Young Unravels Roots of Trade Compliance at the WTO in Latest Book

Posted January 31, 2022

When it comes to a topic as complex as international trade, it can be hard to understand all the forces pushing and pulling on governments and to get at what prompts them to fall back in line — or not — when they are found in violation of the rules.

Political scientists who study the World Trade Organization, for instance, have long believed states faced with a trade complaint often change course under pressure from firms concerned about the potential impact of enforcement sanctions.

Alasdair Young, professor and Neal Family Chair in the Sam Nunn School of International Affairs, turns that narrative on its head with a carefully researched volume, in which he concludes that when it comes to the European Union, at least, decisions to comply with WTO rulings are more about ensuring that the EU can continue to advance its interests as a major exporter through the WTO.

“They don’t want to encourage bad behavior by others or get a reputation as an unreliable partner,” said Young, who has been studying WTO compliance since 2008.

Five Case Studies

His new book, Supplying Compliance with Trade Rules: Explaining the EU’s Responses to Adverse WTO Rulings, arrives at this conclusion through detailed analysis of illustrative WTO rulings using process tracing, an analytic technique often used by social science scholars to get at the root causes of an event.

Young examines five episodes — complaints over beef, bananas, genetically modified crops, sugar, and bed linens. He finds that, despite the conventional wisdom that exporters worried about sanctions drive the compliance process — what he labels a demand-side explanation — officials want to avoid encouraging others to neglect the rules or being seen as a bad actor themselves that carries more weight.

“The absence of exporter pressure is despite the WTO being an easy case for the demand-side explanation of impact, given its capacity to authorize enforcement tariffs. Rather, the impetus for change has come from the supply-side, the greater engagement of trade officials in challenged non-trade policies and their changed preferences with respect to challenged trade policies,” Young writes in his book.

“The preferences of the officials responsible for the non-trade policies, however, were not affected by the adverse rulings. Thus, while the intention to comply was accepted, what policy change would constitute compliance was contested within the EU policy process. When this occurred, policy change was often limited and left the EU’s trade partners dissatisfied,” Young wrote.

Contributions to the International Relations Literature

The book adds to existing international relations literature by showing that the preferences of policymakers matter more than demands from societal actors in determining whether policy change happens and what form it takes, Young said. It also demonstrates that “the importance policymakers attach to consistency with WTO rules varies predictably, and those policymakers who are concerned with WTO compliance are influenced more by rationalist considerations than by constructivist ones.”

“With respect to the literature on the WTO’s effectiveness and legitimacy, I argue that while policy change in response to adverse rulings is the norm, which is good news for effectiveness, WTO members can and do resist obligations that would compromise particularly cherished policy objectives That is good news for legitimacy,” Young said.

The book also has lessons for the ongoing debate over WTO reform, delayed by the organization’s decision to postpone its most recent ministerial meeting due to Covid-19 concerns.

“The book helps to explain the U.S.’s frustration that even successful WTO complaints do not always translate into meaningful policy change, which has contributed to the U.S. blocking the functioning of the dispute settlement system,” Young said. “However, I also make the case that WTO members comply in the vast majority of disputes. The system, therefore, is valuable to the U.S. as a major exporter. This suggests that it would be in the U.S.’s interests to allow the dispute settlement system to resume functioning even as it seeks to reform it.”

Supplying Compliance With Trade Rules is published by Oxford University Press. It is available from the Georgia Tech Library.

It is Young’s fifth book. He has authored three since he joined the Nunn School, including The New Politics of Trade: Lessons from TTIP and Parochial Global Europe: 21^st Century Trade Politics. He is also co-editor of Policy-Making in the European Union.

The Nunn School is a unit of the Ivan Allen College of Liberal Arts.