Effective dispute settlement raises the value of trade agreements and the return on governments’ investment in trade agreement negotiations. Three practical ideas could help governments negotiate and administer dispute settlement more effectively: better information on options, information on how ad hoc procedures work in practice, and model rules providing alternatives to accommodate variation in the choices that governments make. Today, more than ever, governments want to expand trade by negotiating regional trade agreements (RTAs). With 459 RTAs notified to the WTO, 287 in force, and more announced each month, governments, stakeholders, and the trading system have a large sunk investment in these agreements. Dispute settlement and enforcement mechanisms are essential to protecting the value of this investment. This article presents three practical suggestions to help RTAs have more effective dispute settlement. Regional trade agreements need functioning dispute settlement mechanisms – to ensure compliance that delivers economic benefits as advertised; to resolve conflicts that could otherwise lead to the RTA falling apart; and most of all, to deliver certainty that attracts investment creating jobs and economic growth. Even if RTA parties don’t formally invoke them, strong dispute settlement procedures provide valuable enforcement options and enhance RTA credibility. The core RTA benefit...
Written by Amy Porges