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This paper offers a comprehensive study of the jurisprudence on the ‘as a result of unforeseen developments’ test under the WTO's safeguards (SG) rules. It contributes to the existing scholarship by making three fresh arguments. First, the Appellate Body's decision to ‘revive’ this test as a prerequisite for the application of SG measures is not necessarily incompatible with the drafting record of the SG Agreement, even though this agreement does not make explicit reference to the test. Second, the test is not excessively difficult to satisfy under the standard of review established by case law, even though governments failed to pass it in almost all SG disputes to date. Third, in sharp contrast, the recent US–Safeguard Measure on PV Products decision took a strikingly more deferential approach which fell far short of the established standard of review, leading to the first and only decision in which the test was found to be satisfied. This decision has arguably created a new standard which could lead to abuse of SG measures and damage to the dispute settlement system and hence should be avoided in future disputes.
What is the relationship between the global economy and international law? In this chapter, we examine instruments that reflect the liberalism that has prevailed in international trading relations for the last half-century. The resulting instruments include the articles of the World Trade Organization, the World Intellectual Property Organization, and the Trade-Related Aspects of Intellectual Property Agreement. We also highlight anti-corruption instruments and various non-governmental organizations that also share the goals and processes of international liberalism. The middle section examines attempts to combat the various and increasingly sophisticated forms of corruption in international business transactions, especially the explosion of difficult-to-combat cyber fraud. The latter part of the chapter notes a growing trend towards economic nationalist goals, and anti-competitive behavior among state and business elites.
Chapter 1 introduces the main theme of the book, that is, challenging the conventional wisdom that the existing WTO rules are inadequate to address China’s state capitalism and demonstrating that China’s WTO-plus obligations, coupled with the general rules on subsidies, do provide ways to address the problem. It also provides summaries of the chapters to explain the structure of the arguments in the book.
This chapter introduces ideas and controversies in international law scholarship on business and human rights. Furthermore, it determines the legal limitations for the EU and its Member States when regulating and remedying rights violations committed by corporations from emerging and developing states. To begin, domestic measures with extraterritorial implications are discussed. Import-restrictive measures also appear an attractive solution for states that are increasingly expected (or obliged) to rein in ‘their’ corporate nationals when they violate rights in third states. Such measures allow states to create an artificial level playing field that enforces the same standards across all corporations that operate in its market. Linking rights to trade concessions is, however, contested. The International Labour Organization and World Trade Organization regimes are discussed. Finally, it is explained that each state has acted unilaterally in developing the rules governing the use of civil adjudicative jurisdiction. Support for local remedies by the extraterritorial state does not distinguish between local and foreign corporations. A cost-benefit critique of extraterritorial remediation over foreign corporations is also presented.
This chapter aims to investigate the extent to which the Netherlands has attempted to rein in transnational corporations from developing and emerging states by imposing requirements as a matter of regulatory compliance, either directly as an obligation formulated in a rule, or indirectly by offering corporations the opportunity to defend against civil violations. Section 1 of this chapter examines the Dutch Child Labour Duty of Care Law (2019). An evaluation of the parliamentary debates increases our understanding as to whether and to what extent competition from non-Dutch corporations – and, in particular, transnational corporations from developing and emerging states – in the global marketplace has had an impact on the stringency and reach of this legislative initiative. Section 2 discusses the (largely hypothetical) avenues available to bring claims against transnational corporations from developing and emerging states in Dutch courts.
One major issue facing the world trading system today is how to deal with the challenge of China's state capitalism. Many commentators believe that the existing WTO rules are insufficient and, thus new rules are needed. This book challenges this conventional wisdom. Through meticulous studies and fresh analysis of the commitments in China's WTO accession package, existing rules on state capitalism in WTO agreements and recent attempts to make new rules on these issues at the bilateral, regional and multilateral levels, this book argues that existing WTO rules, especially those on subsidies, coupled with China-specific rules in its accession protocol, do provide feasible tools to counter China's state capitalism. This book also discusses the reasons for the lack of usage of these rules and provides concrete policy suggestions on how the rules may be better utilized, as well as how to conduct constructive negotiations on new rules in the WTO and beyond.
The recently adopted Trade-Related Aspects of Intellectual Property Rights (TRIPS) waiver decision at the World Trade Organization is a grossly inadequate and insincere response to the COVID-19 pandemic. This paper criticizes the TRIPS waiver for being faulty on several fronts such as: excluding COVID-19 diagnostics and therapeutics from its fold and focusing only on COVID-19 vaccines; restricting its coverage to only patents and leaving out other intellectual property rights; excluding developed countries that possess manufacturing and technological capability from being eligible exporters of COVID-19 vaccines; and its perplexing silence on the transfer of technology. It will have negligible impact on fighting the pandemic, sets an enfeebled example for the future, and is a classic case of “too little too late”.
In the wake of the demise of the WTO's Appellate Body, there has been a growing trend of states resorting to the dispute settlement mechanisms under their regional trade agreements (RTAs) to resolve international trade disputes. While the vast majority of these mechanisms have never been used, many contain defective procedural provisions that are likely to slow down or completely derail the dispute settlement process should those provisions be invoked. This is particularly true of mechanisms that effectively permit a respondent to block or delay the composition of a panel to hear a dispute. This article examines the issues of ‘panel blocking’ and panel composition delay tactics in RTA dispute settlement with reference to both past and present practice, and provides a textual analysis of a cross-section of existing RTAs to identify procedural defects and prescribe solutions for ensuring timely panel composition in future disputes.
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.