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Economic interventionism in the form of subsidization and operation of state-owned enterprises (SOEs) is today among the main frontlines of international trade conflicts. Along with trade restrictions and new legislation designed to impact cross-border investment, mergers, and acquisitions, the use of subsidies and countervailing measures by governments and trade-distorting effects of SOEs have lately caused harsh controversies within and outside the World Trade Organization (WTO) between its members. Going forward, there are reasons to expect these tensions to intensify rather than diminish in number and importance. This Special Issue aims at examining the development of international trade rules regulating state interventionism against the background of the Covid-19 global pandemic and present shifts in global geopolitics and the economy. This introduction, in presenting the state of the art on the questions tackled by this Special Issue and highlighting its contribution to existing literature on the topic, offers different considerations aimed at bringing together various trends emerging from the Articles contained in this Special Issue. It also explores avenues for further research and reflection.
This Article contributes to the discussion about the development of international trade regulation of state interventionism by situating the tensions that exist about the future design of subsidies and state enterprises treaty regulation in the broader context of current systemic challenges to the multilateral trading system. While recent studies have explored the issues of subsidies and state-owned enterprises (SOEs) as one of the most significant in impact among the contemporary challenges to the WTO, there is certainly scope to discuss further such a problem from the broader point of view of the crisis of the multilateral trading system, its systemic challenges and the concomitant increasing politicization of international trade relations. To this end, this Article analyzes the interactions between the lasting decline of the WTO, growing political interferences with international trade flows and the prospects of reforming multilateral trade rules to address its systemic challenges and manage/mitigate newly central problems of the 21st century such as the Covid-19 Pandemic, climate change and the greening of economic production and international trade. The Article argues that existing WTO rules are not adequate to address these challenges and problems. It concludes that, like in the GATT era, it is only the spirit of pragmatism that may provide chances to find alternatives to growing frustration with negotiating inaction and, hence, to reform the system. However, the question remains whether it is possible to find an approach to imagine, remodel and craft multilateral rules that are sensitive to different economic, political, and social choices and able to rebalance the position of all members, large and small, rich and poor.
This Article discusses existing WTO rules on subsidies and state enterprises, relevant caselaw and reform prospects in light of key geopolitical developments and changes in the global economy emerging in the aftermath of the Covid-19 pandemic. Following a general introduction, the Article critically analyzes present WTO rules on industrial subsidies, focusing inter alia on the new problems raised by activist industrial policies pursued by global trading powers, foreign subsidization, the climate change shock and environmental exigencies. It then shifts attention to the application of WTO rules on subsidies to the state sector and the increasing demands for new international trade rules on non-subsidies measures to address the negative spillover effects on trade from government influence on state-owned enterprises (SOEs). With respect to each of these matters, the Article first clarifies the terms of the problem in relation to existing WTO rules and caselaw, and next examines the question of how, and to what extent, “deeper” free trade agreements (FTAs)—those that experts designate as models for WTO reforms on the matter—establish new rules that permit to adequately address the trade concerns raised by SOEs’ commercial and financial activities. Based on this multi-layered analysis, the article concludes by examining prospects of reform of WTO rules on state interventionism.
State-owned enterprises (SOEs) have long constituted, and are likely to remain, an important instrument in any government’s toolbox for a variety of economic and societal goals. However, the significant extent of state ownership among the world’s top companies, and the quantitative and qualitative transformation and hybrid nature of SOEs, raises the issue of their impact on international trade flows and the competitive process. This article addresses the question of how international trade agreements regulate SOEs, with a view to furthering the international contestability of markets, while, at the same time, allowing governments to provide support to SOEs as a means of dealing with market failures and the pursuit of public goals. After a brief introduction to contemporary state capitalism, the argument is developed in three main parts. The first part situates SOEs within the GATT and WTO frameworks and elaborates on the findings of previous literature with a view to highlighting the main shortcomings of such discipline. The second part re-examines the notion of ‘competitive neutrality’ by locating contemporary trade agreements within the larger contextual relationships between the state, the market, and the social, and thus reconstructs the normative rationales and general policy implications of the disciplines under examination. Against this background, the third part critically assesses the new disciplines on SOEs in recent preferential trading areas (PTAs). The main conclusion is that the search for binding rules has not led to balanced regimes and, despite the wider scope of the new rules, notable problems that have emerged within the WTO context remain unsolved.
The transnational characteristics of money laundering and terrorist financing have forced international and regional organizations to actively cooperate in the development of a countering framework. The Financial Action Task Force on Money Laundering (FATF) and its recommendations have played the most significant role in the development of the European Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) Directives. The Directives’ primary elements are the criminalization of money laundering and terrorist financing and the preventive duties of the private sector. This chapter will evaluate the history of the current AML/CFT legislation and highlight certain specifics, such as the eff ectiveness, transparency, risk-based approach (RBA) and the challenges with respect to fundamental rights and freedoms.
THE EMERGENCE OF A GLOBAL APPROACH TO COUNTER MONEY LAUNDERING AND TERRORIST FINANCING
The evolution of technology and internationalization of the financial market go hand in hand with burgeoning criminal finance (Pieth 2004). The number of cross-border financial transactions has multiplied rapidly, thanks to the speed with which businesses can transfer large amounts of money, with a click of the mouse, to anywhere in the world (Fijinaut 2000). Together with other financial instruments, such as bank-to-bank loans, international mortgages and over-the-counter derivatives, this may ease the commission of financial offences. With the cross-border dimension of the transaction, national legislation and enforcement authorities often fall short in fighting this kind of illicit behaviour. It is, therefore, unsurprising that money launderers and terrorist financiers have little difficulty in finding loopholes in domestic jurisdictions. Evidently, the fight against these crimes requires an international approach, which encompasses cooperation and the implementation of international legislation (Mitsilegas 2003; Gilmore 2004).
Mature, transnational criminal organizations are a big concern, as they “have developed extremely complex organizational structures, reminiscent of multinational corporations […] designed to maximize profits and minimize risks” (Gilmore 2004). Even though these organizations appear most effective in their home states (Europol 2013), because of their long-established networks, they are often involved in cross-border crimes to maximize their profits.
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