Does the Rule of Law Matter? The WTO and US Antidumping Investigations

Are states constrained by international law? Recent studies suggest that the legal regime of the World Trade Organization (WTO), in particular, has no independent effect on members’ trade policies. We argue, in contrast, that the WTO’s “rule of law” is likely to deter protectionist practices against other members, including those lacking the ability to retaliate. The WTO accomplishes this by clarifying policy standards and providing for enforcement through judicial review. We test these competing hypotheses using a dataset of 921 United States (US) antidumping (AD) investigations and 2,539 potential cases which were never initiated, from 1978 through 2001. We find that the US is less likely to investigate and impose AD duties against countries that are members of the WTO. The WTO legal regime deters protectionist practices against fellow members, especially against those unable to credibly threaten retaliation.