A Renegotiation Perspective on Transatlantic Trade Disputes

Transatlantic trade disputes seem to be a rising concern. According to the most critical voices, they provoke notable "trade wars" and crucially impair the credibility of the WTO dispute settlement mechanism. In this paper, we suggest that such conclusions are unwarranted. Violation of WTO agreements and non-compliance with Dispute Settlement Body rulings should be considered as an instrument for renegotiation with unique features, providing indispensable flexibility to the world trading system. Such flexibility is necessary because of incomplete contracting and "local" lack of commitment at the time of concluding agreements.Dispute settlement, WTO, non-compliance, trade wars, renegotiation, flexibility, incomplete contracting