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The (Domestic) Power of Legalization: U.S. Support of WTO Dispute Settlement Alex Thompson Department of Political Science Ohio State University
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PUZZLE Why did the U.S. spearhead dispute settlement reform during the Uruguay Round (1986-1994)? Theoretical puzzle: –Realism –Bargaining Power –Delegation to IOs –Smith 2000
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EXISTING EXPLANATIONS Efficiency arguments Efficient breach Expand trade Deep Cooperation → Enforcement –Problems:Don’t explain U.S. support Don’t explain timing Commitment argument End of Cold War (Goldstein & Gowa 2002) –Problem: Empirical
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STATE LEADERS AND IOs Relative to other domestic actors, executives benefit from shifting policy issues to the international level. Agenda setting Control Information/expertise Bargaining advantage Literature: Moravcsik 1994, Drezner 2003, Brewster 2004
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Argument: By shifting the resolution of trade disputes to the international level, the President gained influence relative to Congress, even at the risk of diminishing U.S. influence over its trading partners.
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Implication 1 Divergent preferences: President and Congress in mid-1980s. Trade deficit on the rise in early and mid-1980s # of AD petitions going up in 1980s—peak year is 1985 # of trade bills introduced in Congress increases dramatically in mid-1980s –Senate aide in 1985: “The target isn’t the Japanese; it’s the White House” (Destler 1992) Omnibus Trade and Competitiveness Act of 1988 –Explicitly designed to check President’s power
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Implication 2 Intentionality: Evidence that Executive branch sought DS reform for hypothesized reason. Executive branch backlash against pressure from Congress - USTR Carla Hills warned the Senate that “Unilateral retaliation can undermine the very system of international rules we are trying to promote and expand in the Uruguay Round.” - Letter from Reagan cabinet to House Speaker: “Proposed amendments…would have enormous trade chilling effects, would likely provoke retaliation and mirror legislation, and would flatly violate our international obligations…..We cannot accept the premise that the test of a ‘tough’ trade bill is the extent to which it removes Presidential discretion.” Interviews: Confirm that domestic balance of power was a consideration
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Implication 3 President advantaged in practice under WTO DSM. Commerce official: The new DSM “allows us to raise concerns in a non-threatening manner.” USTR official: WTO rulings “give legitimacy to our claims, which helps us with foreign governments and with Congress.” International legal rulings offer hands-tying benefits, political cover for leaders (Reinhardt 2003; Allee & Huth 2006) Result is sticky: DSU remains despite complaints and calls for reform from Congress
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CONCLUSIONS Better understanding of an intrinsically important case Legalization literature too state-centric (Goldstein & Martin 2000) Domestic politics explanation for why powerful states delegate to IOs
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