Judicialization of the World Trading System : Implications for Regulation of Regional Integration under GATT/WTO

Abstract

With the creation of the World Trade Organization(WTO)in 1995, the world trading system organized in 1947 was infused with new life. Rules regulating world trade have developed both in the scope of coverage and in the depth of intervention. Much have been learnt of the legalization and judicialization process of change in the history of world trade rules. The process culminated in the finalization of the Uruguay Round negotiations. This outcome at the Uruguay Round negotiations has been described in comparative terms as the triumph of lawyers over diplomats. However, the outcome means more than a mere institutional and procedural development. Legalization and judicialization may be characterized with the multiplication of legal norms and the strengthening of the binding nature of these norms and the procedures for enforcing them. Built on this general conception of the present international trade law, this paper is going to examine the impact which the process of legalization and judicialization of the world trading system has on one particular aspect of the international economic relation, namely multilateral regulation and control over establishment of regional economic arrangements. Long before the development of a trade legal system at the multilateral level, attempts among a number of mostly nations of vicinity to enter into some sort of customs unions took place mainly in Europe or under European auspices. In this sense, GATT 1947 could be viewed as one of the original efforts taken multilaterally to liberalize international trade amidst a long history of economic bloc cultures. For pragmatic political reasons, liberalization under GATT and the defunct International Trade Organization(ITO)had to proceed hand in hand with certain accepted categories of regional arrangements . Therefore, the issue of regional arrangements, regulated under Art.XXIV of GATT, as an exception to the fundamental principle of the most-favoured-nation(MFN)in the international trading system, originally took place in a particular historical and political context. The regulatory mechanism established under Art.XXIV of GATT 1947 left examination of the compatibility of concrete regional integration agreements with GATT provisions to the GATT diplomats. However, mainly since the 1990s discussions related to rules on regional arrangements have also taken place in the WTO dispute settlement organs. Is this