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This chapter presents some basic ideas to be used in the enterprise of understanding, assessing, and designing suggestions for improving the process of fact-finding (or process of proof) in WTO dispute settlement. In short, the goal is to establish a framework for the analysis which is undertaken in the following chapters. The chapter is divided into two main sections. Section I provides an overview of how the process of fact-finding fits into the overall context of legal adjudication. Section II focuses on the WTO dispute settlement system. It is argued that an optimal process of fact-finding must (i) maximize the goals of the system of adjudication of which it is part; (ii) manage uncertainty and the risk of error efficiently; and (iii) be in harmony with the basic structure of the system of adjudication of which it is part.

This chapter examines the role of domestic political interests in the selection of U.S. cases for World Trade Organization (WTO) adjudication. It first considers how the United States has taken a lead role in the area of trade law enforcement before discussing how legislative constraints and interest group pressure operate in U.S. trade policy. The Kodak–Fuji WTO dispute between the United States and Japan is used to illustrate an example of politicized selection of a case for adjudication. The chapter also analyzes U.S. complaints about market access barriers by leading trade partners. By identifying potential trade disputes, it shows why some cases go forward to adjudication. It also explains how the WTO disputes served an important role in the executive strategy to manage domestic pressure from Congress for a more aggressive policy against China.

This chapter examines Japanese trade policy to promote market access for exports. It considers how the delegation of authority to the bureaucracy influences the choice of trade strategies by Japan. The Japanese legislature grants considerable autonomy to the bureaucracy for management of foreign trade policy. As a result, there should be lower demand for adjudication and less politicization of case selection. Compared to the United States, the chapter shows that Japan follows a more selective adjudication strategy and initiates only a few cases for large industries with less obvious political influence on selection. Analysis of a number of case studies reveal the absence of political pressure on the country's foreign economic policy. The chapter also looks at a dataset of trade barriers that represent potential trade disputes.

This chapter examines the democratic propensity for adjudication by conducting a statistical analysis of the use of adjudication by eighty-one states during the period 1975–2004. It uses the data to explore different dimensions of democratic politics and whether demand for adjudication reflects electoral preference for free trade, legal norms, or accountability mechanisms arising from legislative constraints on executive autonomy. The domestic constraints hypothesis receives support from evidence that states with high checks and balances at home are the most frequent users of adjudication. The chapter also shows that the same dynamic generates a positive correlation between democracy and the likelihood of a state to be targeted as a defendant in World Trade Organization (WTO) disputes. The pattern of trade disputes is shaped by domestic politics in terms of institutions of the complainant and defendant and by geopolitics in terms of alliance relations between trade partners.

This chapter focuses on the indirect or “third-party” interest of developing countries in WTO trade disputes over market access. It then documents the various economic reasons why a country may have an economic third-party interest in a formal GATT/WTO dispute. The chapter takes a sample of data of disputes involving allegations of excessive import protection, and provides an economic assessment of the developing, third-country liberalization gains associated with bilateral, complainant liberalization gains from the respondent. Finally the chapter concludes.

This chapter examines the role of courts in the ability of democratic politicians to support international commitments. Taking a closer look at the domestic political origins of trade disputes is necessary to understand the demand for adjudication. The logic of tied hands and two-level games in bargaining has influenced a large research agenda that brings together analysis of domestic politics and international relations. In particular, existing scholarship highlights the role for domestic politics in the area of trade. The chapter develops hypotheses about how variation in domestic politics affects the demand for use of adjudication in dispute settlement. It also explains how political pressures that shape conditions for liberalization of trade policy also affect trade law enforcement.

This book examines why democratic institutions for accountability encourage use of adjudication to resolve trade disputes. It argues that governments file a formal legal complaint for World Trade Organization (WTO) adjudication as a costly signal to domestic and foreign audiences of the government's support for exporter interests that have been harmed by foreign protectionism. On the defendant side too, allowing oneself to be dragged into court signals support for importer interests that benefit from the trade barrier. The book develops a theory about domestic constraints to explain why democratic states are more likely to file legal complaints against trade barriers and select their cases based on the political influence of the affected industry. It explores the conditions under which states choose legal venues for dispute settlement, and how the legal context changes the outcome. This introductory chapter provides an overview of international trade law enforcement.

The previous chapter introduced some basic concepts related to the process of fact-finding and briefly outlined how those concepts are applied in international dispute settlement proceedings, including WTO dispute settlement. This chapter examines in more detail how panels and the Appellate Body manage the concept of the burden of proof and determine when the burden of proof has been discharged. In other words, the main issue discussed regards the functioning of the burden of proof in WTO dispute settlement. The chapter also discusses the related question of the degree of persuasion that panels must reach in order to determine that the burden of proof has been discharged: that is, it addresses the question of the standard of proof.

This book has investigated why states use adjudication for trade disputes, showing that domestic political pressure influences trade law enforcement through legal strategies. It has also examined the effectiveness of adjudication as a dispute settlement mechanism. This concluding chapter reviews the theory about the political role of adjudication. It considers the tension in how adjudication represents both conflict and cooperation between states as they escalate a trade dispute but do so within agreed upon rules. The tendency to sue friends reflects this dynamic—within a broadly cooperative relationship, trade adjudication can be part of business as usual. The chapter ends by extending the implications of the argument for a broader theory of legalization in international relations.

This introductory chapter begins with a brief discussion of how the evolution and increased sophistication of the WTO legal system has resulted in more complex disputes requiring the resolution of complex factual questions. It then considers how panels and the Appellate Body have failed to provide clear guidance on how the process of fact-finding in WTO dispute settlement functions, including with respect to issues such as the allocation of the burden of proof — which can be determinative of the outcome of a case. An overview of the subsequent chapters is presented.

This chapter examines the effectiveness of legal complaints to bring an end to trade disputes. Using quantitative data from the United States, it shows that when comparing similar kinds of disputes and trade partners, states gained better outcomes through the dispute mechanism. Conditioning on the fact that the most politicized cases are selected for World Trade Organization (WTO) adjudication, the legal forum is quite effective for dispute settlement. The chapter applies statistical techniques of matching to the sample of negotiated trade barriers to adjust for their propensity to be raised in adjudication, and then conducts regression analysis of dispute outcomes in terms of policy change. The results show that adjudication increases the probability of progress to resolve the complaint by one-third. Furthermore, a duration model that controls for the variables that influence strategy selection illustrates how adjudication reduces the time to removal of the barrier.

Chapter 5 explores how international pressures on developing countries contributed to variation in TRIPS implementation, describing the kinds of power at play, the players involved, and the tools they deployed. Trade threats and new trade deals served as vehicles for economic power. Alongside, ideational power was asserted through efforts to shape political environment for TRIPS implementation. The chapter shows that there were ‘compliance‐plus’ pressures from the pro‐IP team, and countervailing pro‐development pressures. These included competing efforts to dominate the framing and discourse of global IP debates through monitoring initiatives, research, support for knowledge communities, and media campaigns. Capacity‐building also had a decisive impact on developing country actions and combined both kinds of power. The chapter highlights that the intensity and focus of international pressures varied by country, as did the timing. Even after developing countries had drafted and implemented TRIPS‐related reforms, many faced pressures to repeal, modify, or strengthen their IP laws. They also faced pressures regarding the administration and enforcement of laws, particularly where these related to the practical use of TRIPS flexibilities.

This introductory chapter explains the European University Institute (EUI) dispute prevention and dispute settlement project and its main policy conclusions. The overview of alternative methods of dispute prevention and dispute settlement in transatlantic relations (section I) showed not only the diversity of intergovernmental dispute prevention and dispute-settlement mechanisms, but also an obvious lack of effective legal and judicial remedies of EU and US citizens against violations of WTO obligations by their own governments. The 14 case-studies of recent transatlantic disputes were classified into four different categories depending on the policy measures concerned and on their underlying conflicts of interests (section II). The survey of different legal, economic, and political theories of dispute prevention and dispute settlement (section III) explained their different value premises and the need for constitutional rules that (1) limit discriminatory abuses of foreign policy discretion; (2) protect domestic policy autonomy for non-discriminatory market regulations; (3) promote ‘negative comity’, ‘positive comity’, and ‘mutual recognition’ as conflict prevention strategies; and (4) ‘decentralize’ and ‘de-politicize’ intergovernmental disputes by empowering EU and US citizens to invoke and enforce precise and unconditional WTO guarantees of freedom and non-discrimination in domestic courts so as to promote rule of law, non-discriminatory conditions of competition, and ‘participatory democracy’ in transatlantic relations.

This chapter examines the jurisdictional conflicts and overlaps between the World Trade Organization (WTO) and regional trade agreements (RTA). It analyses the horizontal allocation of judicial jurisdiction between RTA and the WTO, as expressed in the dispute settlement provisions of each treaty. This chapter concludes that there appears to be no legal solution for a situation where two members are faced with two treaties that contain overlapping and potentially conflicting jurisdictions.

This chapter starts the examination of state sanctions by considering the concept of a trade dispute disqualification from the right to recieve unemployment benefit. The effect of disqualification is to deny unemployment benefit to the claimant in respect of both himself and any dependants. After considering the function of the trade disqualification, the discussion turns to the way in which measures have evolved and have been liberalized since its introduction in 1911. These modifications have gradually narrowed the range of people affected by the disqualification to exclude innocent victims caught up in the dispute. This is then followed by a discussion of the principal features of the present law, as it operates under the Social Security Act 1975, as amended by Social Security Act 1986.

This chapter is divided into five sections. Section II surveys key dispute-settlement reforms ushered in by the WTO, and elaborates on how these are likely to influence US–EC disputes. Section III reports new data on all US–EC disputes at the WTO thus far, and offers a simple contrast with comparable GATT disputes. Section IV empirically tests the argument that the WTO's (nominally) better record in resolving US–EC disputes is due to factors other than the legal reforms embodied in the DSU per se. Section V interprets these results and discusses their implications.

This chapter explores the reasons for the increasing EU preference for a quasi-judicial model of adjudication as far as trade disputes are concerned. It describes the current network of EU free trade agreements (FTA) and the traditional diplomatic dispute settlement mechanism which used to characterize all EU FTA. It explains the key features of the quasi-judicial model of trade adjudication in the FTA with Mexico and Chile, and evaluates how these agreements attempted to address the issue concerning the relationship between bilateral and World Trade Organization (WTO) dispute settlement.