Description
While the World Trade Organisation (WTO) dispute settlement system faces both structural and imminent crises, the relevance of preferential trade agreements (PTAs) for the international trade order is increasing. Previous analysis of the institutional design of PTAs, however, did not consider states' prior experiences in the WTO. By conceptualising dispute settlement mechanisms (DSMs) in terms of complainant rights, this article develops the methodological framework for comparing the institutions of PTAs to those of the WTO and, subsequently, for arguing that the design PTAs is an outcome of institutional diffusion processes. While multilateral institutions themselves might not be acting as institutional innovators, they can serve as diffusion hubs that make institutional standards accessible to a large amount of states. This article shows that participation in multilateral dispute settlement strongly shapes preferences in bilateral and plurilateral treaty negotiations, with experience in multilateral trade disputes increasing the likelihood that states conclude DSMs with strong complainant rights. States also take into account the prior dispute experience of their trading partners: They generally avoid agreeing to strong complainant rights if one party is significantly more likely to initiate trade disputes than the other. Evidence from a number of interviews with negotiators on chapters on dispute settlement provide evidence for diffusion processes and the relevance of expectations about trading partners. The findings both highlight the importance of the WTO beyond multilateral trade cooperation and raise concerns over trade disputes increasingly being brought to PTA dispute settlement if the crisis of the WTO continues.
