Dispute settlement in preferential trade agreements and the WTO: A network analysis of idleness and choice of forum

Abstract

It is generally presumed that World Trade Organization (WTO) members display a preference for dispute settlement under WTO rules over those provided for in preferential trade agreements (PTAs). This assumption is driven by observations relating to the large number of PTAs, the low number of PTA cases and the large number of WTO cases, including between PTA partners. These observations are challenged by adopting a methodology that has so far seen relatively limited use in the study of international law network analysis. This article finds, first, the network of connections among WTO members formed by PTAs is far less dense than appears to have been assumed. Second, while almost half of all WTO members have participated in WTO proceedings at least once, the vast majority of bilateral relations among WTO members have never been subject to WTO dispute settlement. This puts the perceived idleness of PTA dispute settlement into perspective. Lastly, the share of WTO cases that could have been settled under PTA procedures is far lower than commonly believed. This low share shows that there is no widespread predilection for the WTO, as commonly argued, but, more often than not, a genuine absence of choice. Ultimately, as the PTA network is unable to act as a substitute, WTO dispute settlement continues to hold a central place in the rules-based global trading system.