International Trade - Theory and Policy, 2010a

countries from choosing more destructive protectionist policies—policies that are very seductive to voters,
especially in an economic crisis. If successful, the WTO could prevent a reoccurrence of Smoot-Hawley
and its aftermath both now and in the future.
KEY TAKEAWAYS
The WTO’s main purpose is to monitor the trade liberalization agreements reached by GATT member
countries in the Uruguay Round.
The most important ìpowerî of the WTO is its ability to adjudicate disputes between member countries
regarding compliance with the Agreements.
Dispute resolution is conducted by the Dispute Settlement Body (DSB), which includes one
representative from each WTO government.
The four main steps to a WTO dispute case are (1) consultations, (2) panel formation, (3) appeals, and (4)
resolution.
EXERCISE
1. Jeopardy Questions. As in the popular television game show, you are given an answer to a
question and you must respond with the question. For example, if the answer is “a tax on
imports,” then the correct question is “What is a tariff?”
1. The name of the GATT round that created the WTO in 1995.
2. The name of the current director general of the WTO.
3. The term used to describe the process of rescinding one’s trade liberalization promises at the
end of a WTO dispute.
4. The name of the WTO body that handles disagreements related to WTO commitments.
5. Countries must engage in these immediately after a dispute is raised at the WTO.
6. This official chooses dispute panel members if the complainant and defendant countries
cannot agree.
7. The length of time served by a WTO appellate judge.
8. What a country is expected to do after losing a WTO dispute case.
9. The city in which WTO headquarters are located.
10. The approximate number of dispute cases filed at the WTO since its inception in 1995.
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