NCCR - Implementing WTO Rules through Negotiations and Sanctions

Abstract

Based on economic and legal perspectives, the current paper aims to analyze how the World Trade Organization combines negotiations and sanctions to ensure the implementation of its law. While the Trade Policy Review mechanism at the WTO deals with the WTO-compatibility of the trade policy of a particular member in question, the prevalence of such policies can be successfully challenged at the Dispute Settlement Body which makes decisions on trade disputes between governments that are adjudicated by the WTO. The TPR can play a major role in this framework, providing developing and less-developed countries valuable input on the WTO-compatibility of their trade partners. The current paper intends to analyze whether any relationship exists between TPR findings and the outcome of cases lodged at the DSB. To do that, this analysis uses an empirical method involving five countries. Our sample consists of two developing countries (Brazil and India) and three developed countries (the European Community, Japan, and the United States). The paper shows that many issues raised by the TPRs of selected members have been successfully challenged at the WTO, as a result of which areas of concern have been rectified in the subsequent period. The paper concludes that while the WTO is clearly able to ensure a satisfactory enforcement of its laws in national legal orders and to influence national trade policies, the system still needs some improvement.

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