often appoint institutional in-siders to serve as judges. Although the DSM was reformed under the WTO, the judges are similar to those found in the GATT. Furthermore, there is an incentive structure in place that encourage the WTO Secretariat to assume a larger role in writing panel reports and for panelists to let them.

Essay 3 examines the role of Special and Differential Treatment (SDT) provision Art. 8.10 of the Dispute Settlement Understanding (DSU) in helping developing countries win disputes against richer coun-tries. We observe that developing countries lose more claims when this provision is applied. I formulate a model and show that this observation can be consistent with the presumed benefit of Art. 8.10.

Essay 4 ad-dresses the problem of delays by asking ourselves whether we can lessen the problem with a permanent panel. I study features such as the panel-ists’ experience and prior working relationships in explaining the time it takes to issue panel reports and efficiency in examining claims. We find that prior collaboration can decrease duration.

Lastly, in Essay 5, we assess the impact on trade for members that are not involved in disputes. There is evidence of positive trade effects after a dispute for non-complainants, but the effects are limited to disputes that did not escalate to adjudication. We found no external dispute effects for adjudicated disputes.

Essay I: "The WTO Dispute Settlement System 1995–2016: A Data Set and Its Descriptive Statistics" (with Petros C. Mavroidis). IFN Working Paper No. 1148. Published in Journal of World Trade 51(3): 357–408.

Essay II: "Black Cat, White Cat: The Identity of the WTO Judges" (with Petros C. Mavroidis). IFN Working Paper No. 1066. Published in Journal of World Trade 49(4): 685–698.    

Essay III: "The Effect of Panel Composition on Developing Countries' Success Rate in the WTO Dispute Settlement". IFN Working Paper No. 1120.

Essay IV: "Efficiency Gains and Time-savings of Permanent Panels in the WTP Dispute Settlement". IFN Working Paper No. 1219.

Essay V: "Are WTO Disputes Public Goods? – Dispute Effects on the Membership". Manuscript.