Research Article

Three's a Crowd: Third Parties and WTO Dispute Settlement

Marc L. Busch^a1 and Eric Reinhardt^a2*

^a1 Georgetown University, mlb66@georgetown.edu

^a2 Emory University, erein@emorv.edu

Abstract

Disputes filed at the World Trade Organization (WTO) are attracting a growing number of third parties. Most observers argue that their participation influences the institution's rulings. The authors argue that third parties undermine pretrial negotiations; their influence on rulings is conditioned by this selection effect. They test their hypotheses, along with the conventional wisdom, using a data set of WTO disputes initiated through 2002. Consistent with the authors' argument, they find that third-party participation lowers the prospects for early settlement. Controlling for this selection effect, the evidence also suggests that third-party support increases the chances of a legal victory at the WTO.

Marc L. Busch is an associate professor in the School of Foreign Service and the Department of Government at Georgetown University. He is currently writing on the choice of forum for dispute settlement in international trade and on developing countries' litigation at the WTO. He can be reached at mlb66@georgetown.edu.

Eric Reinhardt is an associate professor of political science at Emory University. His current research concerns the political economy of international trade institutions. He can be reached at erein@emorv.edu.

* We thank Jane Bradley, Mark Hallerberg, Simon Lester, Petros C. Mavroidis, Amy Porges, Dani Reiter, Tom Remington, Joel Trachtman, and seminar participants at the Department of Foreign Affairs and International Trade Canada, Emory, Georgetown Law Center, the University of Wisconsin, and the editors and anonymous reviewers of World Politics for helpful comments. We thank Alex Muggah and Scott Winter for research assistance. Busch thanks the Social Sciences and Humanities Research Council of Canada and the Canadian Institute for Advanced Research for financial support; Reinhardt thanks the University Research Committee of Emory University.