Chad Brown and Kara Reynolds have released an interesting study on the trade stakes (dollar value) under the WTO dispute settlement system. (“WTO trade disputes, big and small”). While their data confirms, intuitively, that WTO members are likely to litigate on big ticket items, such as the Boeing-Airbus dispute, the data also demonstrate, rather counterintuitively, that WTO members also litigate on such trades (exports/imports) of lot less dollar amounts. According to them, “roughly 14% of the caseload involves trade in disputed products of less than $1 million per year.”
Another interesting observation on the litigation “cost.”
The start-up cost of using the private sector to litigate even a relatively simple dispute through to a legal decision is estimated to range from $250,000 to $750,000, depending on the law firm involved. Nevertheless, some subsidised legal assistance is available, including through the highly utilised Advisory Centre on WTO Law. The WTO system’s chief publicly subsidised legal assistance program estimates charges to middle income developing country members at roughly $200,000 for the provision of work up to a legal decision (ACWL 2007), and progressively lower fees are available for poorer countries.
Finally, here goes their conclusion.
And clearly the trade that is directly at stake is only the tip of the dispute settlement iceberg. Jurisprudence resulting from these cases is likely to have an even longer reach via the ‘shadow of the law’ extending the indirect impact of WTO dispute settlement to hundreds of billions of dollars in trade each year.
What do you think are real driving forces behind WTO members’ decision to litigate? Economic, political and/or something else?
