The study of international institutions has addressed two broad themes: the creation of
institutions and their impact on state behavior. Less understood is the political dynamic of
choosing when to use an institution. In the postwar milieu of economic institutions dealing
with trade, states choose whether to address problems in a regional trade association,
adjudication in a dispute panel, bargaining in a GATT/WTO trade round, or in bilateral
negotiations outside of a formal institutional context. Why do states favor one forum over
another? A better understanding of the selection process that takes place before the start
of a negotiation will deepen our understanding of the relation between state preferences
and institutional constraints. Drawing on examples from several negotiations, this paper
posits general expectations for patterns in the choice of institutions.
The parallel process of creating regional trade associations, participating in the mul-
tilateral trade system, and concluding new bilateral arrangements results in overlapping
jurisdictions. Each institutional forum has different features regarding the level of legaliza-
tion and the number of issues and actors. These features influence the scope, duration, and
stakes of the negotiation. Yet many trade issues could conceivably come up in any of these
negotiation fora. Lobby groups and governments try to choose the set of rules that will
favor their preferred outcome, and they also take into account the reaction of their trade
partner. The challenge for successful negotiation is to apply sufficient leverage to overcome
the vested interests in the status quo. Choosing the appropriate institutional forum is an
important part of this task.
I argue that the combination of interest group and government preferences tend to
push the most difficult trade topics into WTO trade rounds or dispute adjudication, while
the informal bilateral and regional consultation venues are favored for less controversial
trade problems. Most trade problems are first raised in bilateral talks, where negotiations
can resolve issues when there is not strong lobbying resistance on the respondent side.
Regional consultations may be useful when broader participation is necessary, but exclud-
ing a third party reduces the level of resistance. When the trade partner faces political
resistance, however, the broad agenda of a multilateral trade round provides a lengthy
process and tradeoffs to counter the narrow protectionist lobby. On the other hand, strong
lobbying within the country initiating the trade dispute favors the formal adjudication of
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Convention