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Abstract

This paper analyses relevant determinants for the probability to initiate a dispute on policy measures under the World Trade Organization (WTO) Dispute Settlement Mechanism (DSM). The empirical analysis focuses on agrofood related disputes to provide sector specific information on the driving factors in dispute settlement, and complements and extends previous studies by incorporating new potential determinants. The focus is shifted to bilaterally dependent characteristics to take care of trade related and power based relationships between Members, such as relevance of the defendant’s market and the complainant’s trade related retaliation capacity. Contrary to recent analyses of overall trade disputes, the results show that capacity-related determinants such as financial means and legal capacity and simple trade-related characteristics like export and import volume do not show a statistically significant impact on dispute initiation in the agro-food sector. However, the level of protectionism that Members face in their export markets, their operating experience with the DSM, the influence of private sector interests, complainants’ agrofood related export dependency as well as the size of their agro-food imports from the defendant party could be identified as relevant determinants of dispute initiation behavior.

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