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Ecuador revised 05



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Chapter 8 Compliance Bargaining in the WTO Ecuador and the Bananas Dispute James McCall Smith George Washington University I INTRODUCTION Studies of bargaining in the international economy routinely focus on negotiations regarding the original terms of agreements ex ante rather than on discussions regarding compliance with those commitments ex post A few scholars have called attention to this often neglected aspect of international negotiations compliance bargaining 1 The dynamics of compliance bargaining have particular importance for developing countries whose post agreement negotiating power is arguably constrained in many settings This paper examines compliance bargaining in the World Trade Organization WTO through a case study of Ecuador s tactics in its challenge against the banana import regime of the European Union EU After prevailing in its legal case against the EU banana scheme as a cocomplainant with others Ecuador pursued an aggressive strategy to encourage compliance with the ruling In the framework of Odell Ecuador s stance in this highprofile dispute was a purely distributive strategy 2 In the universe of international economic negotiations all compliance bargaining tilts toward the distributive end of the spectrum as one party claims another has failed to deliver benefits that were previously promised In the bananas dispute Ecuador s negotiators creatively sought to maximize their leverage within the specific institutional framework of WTO rules What is striking about this case is the extent to which those rules some interpreted and applied for the first time enabled Ecuador in effect to punch above its weight in the multilateral trade system As a test of developing country leverage in WTO compliance bargaining the bananas dispute is a least likely case At the outset of the dispute as Ecuador rushed its 2 WTO accession to join the proceedings the odds of success were hardly high The EU had already defied two GATT panel rulings against its banana



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