Discussion

Rossmiller, George E.

doi:10.4324/9780429039867-17

Cited by 2 publications

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“…-Busch and Reinhardt (2000) observes that, during the GATT period, only two-fifths of the rulings in favor of the complainant resulted in full compliance by the defendant-whereas in nearly a third of the cases, defendants failed to comply at all. Even though the establishment of the WTO dispute settlement mechanism improved the situation, as Rossmiller (1994) pointed out, the WTO remains a "court with no bailiff." These observations prompt the following question: can a multilateral institution influence coercion outcomes despite its lack of enforcement power?…”

Section: Unilateral Versus Multilateral Coercion: the Influence Of Inmentioning

confidence: 99%

Coercive Trade Policy

Anesi

Facchini

2019

American Economic Journal: Microeconomics

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Coercion is used by one government (the "sender") to influence the trade practices of another (the "target"). We build a two-country trade model in which coercion can be exercised unilaterally or channeled through a "weak" international organization without enforcement powers. We show that unilateral coercion may be ineffective because signaling incentives lead the sender to demand a concession so substantial to make it unacceptable to the target. If the sender can instead commit to the international organization's dispute settlement mechanism, then compliance is more likely because the latter places a cap on the sender's incentives to signal its resolve. (JEL D74, D82, F12, F53) 1 A typical example was Section 301 of the 1974 US Trade Act, which allowed the United States to impose unilateral sanctions on countries whose trade practices were found to be unfair to US interests. This clause was invoked in several occasions-for instance, in the much publicized dispute with Japan over automobiles in 1995, in which the United States essentially bypassed the WTO and imposed sanctions unilaterally (e.g., Puckett and Reynolds 1996, Schoppa 1999). 2 The WTO Dispute Settlement Mechanism is the leading institution of this kind, and since its inception, it has handled hundreds of cases. Several preferential trade agreements also include similar institutions.

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Section: Unilateral Versus Multilateral Coercion: the Influence Of Inmentioning

confidence: 99%