Mapping the Scope of Dispute Settlement in Regional Trade Agreements: Implications for the Multilateral Governance of Trade

Abstract

This article argues that the inclusion of provisions for the settlement of disputes in regional trade agreements enhances, rather than disrupts, the centrality of the World Trade Organization's dispute settlement system. Using a dataset that organizes exclusion clauses and special provisions for dispute settlement in regional trade agreements, the study develops a thematic typology that is used to examine the ways that disputes may be channelled between regional and multilateral dispute settlement institutions. This comparative empirical dimension offers a more accurate picture of the global contours of regionalization as they relate to the juridical aspects of trade governance, suggesting that the decentralization of dispute settlement inferred by the rapid development of regional bodies has been overstated.

The WTO in an Era of Preferential Trade Agreements: Thick and Thin Institutions in Global Trade Governance

“…Further reasons for choosing WTO over PTA DSM may range from ‘the cost–benefit analysis which is carried out in terms of economic as well as political costs, to the efficacy of a specific DSM’ and ‘the legitimacy of a mechanism’ (Marceau, 2015: 13). Analyzing dispute settlement exclusion clauses and special procedures across 258 active PTAs notified to the WTO by September 2014, Marc Froese (2016) finds that PTAs typically exclude areas such as competition policy and labor and environmental standards from their dispute settlement clauses and revert back to the multilateral system in behind-the-border areas, notable Sanitary and Phytosanitary Measures (SPS), Technical Barriers to Trade (TBT), and trade defense. Therefore, PTA ‘dispute settlement … does not deepen the juridical reach of trade disciplines as much as might first be surmised’ (Froese, 2016, forthcoming).…”

“…This in turn precludes the use of creative ambiguity in multilateral trade talks, which has been a tried and tested negotiating technique in previous rounds. As Marc Froese (2016) finds, many contentious areas in PTAs are in effect excluded from dispute settlement. PTAs could constitute the privileged forum for trade negotiations for some time to come, precisely because they offer the possibility of excluding areas from dispute settlement, and, as the previous section showed, their dispute settlement mechanisms are more diplomatic in character.…”

“…From this theoretical vantage point, the inability to conclude the Doha Round is often seen as compelling evidence for the decline of trade multilateralism. Some scholars have begun challenging this assessment, for example by placing trade multilateralism in a longer historical perspective (Muzaka and Bishop, 2015), or by examining how disputes are channeled from preferential deals to the multilateral level (Froese, 2016). This article joins this growing body of literature by supplementing theoretical insights with an analysis of the views of trade policy communities in core WTO members.…”