Law&Economics Analysis Of WTO Disputes Caused By Technical Barrier To Trade

From the perspective of WTO development, barriers to trade have been an important topic concerned by members for a long period. During the past decades, the form of barriers to trade changed entirely. Non-tariff barrier to trade increased dramatically since GATT. As a significant non-tariff barrier to trade, technical barrier to trade (TBT) is frequently used by member because of its concealment, diversity and complexity. In order to ensure the TBT policies of members will not exceed the necessary limitation, WTO members signed the <Agreement on TBT of WTO> to regulate the regulations, standards and the assessment process. Due to the continuous deepening of trade, members of WTO take full advantage of free trade, they also pay more attention to the development of domestic industry. For those reasons, protectionism comes back. Developed countries refuse to equally share the benefits with developing countries, while developing countries have been trying to break the world market controlled by developed countries. Under this circumstance, TBT has been abused to some extent, which caused some disputes between WTO members.At the first part of this paper, the forming reason of TBT and economic theories inside will be analyzed, as well as those disputes caused by TBT. With regard to the nature of TBT, two sides will be mentioned to understand this topic. One of them is for protecting the national security, environment and human health and the other is a kind of trade protectionism. When analyzing the reasons, market failure theory can be regarded as the fundamental one. As a participant in market, government has its own benefit, which directly causes TBT regulations. Complexity and concealment can help understand why TBT is chosen to be the alternative trade barriers when tariff barriers are forbidden to use. The data of TBT disputes demonstrates that developed countries still take the advantage in this area, also developing countries desire for more benefit.In order to analyze the solving process of TBT disputes,'game theory' can be referred to explain the cost and benefit of both parts. During the process of disputes settlement, cost and benefit of each participant is not equal to the other. In this paper, this phenomenon will be analyzed by disequilibrium model. At the meantime, the cost/benefit of time can be another important factor due to the dispute settlement system of WTO. However, different participants have various altitudes towards time benefit. Those hypothesis and theories can be proved by analyzing the appealing data of WTO disputes settlement.From the current situation, even WTO members can choose the proper strategy by using economic hypothesis and theories, they still need to care about the degree of dependency. The most obvious comparison is between developed countries and developing countries. They have different tendency caused by different product substitutability related to the factors including economic power, trade status and historical reason. With regards to the TBT Agreement of WTO, the articles related to "reasonable period" and "trade retaliation measures" didn't work as expected is a real case of this argument. The performance of these articles also can be explained by economic conception-welfare level. In this paper, real cases between developed countries and developing countries will be used to testify this phenomenon. For explaining the formalized protection towards developing countries, this paper will focus on the "clove cigarette" between US and Indonesia.At last, based on those analysis above, this paper gives several reasonable suggestions about China's strategy on TBT disputes settlement and TBT regulations. China's trade status has been affected by TBT in a high degree compared to other trade barriers, which constitutes material obstacle to the relevant industries. Gap in TBT regulations between China and developing countries is obvious, thus improving the formulation level is important to China in order to protect trade development. Meanwhile, when dealing with TBT disputes, China needs to take both of the economic factors and non-economic factors into account. In the long term, China has to be the leader in protecting trade benefit of developing countries by using "herd effect" in order to raise the value of voice.