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Why do states agree to establish legalized dispute resolution mechanisms? One of my arguments about the incentives of legalization is that states intend to reduce the risk/uncertainty involved in dispute settlement, and to increase the utility of dispute outcomes. This paper explores three aspects of risk/uncertainty problems that are related to the legalized dispute settlement (DS) mechanism of the WTO: risk reduction, risk creation, and risk management. Although existing studies have discussed risk/uncertainty problems in the context of international institutions, there has been no systemic analysis regarding the different aspects of risk/uncertainty problems and their relationships with international legalization. The first argument in this paper is that states can reduce risk/uncertainty and increase utility by arranging their relations through international law. Focusing on dispute settlement mechanisms of the WTO, I contend that clarified substantive rules, well-established procedural rules, independent legal bodies, and legal precedents ?the four components of the legalized DS mechanism ?can reduce the risk/uncertainties involved in dispute resolution. As compared with the non-legal bargaining mechanisms of dispute resolution, the legalized DS system tends to produce dispute outcomes with narrow variations and smaller fluctuations. Assuming the risk-averse utility function of rational actors, we can understand how the legalized DS system improves utility among disputing states by reducing uncertainties. [ABSTRACT FROM AUTHOR]

What strategies do state use in resolving disputes under the WTO system? As compared with the GATT DS system, the WTO is equipped with strictly binding rule-based dispute settlement mechanisms. Due to these institutional characteristics, states command various strategies for maximizing their interests in dispute resolution. Assuming that states are rational unitary actors, we can infer various strategies that can be commended by the member states under the WTO DS system. (1) Pursuing legal decisions or early settlements: Under what condition do sates pursue early settlement or pursue final legal judgments? The choice depends on the legal merit of the case, time and costs for reaching final decisions, the expectation of creating legal precedents, and so on. (2) Dilatory strategy: Although the WTO rule prohibits delaying or blocking disputes by the losing states (automaticity), states often want to extend the time span to reach final decisions, especially when they face domestically sensitive issues with high stakes, such as safeguard cases. Since the WTO DS procedure combines bilateral consultation and the formal legal process, states can use dilatory strategy at the early consultation stage or at the final implementation stage. (3) Coalition and counter-coalition: Because the WTO allows collective complaints against one defending state, complainant states tend to sue collectively rather than individually. This mechanism enables reducing transaction costs for filing / concluding disputes, as well as strengthening the legal merit of the case. In addition, states can participate in disputes as a third-party and submit their own opinion regarding the case. This also facilitates forming coalition or counter-coalition among states depending on their interests. (4) Countersuit: This pattern has been frequently witnessed in the cases between the US and the EU. By commanding countersuit strategy, states expect to influence the ongoing disputes on their behalf or to retaliate against other states? lawsuit. (5) Domestic audience effect: In determining their legal behavior, states need to consider domestic public opinion or interest group pressures.Using statistical analysis of the WTO DS data for last years, my paper intends to illustrate the conditions, practices, and effects of these dispute settlement strategies under the WTO DS system. ..PAT.-Conference Proceeding [ABSTRACT FROM AUTHOR]

This paper examines various strategies commanded under the WTO DS system. Because of the strong legal characteristics of the WTO DS system, states' optimal strategies has changed considerably as compared with those under the GATT system. [ABSTRACT FROM AUTHOR]