Factors That Explain the Engagement of Developing Countries in the World Trade Organization (WTO) Dispute Settlement Mechanism 1995-2016 Case of Kenya, South Africa and Mexico

Abstract:

Developing Countries constitute one-third of the membership of the World Trade Organization (WTO) yet their participation in the WTO Dispute Settlement Mechanism (DSM) is low. Do developing countries have trade disputes? What are their preferred channels of dispute settlement? The study is defined by three objectives: To determine how developing countries resolve their trade disputes and what their preferred channels of Dispute Settlement are; to determine the reasons behind the low engagement of developing countries in WTO Dispute Settlement Mechanism and to find out ways of improving the engagement of developing countries in WTO Dispute Settlement Mechanism. The study has used the Regime theory. Qualitative approach was used as the research method. Primary data from WTO experts in Geneva and case study research design were used to answer the research questions. The study found out that the failure by Developing Countries to utilize the WTO dispute settlement mechanism is triggered by factors such as the cost of referring a dispute to the DSB, Regional Blocs that provide avenues for dispute settlement and the ability of states to settle disputes through bilateral negotiations The study recommends that the trade dispute resolution mechanisms at regional blocs and FTAs in developing countries should be strengthened and structural transformation of WTO DSM undertaken in terms of cost as well as its procedures in order to benefit developing countries. The study also recommends further research on governments’ collaboration with the private sector in the area of international trade.