How Large or Small is the Policy Space? WTO Regime and Industrial Policy

Seoul Journal of Economics 27 (No. 3 2014): 307-348

42 Pages Posted: 25 Nov 2014

See all articles by Keun Lee

Keun Lee

Seoul National University - School of Economics; CIFAR

Wonkyu Shin

Institute of Economics and Business, Ilias State University (ISU); Center for International Development Cooperation, Kyung Hee University

Hochul Shin

Seoul National University - School of Economics

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Date Written: August 30, 2014

Abstract

The paper identifies the need for improvements in policy space for developing and least developed countries under the current world trading system by examining the use of WTO dispute settlement system with descriptive statistics and case studies. The paper shows an asymmetry in the utilization of the dispute settlement system and the consequence of using the system between developed and developing countries. For instance, the paper demonstrates that the United States and some other developed countries use WTO rules effectively, resulting in the defeat of developing countries in disputes. These developing countries are forced to abandon their industrial policy measures. By contrast, the United States and the other developed countries continue to use WTO-inconsistent industrial policies in need without being much effectively challenged. Based on our findings, we suggest what should be done within the practices of the current rules, what can be done to change the current global rules, and what developing countries can still try under the current rules.

Keywords: Industrial Policy, WTO Dispute, Policy Space, WTO SCM Agreement, Subsidies

JEL Classification: F13, F53, K33, K41, O25

Suggested Citation

Lee, Keun and Shin, Wonkyu and Shin, Hochul, How Large or Small is the Policy Space? WTO Regime and Industrial Policy (August 30, 2014). Seoul Journal of Economics 27 (No. 3 2014): 307-348, Available at SSRN: https://ssrn.com/abstract=2530348

Keun Lee (Contact Author)

Seoul National University - School of Economics ( email )

San 56-1, Silim-dong, Kwanak-ku
Seoul 151-742
Korea

CIFAR ( email )

180 Dundas Street West, Suite 1400
Toronto, Ontario
Canada

Wonkyu Shin

Institute of Economics and Business, Ilias State University (ISU) ( email )

Kakutsa Cholokashvili Ave 3/5
Tbilisi, 0162
Georgia

HOME PAGE: http://beri.iliauni.edu.ge/researchers/

Center for International Development Cooperation, Kyung Hee University ( email )

Dongdaemun-ku
Seoul, Gyeonggi-Do 446-701
Korea, Republic of (South Korea)
82-2-961-9193 (Phone)
82-2967-6931 (Fax)

Hochul Shin

Seoul National University - School of Economics ( email )

San 56-1, Silim-dong, Kwanak-ku
Seoul 151-742
Korea

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