From Coordination to Collaboration: explaining international disputes over tariff classification

Abstract

Are changes in tariff classification of goods used by States to deviate from their trade commitments? This article intends to discuss some of the implications of the current system of classification of goods on States´ behavior. From current disputes, it seems that technical aspects of goods cannot alone explain the controversies surrounding classification. By applying methodological individualism, we argue that the classification of goods, which could initially be described as a coordination game, is changed by the introduction of trade agreements and can be then better characterized as a collaboration game. It follows that classification becomes a tool that allow States to opportunistically deviate from the World Trade Organization (WTO) rules. We then conclude by raising some questions on how the current system deals with opportunistic behavior, and whether the existence of two dispute settlement mechanisms, the one at the World Customs Organization and the one at the WTO, is adequate.