How are the precedents of trade policy rules made under the World Trade Organization?

Abstract

AbstractUnder World Trade Organization (WTO) dispute settlement, consistent trade policy rules are established through precedents. This study examines how these precedents are created by citations, including how the kinds of cases involved in previous decisions affect the citation frequency. We investigate three determinants of citation, namely, legal, economic, and political factors. The empirical analysis shows that cases having the following characteristics are more frequently cited: violations of WTO rules found, many claims of WTO rule violations, many third‐party participants, and a heightened capacity of complainant country retaliation. These suggest that the case law on trade policy is not only generated through legal considerations but also reflects economically and politically sensitive cases, which the WTO may tend to follow in line with its previous decisions.