As international trade practices continue to develop, more than half of all international service trade has been digitised, with digital trade rules becoming a key factor affecting the development of global value chain (GVC) service trade. This study constructs the depth and scope indicators of digital trade rules included within preferential trade agreements (PTAs). We then investigate the role that digital trade rules play in promoting service trade along GVC using a gravity model framework. From our analysis, we find that both the depth and the scope indicators of digital trade rules have a significant promotional effect on GVC service exports, with the impact on GVC forward service exports being greater than the impact that was felt on GVC backward service exports. We also find that the GVC trade promotion effect is affected by income level, types of PTAs and the differences in regulatory quality that exist between countries. Finally, by developing a dynamic model that includes a set of leads and lags for digital trade rules' variables, we find that the impact of digital trade rules on GVC trade in services has both an anticipation and phasing‐in effect.

The WTO dispute settlement mechanism (DSM) is now facing a crisis of paralysis. Given such a challenging environment, this study examines factors affecting the participation of the WTO DSM by using bilateral data of WTO members from 1995 to 2017. Moreover, we provide a comparative analysis of the factors affecting the filing of cases at the WTO DSM between developed and developing countries across this period. By conducting the rare-event logistic regression method, we find that the export intensity, retaliation capability, economic power and economic threat are the main factors determining the initiation of trade disputes by WTO members. Moreover, the results from seemingly unrelated regressions suggest that economic power, proxied by the complainant country’s gross national income, is not a vital issue of importance that developed countries need to consider when deciding to initiate trade disputes; however, in contrast, developing countries still see it as an important factor affecting the use of DSMs, especially when the target countries are developed countries. Nonetheless, it is worth noting that in the later stage of the WTO, the impact of economic power no longer has any differential influence. On balance, these results reflect the efforts of the WTO to build a fair and rule-based DSM while also highlighting the urgent practical significance of maintaining a solid and effective mechanism for handling international trade disputes.