The Japan as Future Lecture Series presents
Christina L. Davis, Edwin O. Reischauer Professor of Japanese Politics, Department of Government and Director of the Program on U.S.-Japan Relations, Harvard University:
“Shaping Trade Stability: WTO Rulings on Export Restrictions and Business Confidence in Supply Chains.”
An effective international legal system resolves disputes and deters violations. Once the strongest area of international law, the WTO has been weakened by internal conflicts, trade wars, and supply chain disruptions. This paper examines whether WTO rulings still bolster confidence in the rules-based trade order, focusing on business perceptions of supply chain stability.
Using a 2022 survey experiment of Japanese firm managers, we assess how WTO rulings shape
expectations about trade reliability. Respondents were randomly assigned to receive varying information regarding a WTO ruling that found China’s export restrictions on raw materials violated WTO rules, modeled on an actual case. We analyze how legal rulings and policy changes affect confidence in securing input supplies and compare perceptions of China’s supply chains versus other countries.
Results show that learning about a WTO ruling against China lowers confidence in China’s
supply chain reliability. However, further learning about China’s compliance with the ruling significantly restores confidence—more than similar policy changes without multilateral enforcement. These findings suggest that while highlighting violations may weaken trust, compliance strengthens confidence in global trade stability.
Christina L. Davis is a member of the Council on Foreign Relations and serves on the editorial board of several journals. Currently her research examines the evolving trade order and economic sanctions. She is the author of three books: Food Fights Over Free Trade: How International Institutions Promote Agricultural Trade Liberalization (2003), Why Adjudicate? Enforcing Trade Rules in the WTO (2012), and Discriminatory Clubs: The Geopolitics of International Organizations (2023), and has published articles in leading political science journals. She graduated from Harvard College in 1993, received her PhD in government from Harvard in 2001, and returned to Harvard after 16 years as a professor at Princeton University.