Remedies in the WTO legal system: between a rock and a hard place

Abstract

There is a considerable discrepancy in legal and economics scholarship as to the effectiveness of the new WTO dispute settlement system. The former usually suffers from selection bias that is not predicated on any empirical analysis. Bob Hudec produced a remarkable empirical account of how the GATT dispute settlement fared, but no corresponding study with respect to WTO has so far taken place. Maybe it is still too soon. The recent avalanche of compliance panels though, has cast considerable doubt on the initially celebrated effectiveness of the system. This paper is not the equivalent to Hudec’s study for the WTO. It uses representative case law from the WTO to make the point that the effectiveness of the WTO remedies depends on the relative ‘persuasive’ power of the WTO member threatening with countermeasures.