Internationalization of the rule of law? Legalization meets institutional interaction

Abstract

"This paper studies institutional interaction through dispute settlement in international trade governance. Precisely, the paper addresses the question, how and with which consequences the dispute settlement mechanisms of the European Union (EU) and the World Trade Organization (WTO) as well as the dispute settlement mechanisms of the North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO) influence the normative development or effectiveness of the respectively other institution. Thereby, the paper proceeds in the following steps: First, legalization and institutional interaction will be highlighted as important topics of study. Afterwards, a theoretical framework to analyze institutional interaction through dispute settlement by causal mechanisms will be developed. Eventually, the empirical part of the paper analyzes two important trade-disputes regarding their inter-institutional influence: The Banana Dispute, which was arbitrated by the European Court of Justice as well as the WTO Dispute Settlement Body and the Softwood Lumber Dispute, which was arbitrated in front of the NAFTA dispute settlement mechanism and the WTO DSB. The paper concludes by drawing the implications of institutional interaction through dispute settlement for the legalization of international trade governance and especially for the already claimed 'internationalization of the rule of law' in international trade governance." (author's abstract)