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Despite the decline in interstate wars, there remain dozens of interstate disputes that could erupt into diplomatic crises and evolve into military escalation. By far the most difficult interstate dispute that exists are territorial disputes, followed by maritime and river boundary disputes. These disputes are not only costly for the states involved, but also potentially dangerous for states in the region and allies of disputant states who could become entrapped in armed conflicts. Fortunately, though many disputes remain unresolved and some disputes endure for decades or more than a century, many other disputes are peacefully resolved through conflict management tools. Understanding the factors that influence conflict management—the means by which governments decide their foreign policy strategies relating to interstate disputes and civil conflicts—is critical to policy makers and scholars interested in the peaceful resolution of such disputes. Though conflict management of territorial and maritime disputes can include a spectrum of management tools, including use of force, most conflict management tools are peaceful, involving direct bilateral negotiations between the disputant states, non-binding third party mediation, or binding legal dispute resolution. Governments most often attempt the most direct dispute resolution method, which is bilateral negotiations, but often, such negotiations break down due to uncompromising positions of the disputing states, leading governments to turn to other resolution methods. There are pros and cons of each of the dispute resolution methods and certain factors will influence the decisions that governments make about the management of their territorial and maritime disputes. Overall, the peaceful resolution of territorial and maritime disputes is an important but complicated issue for states both directly involved and indirectly affected by the persistence of such disputes.

Article

The World Trade Organization (WTO) dispute settlement system is its judicial arm and enforcement mechanism, designed to assist members in resolving trade disputes that arise between them. Its design reflects a move toward greater legalization in trade governance under the multilateral trade regime. Compared with the dispute settlement system of its predecessor, the General Agreement on Tariffs and Trade (GATT), the WTO’s dispute settlement provided a more structured and formal process with clearly defined stages and more discipline in the timetable of the dispute so as to resolve trade disputes as efficiently as possible. Most important, the WTO’s dispute settlement provides for virtually automatic adoption of panel rulings: a respondent losing a case can block the adoption only if it can persuade all members of the WTO not to do so. The legal basis for the WTO’s dispute settlement system is the Dispute Settlement Understanding (DSU), which provides the principles and procedures by which members may bring their trade disputes to the multilateral trade regime for resolution. Overseeing the dispute settlement process is the Dispute Settlement Body (DSB), which consists of all WTO members and meets regularly to receive and to adopt reports of disputes at their various stages of progress. How effective is the WTO’s dispute settlement mechanism? Effectiveness can be conceptualized as success in attaining the objectives of the dispute settlement under the WTO in three areas: the efficiency of dispute settlement; inclusiveness of the dispute settlement process, especially as it concerns developing country participation; and compliance with legal obligations resulting from arbitration. The existing scholarship on this topic features key debates and frontiers for future research on firms and global production networks/value chains that have the potential to advance our state of knowledge concerning this “crown jewel” of the multilateral trade regime.

Article

Mostafa Beshkar and Eric Bond

International trade agreements have played a significant role in the reduction of trade barriers that has taken place since the end of World War II. One objective of the theoretical literature on trade agreements is to address the question of why bilateral and multilateral trade agreements, rather than simple unilateral actions by individual countries, have been required to reduce trade barriers. The predominant explanation has been the terms of trade theory, which argues that unilateral tariff policies lead to a prisoner’s dilemma due to the negative effect of a country’s tariffs on its trading partners. Reciprocal tariff reductions through a trade agreement are required to obtain tariff reductions that improve on the noncooperative equilibrium. An alternative explanation, the commitment theory of trade agreements, focuses on the use of external enforcement under a trade agreement to discipline domestic politics. A second objective of the theoretical literature has been to understand the design of trade agreements. Insights from contract theory are used to study various flexibility mechanisms that are embodied in trade agreements. These mechanisms include contingent protection measures such as safeguards and antidumping, and unilateral flexibility through tariff overhang. The literature also addresses the enforcement of agreements in the absence of an external enforcement mechanism. The theories of the dispute settlement process of the WTO portray it as an institution with an informational role that facilitates the coordination among parties with incomplete information about the states of the world and the nature of the actions taken by each signatory. Finally, the literature examines whether the ability to form preferential trade agreements serves as a stumbling block or a building block to multilateral liberalization.

Article

Kurt Hübner and James Anderson

Historically, the land known as Canada during the 21st century was colonized by the Kingdoms of France and England and was also the site of an abortive and short-lived colonization attempt by Scandinavian settlers in the 10th and 11th centuries. The early French colony of New France boasted a population in the tens of thousands but was eventually annexed and colonized by the United Kingdom following the conclusion of the Seven Years’ War. As a result, the modern nation-states of the United Kingdom and France have the closest relationships with Canada, and it is through these conduits that much of the contemporary Canada–European Union (EU) relationship lies. Although Canada, being a colony of the United Kingdom, did not conduct its own diplomacy for the entirety of the 19th century and much of the 20th, it was able to establish informal ties through diplomatic attachés to British embassies and consular offices. Following the Statute of Westminster in 1931, Canada gained the ability to craft an independent foreign policy which it pursued wholeheartedly. After the Second World War, it joined the North Atlantic Treaty Organization (NATO) alongside the United States, the United Kingdom, and numerous other European nations. Its formal relationship with the EU and its predecessors began in 1959, when it and the burgeoning European Atomic Energy Community (Euratom) signed an agreement on the peaceful uses of atomic energy. Since then, its cooperation has gained breadth and depth, expanding to myriad other policy areas including agriculture, foreign policy and defense, security, and trade. There have been points of tension between the two partners in the past, most notably around issues with the Quebec independence movement, governance of the Arctic, and governance of international fisheries and the oceans. However, over time the EU has grown to become perhaps Canada’s second most important partner worldwide, after the United States. This has culminated in the signing of the Comprehensive Economic and Trade Agreement (CETA) and the Strategic Partnership Agreement (SPA), which are major milestones and cement Canada and the EU’s mutually increasing importance to each other.