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The Political and Economic Determinants of Trade Disputes under the WTO

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  • Fadiga, Mohamadou L.
  • Fadiga-Stewart, Leslie A.
Abstract
This study developed a conceptual analysis based on an asymmetric deterrence game with incomplete information to analyze how trade disputes arise between a given pair of WTO members. We found that the probability of trade dispute is an increasing function of the level of subsidies curtailments sought by the challenger. We hypothesized the challenger’s demand is determined by the political and economic profiles of the countries involved. An empirical investigation of the roles of these political and economic variables yielded mixed results, highlighting, in some cases, the preeminence of political or economic heterogeneity within dyads and, in other, that of homogeneity. These findings were attributed to the shifting paradigm in international trade with the emergence of economic powers such as China, India, Korea, and Brazil, to name a few, with political and economic profiles different from those of traditional major players such as the United States, the European Union, and Japan.

Suggested Citation

  • Fadiga, Mohamadou L. & Fadiga-Stewart, Leslie A., 2005. "The Political and Economic Determinants of Trade Disputes under the WTO," 2005 Annual meeting, July 24-27, Providence, RI 19483, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea05:19483
    DOI: 10.22004/ag.econ.19483
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    References listed on IDEAS

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    Cited by:

    1. Boza, Sofia & Fernandez, Felipe, 2015. "Is it only suitable for a few? WTO member participation in Specific Trade Concerns and Disputes on SPS/TBT according to their income levels," 2015 Conference, August 9-14, 2015, Milan, Italy 211368, International Association of Agricultural Economists.
    2. Boza, Sofía, 2016. "Determinants of SPS notification submissions for Latin American WTO members," Papers 970, World Trade Institute.
    3. Boza, Sofía & Fernández, Felipe, 2014. "Development level and WTO member participation in Specific Trade Concerns (STCs) and Disputes on SPS/TBT," Papers 946, World Trade Institute.

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