SIGNIFICANT CONTRIBUTIONS OF THE GATT AND THE WORLD TRADE ORGANIZATION TO THE SETTLEMENT OF INTERNATIONAL ECONOMIC DISPUTES
SIGNIFICANT CONTRIBUTIONS OF THE GATT AND THE WORLD TRADE ORGANIZATION TO THE SETTLEMENT OF INTERNATIONAL ECONOMIC DISPUTES

Summary/Abstract: This study examines the role of the degree of legal controversy with respect to a panel ruling in determining the countries’ tendency to block/appeal a panel report. It shows that, under both the GATT and WTO regimes, there is an asymmetric advantage between the plaintiff and the defendant. The plaintiff’s potential benefit of blocking/appealing an adverse panel ruling is smaller than the that of the defendant, but it bears the same cost structure as the latter. This disadvantage to the plaintiff is diminished under the WTO procedure compared to the GATT, though it is not completely eliminated. The study also shows that the level of legal controversy over panel rulings increases, in general, proportionate to the increase in the frequency at which panel reports are blocked under the GATT regime. However, the tendency to appeal a panel report under the new WTO procedure is, basically, higher than the tendency to block a panel report under the GATT, when such reviews in appeal were not available.

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