Williams, Russell Alan
March 2010
Canadian Foreign Policy (CFP);2010, Vol. 16 Issue 1, p17
Academic Journal
Given Canada's export dependence on American markets, Canadian trade officials have placed considerable emphasis on the Dispute Settlement Mechanism (DSM) of the World Trade Organization (WTO) in managing trade relations with the United States. By subjecting disputes to the DSM, officials hope to reduce the impact of the asymmetrical distribution of power between the two countries, ensuring that disputes are settled in accordance with the rules, rather than through bilateral negotiations in which settlements are driven by the relative power of the two nations. Most analysis has suggested that the DSM has been relatively successful in adjudicating trade disputes and that this has affected the nature of settlements. However, much of this analysis is based on problematic measures of success that do not examine the outcome of cases in sufficient detail to judge how effective the system really is. This paper explores the effectiveness of the DSM through an examination of the softwood lumber dispute-Lumber IV-arguing that, despite the common Canadian view that the system failed, the process was more effective than is recognized. The process worked, the problem for Canada is that WTO rules did not unequivocally support the Canadian position. This finding suggests that even in hard cases, the DSM is a successful arbiter of disputes.


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