infonet-economy

Theoretical analyses of the WTO dispute settlement mechanism suggest that the system contains only weak incentives for the implementation of rulings. Against this background, it is puzzling that the specific WTO procedure which deals with allegedly insufficient implementation is used only in about one third of the cases where the need for implementation has arisen. Yet, a closer look at the «Periodicals Case» where implementation has allegedly occurred can partly resolve this puzzle: The defendant government implemented the rulings by modifying or repealing the contemplated measures. At the same time, however, it resorted to alternative measures in order to keep the market closed. Some market opening occurred only after the conclusion of the multilateral procedure within bilateral negotiations and in areas which have not been subject to the multilateral dispute. This leads to the hypothesis that the role of the multilateral dispute settlement system could be less important than is generally accepted today. Keywords: Protectionism, WTO, Dispute Settlement, Implementation JEL Code: F13 (pdf, 235)