THE PURPOSE OF THE PROJECT
The original purpose of the GATT was to prevent trade instruments, such as import tariffs and quotas, to be used for protectionism. But it was understood from the outset that domestic policy instruments (DPI) could not be left unregulated, since a large range of such policies could be used for protectionist purposes. The agreement therefore included the National Treatment provision, which loosely described seeks to prevent imported products to be treated less favorably than similar domestically produced goods. Over the years, there has been a steadily increasing focus on DPI in the multilateral trade regime. In particular, with the advent in 1995of the GATT successor, the WTO, much of the attention in negotiations, and in particular in dispute settlement, came to be directed against these instruments. This continuing shift of focus is causing increasing tensions between the desire to prevent protectionism, and on the other hand, the need to allow countries a sufficient discretion to pursue legitimate national policy objectives. The broad purpose of this project has been to study aspects of this conflict as it appears in WTO dispute settlement (DS). While originally perceived to put equal weight on empirical and theoretical work, the project came to study mainly on (but not only) empirical aspects of the treatment of DPI in the DS system.

THREE MAIN RESULTS, AND NEW ISSUES THAT THE PROJECT RAISES
(1) In order to allow for an empirical examination of the WTO DS mechanism, a significant amount of effort was spent on updating an earlier data set collected by Professor Petros C. Mavroidis and the author. This data set included all disputes initiated 1995-2007, and contained just below 28 000 data entries. After the update, the data set includes all disputes initiated 1995-August 2011, and it contains more than 66 000 entries. To appreciate the magnitude of the effort involved, note that each of these entries has been extracted "manually" from WTO legal documents, and reports from WTO dispute panels in particular. This has required locating and digesting many hundred documents, many of which contain hundreds, and sometimes even thousands, of pages. For all disputes, the data set thoroughly covers information on all stages of dispute settlement proceedings, from the moment when consultations are being requested to the eventual implementation of the rulings.

While the data set is obviously not a "research result", it is still an important output from this project. To the best of our knowledge, the data set is by far the most comprehensive, publicly available data set on the WTO DS system, and it is extensively used by scholars in economics, law, and political science. (It is downloadable from the World Bank website, together with a Manual that was also updated as part of this project.)

The updated data set served as the basis for Horn, Johannesson and Mavroidis (2011), which provides core descriptive statistics on a large range of aspects of the WTO DS system.

(2) The data set was also instrumental for the writing of Horn (2013), which seeks to shed light on the common claim that WTO dispute panels have serious, and increasing, difficulties to handle WTO disputes. One alleged manifestation of this is the fact that panels require substantially more time to issue reports than is stipulated in the agreement. A commonly suggested reason for the long time panels require is that panels increasingly have to address disputes concerning DPI. These are said to be more complex legally, scientifically and politically, compared to the traditional type of border instruments dispute.

There are many disputes where panels have clearly struggled to cope with their tasks, and where as a result, it has taken substantial time for panels to issue reports. But there are also frequent examples of the opposite, where panels seem to have relatively quickly issued reports, although they may still have exceeded the statutory time limits. The difficulties panels may possibly face therefore seem to vary considerably across disputes.

The purpose of Horn (2013) is to examine empirically how a number of factors relate to the time required for panels to issue reports, and in particular the role of disputes concerning DPI. To this end, the paper assumes that the time needed for a panel to issue its report depends on both the volume of the work laid before it, and the complexity of the task.

The paper finds that proxies capturing both these factors are positively and significantly related to the amount of time required to issue reports. But the two factors that should mitigate the problems panels face--a large case law, and panelists' experience from serving on earlier panels--do not seem to matter.

It is also shown that a small number of disputes with extreme features heavily influence the estimated relationship. The paper here points to a much more general issue when discussing shortcomings of the WTO DS system: how should these extreme disputes be views, are they outliers, or do they indicate exactly the type of problem that allegedly exists?

(3) WTO members have committed to reduce barriers to trade. At the same time, many of these countries have made commitments with regard to DPI that request these countries to restrict trade. A prominent example of the latter is Multilateral Environmental Agreements (MEA). An important issue in the legal debate is the relationship between these two bodies of law, and in particular, what should be the status of MEA in WTO dispute settlement? The basic problem is that although WTO members have had plenty of opportunities to clarify the role that they desire that MEAs should have in the WTO, both through legislations, and negotiations in WTO committee work, they have refrained from doing this. Also, hardly any of the MEAs contain any reference to the WTO. The purpose of Horn and Mavroidis (2013) is to add to this, often highly infected, debate.

The distinguishing feature of the study is that it seeks to address the relationship between MEAs and WTO law in light of the possibilities that countries have for bringing MEAs into the WTO legal order, and in light of the reason(s) why the parties have chosen not to use existing possibilities, but to separate their obligations into two bodies of law. The paper emphasizes what it sees as the major reason for separation: the costs associated with negotiating complex agreements, and its consequences. "Contracting costs" can take several forms, e.g. administrative resources (labor time in particular) that are required to prepare and conduct the negotiations; the time to implement cooperation; and possibly also a higher risk of breakdown of negotiations. These costs serve as strong incentives for the parties to simplify negotiations, and one means of doing this is to conduct separate negotiations on trade and on environment.

The main conclusion of the paper stands in contrast to much of the legal academic writings on the issue. The paper argues that MEAs should not be seen to impose rights or obligations in the WTO legal order. However, MEAs can still provide a useful source of factual information for WTO judges.

We believe the paper is rather unique in how it uses economic reasoning to derive concrete recommendations about how WTO judges should treat MEAs. It should be emphasized however, that the economic analysis is informal, and very sketchy. While it seems clear that part of the argument could be given more rigorous underpinnings, there is still an open question concerning the more precise meaning of the highly amorphous notion of "complexity", a notion that the paper leans heavily on. Can the rather drastic conclusion of the paper be given a firmer (albeit by necessity a more narrow) foundation?

THE PROJECT'S INTERNATIONAL LINKAGES
The project has had international linkages in many ways. For instance, the collaborator Petros C. Mavroidis, who is one of the world's leading trade law scholars, is Professor of Law at European University Institute, Columbia Law School, and University of Neuchatel; the data set has been made internationally available by the World Bank; and several papers have been published internationally.

TWO MAIN PUBLICATIONS
Papers are still in the process of publication. But the two main papers are Horn (2013), and Horn and Mavroidis (2013), for reasons discussed above.

PUBLICATION STRATEGY
The strive is to make all results of the project internationally available. To this end, the WTO DS data set, the accompanying Manual, and a working paper version of Horn, Johannesson and Mavroidis (2011), are downloadable from the World Bank Website, as well as the author's own website. Studies have also been made available as IFN Working Papers or as CEPR Working Papers. The strive is to publish Horn (2013), and Horn and Mavroidis (2013), in reputable international journals (the latter is in the revise-and-resubmit at an economics journal).

Publications

Horn, Henrik, Louise Johannesson och Petros C. Mavroidis (2011). ”The WTO Dispute Settlement System 1995–2010: Some Descriptive Statistics”. Journal of World Trade 45, no. 6, 1107–1138.

Horn, Henrik and Petros C. Mavroidis (2011). “The WTO Dispute Settlement Data Set 1995-2011: User’s Guide”.

Horn, Henrik (2013). “The Time WTO Panels Require to Issue Reports”. Centre for Economic Policy Research Discussion Paper No. 9554, London.

Horn, Henrik and Petros C. Mavroidis (2013). “MEAs in the WTO: Silence Speaks Volumes”. 

Personal website: www.ifn.se/eng/people/research_fellows/henrikhorn

Link to material at World Bank: http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTRESEARCH/0,,contentMDK:20804376~pagePK:64214825~piPK:64214943~theSitePK:469382,00.html