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Game Analysis And Strategies For Settlement Of Trade Disputes

Posted on:2007-10-03Degree:DoctorType:Dissertation
Country:ChinaCandidate:S H YangFull Text:PDF
GTID:1119360242459382Subject:International trade
Abstract/Summary:PDF Full Text Request
Based on the running system and the statistical analysis of GATT/WTO dispute settlement mechanism, this paper first create a fully seven stages game theorical model according to the WTO dispute settlement process, and present the strategies choice condition of the players in each stage, which obtains 16 propositions. The results of the paper shows that, in the consultation stage, the complainant cannot choose the strategy of withdrawing a suit, and achieving the consultation solution will be much more possible; and in the panel stage, the complainant will propose as soon as possible the request of establishing the panel and hope to get their results. As for the appeal stage, if the defendant's domestic political support benefit of the interest group is much bigger than its appeal cost, the lost defendant will immediately select the appeal strategy, but the probability of the appeal of the losting complainant will be strictly smaller than that of the defendant appeals. In the implementation stage, if the defendant does not carry out the findings of the WTO panel or the appeal body, the complainant will propose the authorized retaliation request immediately to the WTO dispute settlement body, when the complainant's political retaliatory capability is stronger than its economic retaliatory capability, both sides just can in this stage achieve compensation agreement. In the retaliation request stage, the complainant will choose the strategy of retaliation request immediately; and in retaliation implementation stage, if the complainant has the super power of political retaliatory capability or the cost of the defendant carrying out the WTO decision is very low, or the bilateral coordination cost seems very high, the defendant will choose immediately the strategy of implementing the WTO decision. When the complainant's political retaliatory capability is insufficiently strong and the cost of the defendant's implementing the WTO decision is insufficiently high, the defendant will choose the strategy of not carrying out the WTO decision.After WTO authorize the retaliation, this paper theories analyze exploring how to implement the retaliation, define the economic retaliatory capability of country and the political retaliatory capability of country, and combine into the model, discuss the influence of complainant's economic retaliatory capability and the political retaliatory capability to dispute numbers strategic choose, give out the graphical solutions, and put out the principle of retaliatory list choosing and anti-retaliatory strategy reaction.According to the WTO 335 dispute cases in 1995-2005, we first carry on empirical analysis from the aspect of the strategy choice, the opportunity choice, the solution efficiency and the Herd behavior, which indicates that the strategy choice in the aggregate sample is consistent with the theoretical analysis. The agreement involved in dispute settlement is mainly about the General Agreement on Tariffs and Trade, anti-dumping agreement, the agricultural agreement, the subsidy and countervailing measure agreement, the import . permission procedure agreement, the technical trade barrier agreement, the safeguard measure agreement and so on. And the product involved is mainly about the agricultural products, the base metals and articles of base metal, the associated transport equipment, Textiles and Textile Articles, and the chemical products. As for the countries, the developed countries (especially for US & EU) are the main dispute complainants and defendants, and the developing countries increasingly become the active complainants in the latest 6 years, but the status being sued for developing countries has a drop trend. Actually, the efficiency of the WTO dispute settlement is not so high, except in the panel report and the appeal body report issuing, circulating and submitting DSB(Dispute Settlement Body) those stages, in which the basic even strictly execution has carried out in the related time limit stipulated by WTO, other stages always have surpassed the corresponding time WTO stipulated. The disputes involved more than one complainant basically all carry on the case to the final retaliation implementation stage, which indicates that appealing together has the merits of sharing the appeal cost, being advantageous to strength the weak and small countries' union retaliation, reducing the degree of asymmetrical information for the complainant. The Herd behavior in dispute settlement seems have the equally good results from different methods to be wonderful with the together-complaint above mentioned. In addition, the probability of choosing the consultation solution strategy in the consultation stage is much lower for the dispute side with higher economical level (with a high probability of choosing panel strategy). When the finding of panel report supports the complainant, the probability of defendant's choosing appealing strategy is proportional to the economical level of the complainant. When the defendant appeals and the appeal body still supports the complainant, the strategy of the defendant will be different from different economical level. From the aspect of countries, there is a big difference between the strategies chose by countries. The results also shows that the panel report supports the complainant in a very high probability, and the appeal body reverses the panel report in a very small probability. The analysis on the anti-dumping disputes and the safeguard measure disputes, shows that US breaks anti-dumping agreement most frequently, moreover does not carry out the WTO decision most seriously. The condition of the implementation of safeguard measure is very strict, so the panel reports all support the complainant without one exception in such cases. And US illegally applies the safeguard measure to be also the most, the majority of which are always settled by the defendant carrying out the WTO decision.Then, we choose two typical dispute cases ("Continued Dumping and Subsidy Offset Act of 2000" and "Definitive Safeguard Measures on Imports of Certain Steel Products"), and from the microscopic aspect analyze the strategy choice of both sides and its reason. The Byrd amendment and the American steel safeguard measure dispute are the typical cases that US makes the use of the weakness of WTO dispute settlement to provide the protection for its domestic enterprises, regardless of the WTO anti-dumping agreement, the subsidy and countervailing measure agreement and the safeguard measure agreement. The custom duty level of the country applying the safeguard measure is decided by the lobby ability of its domestic industrial field. The stronger its lobby ability, the stronger the motive of applying safeguard measure, and customs duty level higher. At the same time, once the target country has the cost advantage, the applying safeguard measure motive stronger, the protection level is higher. The country applying safeguard measure on the trade policy orientation of maximizing industrial benefit is easier to encounter the target country's anti-retaliation than that on the trade policy orientation of maximizing national welfare, also the anti-retaliation custom duty level is much higher. The anti-retaliation country's anti-retaliation product depends on the trade symmetry or the relative market capacity. If the anti-retaliation custom duty is in certain scope, then the anti-retaliation custom duty level has the inverse ratio with the anti-retaliation product market capacity, and has the direct ratio with the domestic market capacity of the country applying safeguard measure. When the country applies safeguard measure but loses the lawsuit, the motive of the target country that carries on the trade anti-retaliation to the applying country has the direct ratio with the applying motive of the applying country, that is, the safeguard measure has the symmetry with the anti-retaliation.According to the agreement related in WTO dispute settlement and the trade frictions as well as the dispute form our country confronts with, we have the selective key point to analyze the problem of trade dispute game aroused by the "transitional provision" of China's entry in WTO (especially for the "non-market economy" in antidumping agreement and special safeguard measure). We also analyze the origin of "the non-market economy", its development and the reason, as well as the game strategy, and propose our country's policies choose. Compared with the difference between special safeguard measure and the safeguard measure, we establish a dynamic game theory model for the special safeguard measure, and present the strategy solution, also have carried on the comparison with the safeguard measure game strategy, which proves that the motive of applying special safeguard measure is much stronger than that of safeguard measure. As a result of our country's pledge, according to "Protocol on the Accession of the People's Republic of China", the foreign country could apply special safeguard measure and not cite to WTO dispute settlement, and China can only choose the consultation solution strategy. Thus, this paper also propose seven concrete Countermeasures that China confronts with the safeguard measure and the special one, which have the reference value for practice.In the above analysis foundation, we finally propose the guiding ideology——"to strengthen the consultation with dispute member, to response legally, to cite cautiously, to settle with different strategies, to control situation, to have some achievement." The principle of China's strategies choice are: when our country is appealed, the best strategy should be "prior to choose panel or appeal body, then consider the strategies of consultation with dispute member and the mutually settlement", and seek the most favorable outcome; when we appeal others, the strategy we insist on should be "prior to choose the consultation solution, then consider panel or appeal body; mutual settlement should be primary, and the retaliation request should be auxiliary", and make sure to get the rapid also effective outcome. At the same time, this paper also presents the principle of strategy time selection. Finally, we propose 5 concrete Countermeasures to enhance our country's capacity to solve dispute settlement, which have the important reference value when the Commercial Ministry of China as well as the government and the enterprises handle with the trade friction and the dispute settlement.
Keywords/Search Tags:Dispute Settlement Mechanism, Game, Strategy, Retaliation
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