An International Trade Disputes Analysis using Network Theory

Abstract

Abstract International trade is an important pillar of the modern economy. Beyond its benefits, the global market generates divergencies among trade partners that can be escalated into trade disputes. Notable interest has arisen in using network analysis to formally describe interactions with concepts derived from the graph theory. As we have noticed a less explored area on the graphical representation of trade dispute data, the purpose of this paper is to build, visualize, and analyze the trade disputes as a weighted network. We use data about trade disputes provided by the Word Trade Organization from 1995 to 31 January 2022 as this is a major regulatory body within the multilateral trading system. Our aim is to address the question on which countries are using the most the dispute settlement mechanism. Based on the association complainant – respondent, we map these interactions to obtain a weighted network that includes 75 countries, 247 unidirectional country pairs and 652 trade disputes. The results indicate the dominance of the United States as the main hub followed by the European Union and a core-periphery structure of the trade dispute network with less participation from smaller countries. Our study is a general assessment of trade disputes which contributes to identifying patterns on the positional changes of countries and their involvement as complainant and respondent respectively in international dispute settlement.