Overlapping Institutions, Forum Shopping, and Dispute Settlement in International Trade
Preferential trade agreements offer members an alternative to dispute settlement at the World Trade Organization. This gives rise to forum shopping, in that complainants can file regionally, multilaterally, or not at all. What explains this choice of forum? I argue that complainants strategically discriminate among overlapping memberships: on a given measure(s), some prefer to set a precedent that bears only on a subset of their trade relations, others a precedent that bears on all their trade relations, while still others prefer not to set a precedent. Thus, the key to forum shopping is not simply which institution is likely to come closest to the complainant's ideal ruling against the defendant, but where the resulting precedent will be more useful in the future, enabling the complainant to bring litigation against other members, rather than helping other members bring litigation against the complainant. I consider disputes over Mexican brooms and Canadian periodicals. a
a For comments, I thank Vinod Aggarwal, Raj Bhala, Jane Bradley, Bill Davey, Rob Howse, Miles Kahler, Simon Lester, Rod Ludema, Ed Mansfield, Lisa Martin, Petros C. Mavroidis, John Odell, Joost Pauwelyn, Amy Porges, Eric Reinhardt, Peter Rosendorff, Ken Scheve, Ed Schwartz, Christina Sevilla, Michael Simon, Jay Smith, Debra Steger, Joel Trachtman, Todd Weiler, seminar participants in the Program on International Politics, Economics, and Security (PIPES) at the University of Chicago, and two anonymous referees. All shortcomings are, of course, my own. For research support, I thank the Canadian Institute for Advanced Research and the Social Science and Humanities Research Council of Canada. For research assistance, I thank Alex Muggah, Krzysztof Pelc, and Scott Winter.