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This paper examines the economic implications of the tariff increases by the United States and by China during the Trump era trade dispute and the gains from their potential removal. The increases were dramatic, with the US raising tariffs on industrial products by a factor of six – with particularly large tariff increases on intermediate and capital goods – and China increasing its tariffs on US agricultural products more than five-fold. These changes distort trade and production decisions in both countries and undercut the global trading system. They resulted in substantial economic losses to each country, with import volumes reduced by 4.9% in China and 4.5% in the USA, and bilateral trade patterns were massively distorted. Their cost to the United States rose at the end of 2021, when the import expansion provisions of the Trump era Phase One Agreement expired. Negotiating the abolition of these costly and disruptive tariffs would generate substantial real income gains for both countries and help lower US consumer prices.
One of the most contested issues in international trade negotiations is the level of protection granted to geographical indications (GIs). WTO Members are divided between the ‘Old World’ represented by the European Union and the ‘New World’ headed by the United States. For decades, conventional wisdom has suggested that the debate is indeed a disagreement over the terroir idea. This article tackles the debate from a largely unexplored perspective, namely, fair use exceptions, which allows us to find the opposite: even if countries embraced the terroir idea equally, the divide on protection level would persist because of divergent approaches to the fair use of GIs. This divergence derives from countries’ different preferences for balancing conflicting interests, different policy goals, and different understandings of what is ‘fair’. Other countries should take these considerations into account when choosing a protection level suitable for their national conditions and goals.
The last decade has witnessed the emergence and rise of trade disputes over renewable energy support measures. By pitting trade against the environment, these disputes ignited a considerable debate over the adequacy of the green policy space available under WTO law. This article examines whether and to what extent the first ten years of litigation settled the key issues in this debate by undertaking a systematic analysis of the developments in the case law and in the renewable energy policy landscape. The analysis reveals that the case law has raised more questions than answers and much uncertainty remains as to the scope of the policy space available for the subsidization of renewables. It also highlights how these disputes steered the debate away from the most contentious issue of subsidy regulation to the slam-dunk issue of non-discrimination. In doing so, they helped conceal rather than resolve the green policy space deficit in multilateral renewable energy subsidy governance.
This paper provides a systemic study of China's policy and legal responses to security-related actions and disputes in the international trade regime. It starts with a brief review of the law and practices relating to the security exceptions under the World Trade Organization to provide an important context for understanding the recent developments of China's approaches to national security. Based on a detailed discussion of China's approaches at international and domestic levels, we argue that China's security strategy has been shifting from being defensive to proactive: internationally by seeking to influence the development of trade rules and practices, and domestically by expanding national security to cover a wide spectrum of economic security interests and developing a comprehensive regulatory framework to protect such interests. The way in which major trading nations are taking the law into their own hands, based on ever-expanding security interests, does not bode well for the future of the multilateral trading system. There is a pressing need for collective action by all governments involved to re-design security-related rules and exceptions to confine the use of security measures to agreed parameters.
Article 16 of the Ireland–Northern Ireland Protocol annexed to the EU–UK Withdrawal Agreement is an escape clause which allows the parties to deviate from their obligations under certain conditions. This article maps out the main features of the safeguards provision in the Protocol in light of international trade law and international relations literature on treaty design. It provides a detailed examination of the safeguards provision in the Protocol and highlights the key design flaws associated with this regime as well as some potential solutions to such flaws.
This article takes issue with the assumption the policy research literature, specifically that produced by the World Trade Organization (WTO), makes about the role of law as one which is mainly reactive to an exogenous economic reality, that of value chain trade. It argues instead that law has played a much more active role, shaping the so-called fragmentation and fractionalization of production that has led to the proliferation of Global Value Chains (GVCs). By tracing the evolution of post/colonial international economic law, the article shows how trade and investment provisions in particular have been (and still are) an important terrain over which the relationship between companies and states is articulated, with important consequences for all actors involved in GVCs. If this active role is acknowledged then law can be seen not only as contributing, together with other market-making mechanisms, to the making of those economic processes it is assumed to only respond, but also as a means through which these processes can be shaped otherwise.
Drawing upon Fernando Piérola-Castro's extensive experience as a WTO practitioner, this book is a comprehensive and up-to-date overview of safeguard measures. With each chapter exploring a different provision of the agreement, it explores the relevant rules and procedures that govern safeguard investigations, the imposition of measures, the question of consultations and rebalancing and the multilateral transparency requirements of notification. Grounded in relevant case law, this book emphasises practice, logistics and risk management. Without focussing on the practice of any particular jurisdiction, it offers a general framework that can be applied to several domestic laws. It is a practical manual with the view of assisting in day-to-day problems in the handling of safeguard matters.
The dispute settlement system of the World Trade Organization (WTO) knew considerable success in its early years, being described as the WTO's crown jewel. In recent years, the jewel has become tarnished. Its principal actor – the Appellate Body – is no longer functioning, and the practice of the membership has been to appeal almost all new panel reports, thereby consigning them to a legal limbo from which they seem unlikely to ever emerge. This paper briefly reviews the record of the WTO dispute settlement system, considers the problems that led to its current state and evaluates various proposals that have been made to reinvigorate the system.
Since its accession to the WTO twenty years ago, China's image has shifted from a good student aspiring to assimilate itself into the multilateral trading system to one that is increasingly alienated from key WTO principles. How has China's perspective on WTO been evolving? What are the reasons behind China's changing perspective? This paper answers these questions from the Chinese perspective with a comprehensive analysis of the key moments in China's first two decades in the WTO, followed by practical suggestions on how to engage China more constructively in the WTO and beyond.
With the benefit of hindsight, much scholarship across political science, law, and economics has told the story of the international trade regime as if it had been pulled all along by a definite aim. By contrast, this article emphasizes the contingent aspects of the trade regime's development, looking especially to its dispute settlement mechanism. The very creation of the Appellate Body had by no means a certain outcome, and once created, the tribunal's evolution was largely unanticipated by states. An often-overlooked actor played a key role in that development: the WTO Secretariat. Drawing on recent findings, this article lays out the full extent of the Secretariat's role in dispute settlement, which remains largely hidden from view, and deliberately so. From appointing adjudicators and managing their remuneration, to providing them with legal arguments and drafting final rulings, the Secretariat of the WTO looms larger than in any comparable tribunal. Making its influence more transparent, I argue, would go a long way to returning the system to the shape it was designed to have at its outset.
Although globalization and the world trade regime have reduced the significance of distance between countries, within countries geography matters now more than ever. Inside countries’ borders, economic activities, such as production and employment, occur unevenly across space. As a result, international trade impacts parts of a country differently. Some areas benefit from rising trade, while others experience reductions in local wages and employment as a result of increased import competition. Because regions’ experience of globalization varies, public opinion about trade differs across geographic areas within countries. Voters living in regions advantaged by trade are more likely to support economic openness, while voters living in regions negatively impacted by trade are more skeptical of the benefits of globalization. The geographic disparities in public attitudes towards trade often align with salient political cleavages. As a result, debates over trade have become increasingly polarized in many countries, which may threaten states’ continued economic openness as well as their engagement with, and even support for, the world trade regime.
Born of confidence at the height of optimism for economic globalization, the WTO has failed so far to fulfill all the high hopes of its founders. WTO members have largely been unable to agree on new rules to meet new commercial needs, and global trade governance has been fragmented by a resulting proliferation of local and regional trade agreements. The rise of developing countries - and especially the rise of China - have transformed global trade negotiations. The return of economic nationalism in the United States and elsewhere has accelerated a retreat from multilateral trade liberalization and other global solutions in trade.
WTO rules must preserve the natural world by protecting ecology and promoting a circular economy. Animal life must be respected, and wildlife trade must be restricted. New rules are required to help prevent deforestation; help make the mining of metals sustainable; eliminate restrictions on trade in raw materials; and support sustainable land use and water use and sustainable agriculture. New rules must also help facilitate sustainable consumption and production, including by providing trade solutions to plastics pollution.
The frayed links of the WTO must be made into the lasting links of what the WTO was originally intended to be. The international cooperation essential to making these lasting links can only be achieved if countries see their enlightened self-interest in taking the broader and longer view. This is a prerequisite to trade action, climate action, and all the other global actions necessary for achieving human flourishing through sustainable development.
In the wake of the pandemic, a new world is in the making. There can be no returning to the old world before Covid-19. In this new pandemic world, trade and trade rules are challenged along with all the other foundations of postwar liberal internationalism. The WTO rules that help link trade remain necessary. New rules are urgently needed to address the links between trade and nature and between trade and other aspects of sustainable development. New rules are equally needed to help spur a green recovery from the economic collapse caused by the pandemic.
To make the new rules needed for the new pandemic world, there must be international cooperation. Optimism is essential to creating cooperation. So too is trust. Trust is not possible without equity and inclusion. Inequality must be addressed if trade liberalization is to advance. Thus, the question of global justice must likewise be addressed. To attain justice, there must be inclusion. Particular emphasis must be given everywhere to the need for gender equity, inclusion of Indigenous peoples, and an end to all forms of racial discrimination. For all everywhere, there must be an emphasis on human flourishing through human development and sustainable freedom.
WTO rules must extend beyond the links between trade and climate change to strengthen the links between trade and other economic, environmental, and social dimensions of sustainable development., including the global crisis in biodiversity. New rules are needed to free trade in environmental goods and services and to discipline fisheries subsidies and fossil fuel subsidies while promoting sustainable energy.
The pandemic has turned the world inward and toward such perennial false promises of self-sufficiency as localism and protectionism. The trade links made possible by global supply chains are being questioned along with all else that connects the global economy. Amid this questioning, in the ongoing battle to end the pandemic, tariffs and other barriers to trade in medicines and other medical goods must be eliminated; vaccine nationalism must be replaced by vaccine multilateralism; and trade restrictions on the global supply of food must be avoided.
New trade rules for the new pandemic world must begin with long needed rules that have yet to be agreed after decades of deadlocked multilateral trade negotiations. Trade must be freed in international trade in manufactured goods, agricultural goods, and services.
The WTO must have new rules that meets the needs of the new commercial economy that has arisen since the establishment of the WTO. New trade rules for the twenty-first century are necessary for digital trade, trade-related aspects of intellectual property, competition, and investment facilitation.