Multinational Firms, Value Chains, and Trade Disputes: Explaining Dispute Onset at the World Trade Organization

Content Provider	Scilit
Author	Yildirim, Aydin Poletti, Arlo Chatagnier, Tyson Biivre, Dirk De
Copyright Year	2018
Description	Journal: SSRN Electronic Journal In this paper we aim to explain World Trade Organization (WTO) members’ decision to initiate a dispute at the WTO. Since many potential violations of WTO law remain unchallenged, we explore the conditions under which WTO members complain about only some allegedly WTO-incompatible policies, while leaving a large majority of them unchallenged. While there may be different reasons why governments choose to initiate certain disputes, we are especially interested in the relationship between potential and actual trade disputes on the one hand and the degree of integration into so-called global value chains (GVCs) on the other. We demonstrate that decision-makers are more likely to try and eliminate barriers to cross-border trade by tabling WTO complaints when facing pressures to do so by firms and sectors highly integrated into such GVCs. Potential complainants’ policymakers act strategically when considering whether to initiate a formal dispute. Responding to demands of firms and sectors that are highly integrated in GVCs allows complainants’ policymakers to secure the support of politically powerful domestic constituencies while simultaneously minimizing the administrative burdens and the potential negative externalities for bilateral diplomatic relations that a WTO dispute can bring about. We test our hypothesis by examining data from the US using a binomial logistic regression and Cox proportional hazard model and find that trade barriers are both more likely to be filed as disputes and quicker in being tabled at the WTO in sectors highly integrated into GVCs, while controlling for other factors.
Related Links	http://cadmus.eui.eu//bitstream/1814/53824/1/RSCAS_2018_21.pdf https://papers.ssrn.com/sol3/Delivery.cfm?abstractid=3169877
ISSN	10914358
e-ISSN	15565068
DOI	10.2139/ssrn.3169877
Journal	SSRN Electronic Journal
Language	English
Publisher	Elsevier BV
Publisher Date	2018-04-01
Access Restriction	Open
Subject Keyword	Journal: SSRN Electronic Journal Political Science World Trade Organization Global Value Chains Dispute Initiation Multinational Firms
Content Type	Text
Resource Type	Article
Subject	Public Health, Environmental and Occupational Health Psychiatry and Mental Health