The Design Of Dispute Settlement Procedures In International Agreements

261. Department of Foreign Affairs and Trade of Australia, Why did the Australian Government negotiate a Comprehensive Economic Partnership Agreement with Indonesia?, online: DFAT . 264th Department of Foreign Affairs and Trade Australia, « Indonesia-Australia Comprehensive Partnership Agreement, Outcome: Skills Development » (updated June 27, 2019), online: DFAT . Formal economic analysis of trade agreements generally treats disputes as synonymous with concerns about their application. But in reality, most WTO disputes involve differences of opinion on the interpretation of the agreement or in cases where the agreement simply remains silent. And some have suggested that the WTO`s Dispute Settlement Body (DSB) can fulfill a useful objective by granting, in certain circumstances, « waivers » to rigid contractual obligations. In each of these three cases, the role of the DSB is to « complete » different dimensions of an incomplete contract. In addition, there is a debate among lawyers as to whether or not the precedents in the DSB judgments can improve the performance of the institution. All of this points to the importance of understanding the implications of different possible degrees of activism in the role of the DSB.

In this paper, we provide a formal analysis of this broad issue. We characterize the choice of the contractual form and the role of the DSB, which is optimal for governments under different contractual conditions. A new feature of our approach is that it emphasizes the interaction between the design of the treaty and the organization of dispute settlement procedure and considers the latter as two components of a single global institutional problem. 64. The World Trade Organization, « Historical Developments in the WTO Dispute Settlement System », online: WTO [WTO 2]. 208. ASEAN Protocol on an Enhanced Dispute Settlement Mechanism, 29 November 2004 (entered into force on 29 November 2004), online: ASEAN . . Your email address is used to inform you if your comment has been verified by the moderator and if the author or moderator should contact you directly. 95. See, for example, BOWN, Chad P., « On the Economic Success of GATT/WTO Dispute Settlement » (2004) 86 Review of Economics and Statistics 811CrossRefGoogle Scholar at 811.

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