Why Adjudicate? Enforcing Trade Rules in the WTO

Why Adjudicate? Enforcing Trade Rules in the WTO

Why Adjudicate? Enforcing Trade Rules in the WTO

Why Adjudicate? Enforcing Trade Rules in the WTO


The World Trade Organization (WTO) oversees the negotiation and enforcement of formal rules governing international trade. Why do countries choose to adjudicate their trade disputes in the WTO rather than settling their differences on their own? In Why Adjudicate?, Christina Davis investigates the domestic politics behind the filing of WTO complaints and reveals why formal dispute settlement creates better outcomes for governments and their citizens.

Davis demonstrates that industry lobbying, legislative demands, and international politics influence which countries and cases appear before the WTO. Democratic checks and balances bias the trade policy process toward public lawsuits and away from informal settlements. Trade officials use legal complaints to manage domestic politics and defend trade interests. WTO dispute settlement enables states and domestic groups to signal resolve more effectively, thereby enhancing the information available to policymakers and reducing the risk of a trade war. Davis establishes her argument with data on trade disputes and landmark cases, including the Boeing-Airbus controversy over aircraft subsidies, disagreement over Chinese intellectual property rights, and Japan's repeated challenges of U. S. steel industry protection. In her analysis of foreign trade barriers against U. S. exports, Davis explains why the United States gains better outcomes for cases taken to formal dispute settlement than for those negotiated. Case studies of Peru and Vietnam show that legal action can also benefit developing countries.


Why do states turn to international courts to resolve their disputes? Liberal protesters on the streets condemn international organizations as servants of corporate interests, while conservative skeptics of international law reject intervention into state decision making by international bureaucrats. Governments of both large and small states have reason to avoid courts. Powerful states like the United States and eu have tools for leverage in bilateral negotiations. Whether offering side payments or threatening unilateral sanctions, they can influence the behavior of smaller states without need for a third party. At the same time, small developing countries fear legalization will merely introduce another tool where they lack capacity and cannot defend their interests. It is not as if filing a lawsuit mobilizes a police force. For all of their “courtlike” appearance, international courts are fundamentally different from domestic courts because they lack the authority to impose their rulings in an anarchic international system. Moreover, using courts is costly. Hiring lawyers, preparing formal briefs, and taking a dispute into the public arena cost time and money and also risk injuring diplomatic relations. Nonetheless, we observe a clear trend toward legalization as more areas of international affairs are regulated by international law, and the number and authority of international courts have grown. States are increasingly turning to courts to solve disputes.

They do so in order to achieve better outcomes. the choice of adjudication represents a shift in process—not abdication of sovereignty. Governments negotiate international rules and decide when and how to enforce them. Often states retain gatekeeper status over which legal complaints are filed. They have discretion over whether to comply with rulings issued against them by international judges. Governments give up some control when they enter formal dispute settlement and open themselves to third-party involvement, but this sacrifice of autonomy comes as a deliberate choice.

Understanding the decision to use legal enforcement is critical for evaluating how international institutions shape state behavior. The

the literature interchangeably uses the terms litigation and adjudication. Following Abbott et al. (2000) and Trachtman (1999) I will generally use the term adjudication.

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