1 Introduction

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1 Introduction Notes 1 Introduction 1. According to the WTO agreements, non-market economies refer to economies “where the government has a complete or substantially complete monopoly of its trade and where all domestic prices are fixed by the state.” For more discussion on the NME rules, see “Background: Rise of Export Barriers,” in Chapter 5. 2. Legalization is indicated by three components: “the degree to which rules are obligatory, the precision of those rules, and the delegation of some func- tions of interpretation, monitoring, and implementation to a third party.” See Kenneth W. Abbott and Duncan Snidal, “The Concept of Legalization” in Judith L. Goldstein, Miles Kahler, Robert O. Keohane and Anne-Marie Slaughter, eds, Legalization and World Politics (Cambridge, Massachusetts, 2001: The MIT Press), pp. 37–72. 3. The WTO dispute settlement system is not an enforcement body. The mem- bers have to rely on self-enforcement in complying with WTO rulings. However, it has been proven that nations take them into account more frequently when enacting, implementing, and interpreting domestic laws and regulations. See Paul B. Stephen, “American Hegemony and Interna- tional Law: Sheriff or Prisoner? The United States and the World Trade Organization,” Chicago Journal of International Law 1 (2000, spring): 49–74. 4. Robert Hudec, “Transcending the Ostensible: Some Reflections on the Nature of Litigation between Governments,” Minnesota Law Review 72 (1987): 224. 5. Robert Hudec, “The New WTO Dispute Settlement Procedure: An Overview of the First Three Years,” Minnesota Journal of Foreign Trade 8, no. 1 (1999): 8. 6. Alan O. Sykes, “The Remedy for Breach of Obligations under the WTO Dis- pute Settlement Understanding: Damages or Specific Performance?” M. Bronckers and R. Quick, eds., New Directions in International Economic Law: Essays in Honour of John H. Jackson. The Hague: Kluwer Law International, p. 352. 7. Hudec, “The New WTO Dispute Settlement Procedure: An Overview of the First Three Years,” p. 1. 8. Wilfred J. Ethier, Punishments and Dispute Settlement in Trade Agreements, Economic Policy Research Unit (EPRU) Discussion Paper No. 2001–14, Uni- versity of Copenhagen, 2001; Christina R. Sevilla, Explaining Patterns of GATT/WTO Trade Complaints, Working Paper 98/1, Weatherhead Center for International Affairs, Harvard University, 1998. Christina R. Sevilla, A Polit- ical Economy Model of GATT/WTO Trade Complaints, Jean Monnet Working Paper No. 5/97, New York University School of Law, 1997. Giovanni Maggi, “The Role of Multilateral Institutions in International Trade Co-operation,” American Economic Review 89, no. 1 (1999): 190–214. Kyle Bagwell and Robert W. Staiger, “An Economic Theory of GATT,” American Economic Review 89, no. 1 (1999): 215–248. 120 Notes 121 9. The World Trade Organization, Current Status of Disputes, http://www .wto.org/english/tratop_e/dispu_e/dispu_current_status_e.htm. Retrieved on 14 April 2013. 10. Keisuke Iida, “Is WTO Dispute Settlement Effective?” Global Governance 10 (2004), 207–25. 11. According to the DSU timeline, it takes up to 26 months for a diligent complainant from the time of requesting consultation to obtain the removal of measures inconsistent with the WTO. In reality, this timeline is often exceeded. A survey on DSB cases from 1995 to 2004 found that the median time from the request for consultations to implementation was 34 months. For more information, see William J. Davey, “The WTO Dispute Settlement System: The First Ten Years,” Journal of Internal Economic Law (March 2005) 8 (1): 17–50. 12. Marc L. Busch and Eric Reinhardt, “Testing International Trade Law: Empir- ical Studies of GATT/WTO Dispute Settlement,” in Daniel M. Kennedy and D. James Southwick eds., The Political Economy of International Trade Law: Essays in Honor of Robert Hudec (New York: Cambridge University Press, 2002): 457–81. 13. Henrik Horn, Petros C. Mavroidis, and Håkan Nordstrom, “Is the Use of the WTO Dispute Settlement System Biased?” Economic Research and Analysis Division, WTO Centre for Economic Policy Research (1999); Joseph Francois, Henrik Horn, and Niklas Kaunitz, “Trading Profiles and Developing Country Participation in the WTO Dispute Settlement System,” IFN Working Paper No. 730, Research Institute of Industrial Economics (2008); Chad P. Bown, “Developing Countries as Plaintiffs and Defendants in GATT/WTO Trade Disputes,” The World Economy 27, no. 1 (2004): 59–80. 14. Chad P. Bown, “U.S.–China Trade Conflicts and the Future of the WTO,” The Fletcher Forum of World Trade 33, no. 1 (Winter/Spring 2009): 27–48; Mohammad Ali Taslim, “How the DSU Worked for Bangladesh: The First Least Developed Country to Bring a WTO Claim,” Gregory C. Shaffer and Ricardo Meléndez-Ortiz eds., Dispute Settlement at the WTO: The Developing Country Experience, Cambridge University Press (2012): 230–48. 15. Chad P. Bown, “The Economics of Trade Disputes, the GATT’s Article XXIII and the WTO Dispute Settlement Understanding,” Economics and Pol- itics 14, no. 3 (2002): 283–23; James Smith, “Inequality in International Trade? Developing Countries and Institutional Change in WTO Dispute Settlement,” Review of International Political Economy 11, no. 3 (August 2004): 542–73; Marc L. Busch and Eric Reinhardt, “Developing Countries and GATT/WTO Dispute Settlement,” Journal of World Trade 37 (2003): 719–35. 16. Bruce A. Blonigen and Chad P. Bown, “Antidumping and Retaliation Threats,” Working Paper 8576, National Bureau of Economic Research (2001); Chad P. Bown, Self-Enforcing Trade: Developing Countries and WTO Dis- pute Settlement (Washington, DC: Brookings Institute, 2006). 17. Chad P. Bown, “Participation in WTO Dispute Settlement: Complainants, Interested Parties and Free Riders,” World Bank Economic Review 19, no. 2 (2005): 287–310. 18. Valentina Delich, “Developing Countries and the WTO Dispute Settle- ment System,” in Bernard Hoekman, Aaditya Matoo, and Philip English 122 Notes eds., Development, Trade, and the WTO (Washington, DC: The World Bank, 2002): 71–80; Andrew Guzman and Beth Simmons, “To Settle or Empanel? An Empirical Analysis of Litigation and Settlement at the World Trade Organization,” Journal of Legal Studies 31 (2005): 205–35; Constantine Michalopoulos, Developing Countries in the WTO (New York: Palgrave, 2001); Marc L. Busch and Eric Reinhardt, “Testing International Trade Law: Empir- ical Studies of GATT/WTO Dispute Settlement,” in Daniel M. Kennedy and James D. Southwick eds., The Political Economy of International Trade Law: Essays in Honor of Robert Hudec (New York: Cambridge University Press, 2002): 457–81. 19. Christina L. Davis, Why Adjudicate? Enforcing Trade Rules in the WTO (Princeton: Princeton University Press, 2010), p. 69. 20. Marc Busch, “Democracy, Consultation, and the Paneling of Disputes under GATT,” Journal of Conflict Resolution 44, no. 4 (2000): 425–46; Peter Rosendorff, “Stability and Rigidity: Politics and Design of the WTO’s Dis- pute Settlement Procedure,” American Political Science Review 99, no. 3 (2005): 389–400; Eric Reinhardt, “Aggressive Multilateralism: The Determinants of GATT/WTO Dispute Initiation, 1948–1998,” Manuscript, Emory University, 2000. 21. Davis, Why Adjudicate? Enforcing Trade Rules in the WTO. 22. Davis, Why Adjudicate? Enforcing Trade Rules in the WTO: p.12. 23. Thomas Sattler and Thomas Bernauer, “Dispute Initiation in the World Trade Organization,” paper presented at the annual meeting of the International Political Economy Society (Stanford University, Palo Alto, California, 2007). 24. Davis, Why Adjudicate? Enforcing Trade Rules in the WTO. 25. From 1995 to 1998, Japan filed six complaints against the United States, Brazil, Indonesia, and Canada on issues including unilateral sanction mea- sures import duties. For the 15 years under the WTO (1995–2010), Japan filed 14 complaints against other countries whereas it only filed 12 over almost half a century under the GATT. 26. Miles Kahler, “Litigation as Strategy: The Asia-Pacific Case” and “Conclu- sion: The Causes and Consequences of Legalization,” in Goldstein, Kahler, Keohane and Slaughter, eds., Legalization and World Politics: pp. 277–300. 27. Saadia Pekkanen, Japan’s Aggressive Legalism: Law and Foreign Trade Politics Beyond the WTO (Palo Alto: Stanford University Press, 2008): pp. 28–31. 28. Peter Evans, Embedded Autonomy: States and Industrial Transformation. Princeton University Press, 1995. 29. See Chapter 6 for more discussion. 30. In this project, East Asia includes China, Japan, South Korea, Taiwan, and ASEAN states who are members of the WTO. 31. According to the WTO agreements, trade remedy measures include antidumping, countervailing, and safeguard measures. Antidumping mea- sures are measures that can be undertaken whenever the importing country confirms that dumping and material injury resulting from the goods under investigation has occurred. Countervailing measures are measures that can be undertaken whenever an investigation, by the investigating authority of the importing country, has led to the determination that the imported goods are benefited from subsidies and that they also result in material injury. Safe- guard means actions taken to protect a specific industry that is seriously Notes 123 injured by an unexpected build-up of imports. All three measures often take the form of duties or the price undertakings by the exporting firms or the authorities of the exporting country (in the case of countervailing measures). For more details, see the World Trade Organization, Antidumping, http:// www.wto.org/english/tratop_e/adp_e/adp_e.htm. Retrieved on 1 April 2011. 32. Dumping takes place when goods are exported at a price charged below one’s domestic market or below the cost of production. 33. The disputes of this kind are in part caused by the current WTO rules grant substantial degree of discretion to the importing countries to judge the act of dumping. For more details, see Thomas J. Prusa, “Anti-dumping: A Growing Problem in International Trade,” The World Economy, Vol. 28(5) (May 2005): 683–700. 34. Thomas J. Prusa, “On the Spread and Impact of Antidumping,” Canadian Journal of Economics, 34, no. 3 (2001): 591–611; Thomas J. Prusa, “East Asia’s Anti-Dumping Problem,” The World Economy 29, no.
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