“Why Adjudicate?ーEnforcing Trade Rules in the WTO” (Princeton University Press, 2012)

Christina L. Davis (Professor of Politics and International Affairs, Princeton University)

Today I am very happy and honored to be the recipient of the Masayoshi Ohira Memorial Prize. I would like to offer my deepest thanks to the Foundation and the members of the selection committee. I wish to express my gratitude to the many trade officials who took time to share their insights with me during interviews, and thank the many students at Princeton University who assisted greatly in my research. Finally, I am thankful to my family and friends for their support during the eight years I spent to complete the book.
The book “Why Adjudicate? Enforcing Trade Rules in the WTO,” is a research monograph about the effectiveness of the World Trade Organization (WTO) as a mechanism for resolution of trade disputes.
The WTO oversees the negotiation and enforcement of formal rules governing international trade. Why do countries choose to adjudicate their trade disputes in the WTO rather than settling their differences on their own? The book investigates the domestic politics behind the filing of WTO complaints and reveals why formal dispute settlement creates better outcomes for governments and their citizens.
The WTO plays an especially important role in the Pacific Basin region where economic interdependence has led to prosperity as well as conflict. Learning how to manage trade friction is essential for the East Asian economic development model, and this book presents lessons on how Japan and the United States have moved from bilateral negotiations toward more emphasis on adjudication. It also discusses the challenges of using the legal process against Chinese trade barriers and the reasons for the United States and Japan taking different approaches. Where the United States has been more aggressive to sue China in WTO, the Japanese government has pushed for negotiations. But a common theme for all countries lies in the value for domestic politics to have legal action as option for showing commitment to enforcing trade rules.
I demonstrate that industry lobbying, legislative demands, and international politics influence which countries and cases appear before the WTO. Democratic checks and balances bias the trade policy process toward public lawsuits and away from informal settlements. Trade officials use legal complaints to manage domestic politics and defend trade interests. WTO dispute settlement enables states and domestic groups to signal resolve more effectively, thereby enhancing the information available to policymakers and reducing the risk of a trade war. I support my argument with data on trade disputes and landmark cases, including the Boeing-Airbus controversy over aircraft subsidies, disagreement over Chinese intellectual property rights, and Japan’s repeated challenges of U.S. steel industry protection. In analysis of foreign trade barriers against U.S. exports, the book explains why the United States gains better outcomes for cases taken to formal dispute settlement than for those negotiated. Case studies of Peru and Vietnam show that legal action can also benefit developing countries.
For someone who has studied trade policies like myself, these are very interesting times indeed. Although the World Trade Organization negotiations continue to face deadlock, bilateral and regional trade agreements proliferate. Today in Japan, the Trans Pacific Partnership negotiations are a major topic in the news. In the creation of new rules, it is important to consider not only the levels of tariffs but also negotiations over the rules to enforce the agreement. Whether America or Japan, there is expectation that in exchange for opening their own markets they will see increases of exports overseas, and one must consider what response to take when exports encounter barriers or do not grow as expected. The conclusion of my book suggests that in order to balance domestic politics and international trade, it is essential to find ways to solve the trade disputes that arise through law as basis of conflict resolution.
In my career I have tried to pursue research that reflects both the experience of Japanese trade policy and theories about international political economy. Receiving this award is a great source of encouragement to me and I will continue to pursue these goals in my ongoing research. Thank you very much.

Profile
Professor, Department of Politics and the Woodrow Wilson School of Public and International Affairs of Princeton University.
I received my Ph.D. in political science from Harvard University (2001) and my B.A. in East Asian Studies from Harvard University (1993).
My teaching and research interests bridge international relations and comparative politics, with a focus on trade policy. My interests include the politics and foreign policy of Japan, East Asia, and the study of international organizations. In addition to my book “Why Adjudicate? Enforcing Trade Rules in the WTO” (Princeton University Press, 2012), I am the author of “Food Fights Over Free Trade: How International Institutions Promote Agricultural Trade Liberalization” (Princeton University Press, 2003). My research articles have been published in the American Political Science Review, Comparative Politics, International Security, and World Politics.