In the APSA Public Scholarship Program, graduate students in political science produce summaries of new research in the American Political Science Review. This piece, written by Irem B. A. Örsel, covers the new article by Ryan Brutger, University of California, Berkeley, “Litigation for Sale: Private Firms and WTO Dispute Escalation.”
In a globally connected world, laws transcend local boundaries, becoming vital in international interactions, such as trade contacts. The World Trade Organization (WTO) regulates this intricate network of global trade relationships. The WTO also facilitates the resolution of trade disputes between countries, which resemble complex strategic games. But how do countries solve these disputes? Though the WTO is a state-centric institution, meaning only governments can initiate disputes, Brutger examines the multiple ways in which private firms affect the dispute escalation process and influence which trade barriers are challenged at the WTO in his recently published APSR article.
He examines this question by peeling back the layers of the international trade stage and revealing the important role of private firms, affecting WTO disputes through contributions to the litigation process as opposed to traditional lobbying. According to this article, private firms contribute to the dispute settlement process by sharing information and providing resources, which alleviates governments’ capacity constraint and helps governments assess the strength and value of potential disputes. In this study, Brutger explores this important matter through several primary points: whether private firms with advantageous information will inform governments about trade barriers; whether these firms’ litigation contributions lessen resource constraints; whether governments alter their perspectives when private firms’ contributions reach a certain threshold; whether trade barriers are more likely to be challenged in WTO disputes for larger firms with more money to fight in court; and whether specific types of trade barriers, like product-specific ones, are more susceptible to challenges at the WTO.
“With the careful use of data, the study demonstrates that firms’ litigation capacities and specific trade barriers significantly impact the escalation of WTO trade disputes.” The author validated his findings using two methods. Firstly, he interviewed 38 global trade experts, including international trade lawyers, legal advisors, and general counsels from various continents. These interviewees, experienced in international trade policy and disputes, represented a range of countries with diverse levels of WTO participation, enabling a comprehensive understanding of variations across different factors. The interviews underscored private firms’ pivotal role in dispute escalation, their ability to modify the dispute resolution process, and their contribution to resource constraints and governmental strategy adjustment based on the firms’ information. It is crucial to note the potential variance in interactions between politics and law across different cases, countries, and governance systems. In addition to these important insights from the interviews, the author uses data from Compustat and the Foreign Trade Barrier Dataset (FTBD). He examines the impacts of trade-barrier-specificity, the capacity of firms, the trade barrier distortion level, and other rival theories on the possibility of dispute initiation from possible WTO cases. These tests enable an analysis of firms’ effects on dispute initiations.
With the careful use of data, the study demonstrates that firms’ litigation capacities and specific trade barriers significantly impact the escalation of WTO trade disputes. Focusing on the United States, it critically examines the initiation and escalation of trade disputes, showing the significant effect of the specificity of the trade barrier, resource availability, and direct firm-government interactions. Specifically, well-resourced U.S. firms play a pivotal role in shaping the trajectories of disputes within the WTO’s legal frameworks. Perhaps most surprisingly, Brutger’s work shows that product specific barriers are more likely to be challenged than diffuse trade barriers, because the narrower barriers alleviate collective action problems.
In conclusion, in this article, the author posits that private firms, essentially large multinationals, are influential participants in the WTO, substantially affecting the direction and interpretation of international trade laws. It encourages reflection on these entities’ broad impacts, considering their significant influence on global trade laws and regulations’ landscapes.
- Irem B. A. Örsel is a Ph.D. student in Political Science at Tulane University. She holds a Bachelor’s in Philosophy from Middle East Technical University (Turkey) and a Master’s in Political Science from Eastern Illinois University. Her primary research interests are comparative political behavior, populism, judicial behavior, and computational social science methods. She focuses comparatively on Central and Eastern Europe, Middle East, and the United States of America. Irem is a first-generation student and an advocate of public service and public scholarship.
- Article details: BRUTGER, RYAN. 2023. “Litigation for Sale: Private Firms and WTO Dispute Escalation.” American Political Science Review
- About the APSA Public Scholarship Program.