Why Trump shot the sheriffs: The end of WTO dispute settlement 1.0

Chad P. Bown (PIIE) and Soumaya Keynes (The Economist)

Working Paper
20-4
March 2020
Photo Credit: 
REUTERS/Denis Balibouse

On December 10, 2019, the World Trade Organization’s (WTO) 25-year-old system of resolving disputes broke down. This paper explains why. It describes the dysfunctional system that preceded the WTO, when the United States dealt with politically troublesome imports by using voluntary export restraints and increasingly resorted to the “aggressively unilateral” Section 301 policy to resolve trade concerns. The WTO was a compromise between the rest of the world and the United States, whereby the latter accepted some constraints with the expectation that the new system of binding dispute settlement would serve its interests. But although the creation of the WTO resolved some concerns about American unilateralism in the short term, its system of handling disputes turned out to be politically unsustainable.

Data Disclosure: 

The data underlying this analysis are available here [zip].

More From

Chad P. Bown Senior Research Staff

More on This Topic

Trade and Investment Policy Watch

Chad P. Bown (PIIE) and Soumaya Keynes (The Economist)

March 4, 2020