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The WTO dispute settlement process is an improvement to the original GATT dispute settlement mechanism. However, it fails to assure a timely implementation and enforcement of the dispute settlement body (DSB) recommendations. To this date, the issue of mandatory enforcement is still open to interpretation. The number of ‘matters’ that have been subject to WTO dispute settlement stands at 266 over the 1995–2006 period. The number of implementation disputes has increased since 1998 and stand at 34 as of January 1, 2007. This chapter reviews the process of dispute settlements and enforcements since 1995 and to argue for the interpretation of ‘WTO agreements’ as ‘binding contracts’ whose breach must be evaluated as either ‘efficient’ or ‘non-efficient’ when discussing enforcement. In this context the non-compliance issue may be viewed as an ‘efficient breach’ where the only efficient remedy is a ‘fine’ rather than the usual practice of ‘suspension of concessions or other obligations’ to the Respondent. What sets our approach apart from earlier discussion is that it does not view ‘suspension of concessions’ as a sufficiently burdensome and efficient sanction. A ‘fine’ on the other hand may serve as a ‘buy out’ of a Respondents WTO obligations, and can be transferred to the negatively affected domestic producers in the Complainant's market as compensation for losses.

This paper outlines the current state of international textile trade between developed and developing countries and traces the history of textile trade agreements over the past three decades. Possible future policy scenarios for world trade in these commodities are presented. The general views of different country groups are examined, as well as the perspective of groups within the US. Implications for government policy‐makers and those marketing textile and apparel products are discussed in an effort to meet the challenge of designing an equitable system of trade and achieving the beneficial exchange of textile and apparel products worldwide.

A principle reason for the inability of the General Agreements on Tariffs and Trade (GATT) to serve as the vehicle for international trade liberalization was that it was the protocol for the establishment of the International Trade Organization. It was never intended to become a functioning institution. As such, it did not have a well-designed system for the settlement of trade disputes. At least partially because the GATT was not intended to function as an institution, an arguably excessive reliance on consensus emerged as the vehicle for the resolution of trade disputes. A consensus to accept the recommendations of a dispute panel became the standard for resolution under the GATT. Because the defendant could always object to implementation of the panel's recommendation, thus denying consensus, successful resolution of disputes were relatively infrequent. In the 47 years, during which the GATT was the principle international trade forum, 101 panel reports were adopted. Given that it is possible to file disputes on the basis of nullification and impairment of expected benefits, which is a considerably weaker standard than the allegation of a legal breach, it is apparent that the ineffectiveness of the dispute resolution mechanism was a deterrent to the filing of complaints. As the GATT increased in membership and pressures to address increasingly complex trade issues (intellectual property rights and agricultural subsidies, for example) emerged, it became apparent that the GATT could be undermined by an inability to resolve disputes.

It seems that the discussion about deregulation is dominated by economists. As a result the overruling consideration is efficiency to the exclusion of other factors which also ought to be considered. Institutions (law, rules, norms and conventions) do not represent economic values alone. Moreover, the entire discussion is conducted in the shadow of a particular economic perception which underrates the significance of institutions. This deficiency may well be the result of the neo‐classical model’s underlying assumption of perfect markets that obscures the role of institutions or puts them in a negative light. Recent economic insights recognize “imperfect markets” and relate this to imperfect information. It takes account of transaction costs next to production costs. It acknowledges the role of institutions, and abandons the mistaken perception that markets are necessarily antithetical to institutions. This leads to the conclusion that the debate about deregulation must not be conducted in general terms of a contradiction between the state and the market, but in the light of the appreciation that markets are strongly dependent upon institutions. The crucial question is the influence of specific institutions in relation to the underlying social and economic processes – to the dimensions of time and place.

In this chapter I would like to recall how I got started on my research on the multinational enterprise (MNE) and outline how my thinking on this important economic institution has evolved through the years.11I thank Sondra Grace of Gracefully Put for editing this manuscript.