Regional Trade Agreements and the WTO: An Analysis of the Efficacy of the Asean-China Free Trade Area (ACFTA) Forum Selection Clause in Resolving Jurisdictional Conflict

Abstract

The last decade has seen an exponential growth in the formation of regional trade agreements (RTAs) and the development of regional dispute settlement mechanisms (DSMs). One of the most significant RTAs is the nascent ASEAN-China Free Trade Area (ACFTA) which has set-up its own untested DSM. There is often considerable overlap between a World Trade Organisation (WTO) Member's treaty obligations under a RTA and under the WTO covered agreements. Accordingly, it is not uncommon for a single trade dispute to give rise to claims for breaches of both regional and WTO treaty obligations. The WTO has a tested DSM for the adjudication of disputes under its multilateral agreements. Nevertheless, the rules it can and will apply to resolve jurisdictional conflicts with regional DSMs remain unclear. This paper explores the propensity for jurisdictional conflict between the WTO and ACFTA DSMs. It then examines the extent to which such conflict can be resolved by the forum selection clause of the ACFTA and the application of Article 41 of the Vienna Convention on the Law of Treaties (VCLT).