Working Paper: CEPR ID: DP10164
Authors: Chad P. Bown; Kara M. Reynolds
Abstract: This paper introduces a new data set and establishes a set of basic facts and patterns regarding the ?trade? that countries fight about under WTO dispute settlement. It characterizes the scope of products, as well as the levels of and changes to the trade values, market shares, volumes, and prices for those goods that eventually become subject to WTO litigation. The first result is striking heterogeneity in the level of market access at stake across disputes: e.g., 14 percent of cases over disputed import products feature bilateral trade that is less than $1 million per year, and another 15 percent feature bilateral trade that is more than $1 billion per year. Nevertheless, some strong patterns emerge from a more detailed examination of the data. Both high- and low-income complainants tend to suffer important losses in foreign market access in the products that ultimately become subject to dispute. Furthermore, while the respondent?s imposition of an allegedly WTO-inconsistent policy is associated with reductions, on average, to trade values, volumes and exporter-received prices, there is some evidence of differences in the size of these changes across both the different types of policies under dispute and the potential exporter country litigants. Finally, these different types of policies under dispute can have dissimilar trade effects for the complainant relative to other (non-complainant) exporters of the disputed product, and this is likely to affect the litigation allegiance of third countries.
Keywords: dispute settlement; trade agreements; WTO
JEL Codes: F13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Imposition of allegedly WTO-inconsistent policies (F13) | Reductions in trade values (F14) |
| Imposition of allegedly WTO-inconsistent policies (F13) | Reductions in trade volumes (F69) |
| Imposition of allegedly WTO-inconsistent policies (F13) | Reductions in exporter-received prices (F14) |
| Complainants in WTO disputes (F13) | Losses in foreign market access (F69) |
| Global policies (F68) | Smaller reductions in import values (F14) |
| Global policies (F68) | Smaller reductions in import volumes (F14) |
| Partial policies (G52) | Larger reductions in import values (F14) |
| Partial policies (G52) | Larger reductions in import volumes (F14) |