The WTO Secretariat and the Role of Economics in DSU Panels and Arbitrations

Abstract

The WTO faces an increasing burden of arbitrating trade disputes between WTO member states. The disputes are economically complex and often lead to rulings that require changes in Members' economic policies. This paper provides a positive and normative analysis of a previously unaddressed question: What roles do economic analysis and economists play in WTO adjudication under the Dispute Settlement Understanding (DSU)? We identify a number of problems with the current Secretariat provision of technical economic support to panellists and arbitrators as well as the sources of these problemsincluding the small number of professional economists in the Secretariat, the lack of diversity to their fields of specialization, and the ad hoc manner in which they have been integrated into the DSU adjudication process thus far. We also point the Secretariat to useful lessons on transparency and political independence learned from other institutionse.g., central banks, competition authorities, and national trade remedy investigating agencies -that affect economic policy in similar politically sensitive environments. Finally, given a new mandate from WTO Members that DSU adjudicators have access to more sophisticated technical economic support and expertise, we make a number of proposals for reform. ________________

The WTO at 20: an economist’s perspective

“…The AB would have also benefitted by embracing economics in the matter of zeroing. Zeroing has been the single-most litigated issue at the AB despite the fact that the AB has repeatedly found that the practice violates the WTO Antidumping Agreement (ADA) [4]. The Panel's and AB's long and tortured history with zeroing is at least partly due to poorly constructed reasoning in early cases -logic that would have been more clear with a deeper user of economic analysis.…”