The Politics of Compliance with Adverse WTO Dispute Settlement Rulings in China

Abstract

Starting from 2004, China's trading partners, in particular the United States, have increasingly utilized the World Trade Organization (WTO) dispute settlement system (DSS) to challenge China's trade-related measures. As a major player in world trade, how China responds to adverse rulings is not only important to its trading partners, but also for the future of the international trade regime. China has thus far held a relatively good compliance record when facing adverse panel and/or Appellate Body rulings, except for the recent delay in full compliance in China—Publications and Audiovisual Products. Through examining the factors affecting China's decision making when targeted in a WTO dispute, this article finds that, in general, China is highly motivated to comply with the WTO DSS due to the reputational costs of noncompliance. Nevertheless, the recent delay in compliance in China—Publications and Audiovisual Products also demonstrates that successful implementation could be impeded by certain politically influential interest groups, especially when the measure at dispute is politically sensitive.