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The WTO Secretariat and the Role of Economics in DSU Panels and Arbitrations

The WTO faces an increasing burden of arbitrating trade disputes between WTO member states. The disputes are economically complex and often lead to rulings that require changes in Members' economic policies. This paper provides a positive and normative analysis of a previously unaddressed question: What roles do economic analysis and economists play in WTO adjudication under the Dispute Settlement Understanding (DSU)? We identify a number of problems with the current Secretariat provision of technical economic support to panellists and arbitrators as well as the sources of these problems - including the small number of professional economists in the Secretariat, the lack of diversity to their fields of specialization, and the ad hoc manner in which they have been integrated into the DSU adjudication process thus far. We also point the Secretariat to useful lessons on transparency and political independence learned from other institutions - e.g., central banks, competition authorities, and national trade remedy investigating agencies - that affect economic policy in similar politically sensitive environments. Finally, given a new mandate from WTO Members that DSU adjudicators have access to more sophisticated technical economic support and expertise, we make a number of proposals for reform.