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Calculating trade damages in the context of the World Trade Organization's dispute settlement process


Calculating trade damages in the context of the World Trade Organization's dispute settlement process



Review of Agricultural Economics 25(2): 385-398



DOI: 10.2307/1349844

Since its inception in 1995, the World Trade Organization (WTO) dispute settlement system has received over 250 notifications of trade disputes. While most have been settled, in a few cases the WTO arbitrators had to approve damage awards. This paper will use one of these cases ('Hormones') to explain the methodology arbitrators use to calculate damages and how this methodology differs from an efficiency-based measure of welfare that economists would instinctively provide.

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