The Development of the Regulation of International Trade

Abstract

International trade regulation based on agreement and the MFN principle has developed from bilateral FCN agreements to a multilateral arrangement under the GATT with diverse ancillary decisions, understandings, and agreements, to its modern form of comprehensive multilateral agreement under the WTO. A critical part of trade regulation has been the role of dispute settlement where under the WTO the Appellate Body became the authoritative decision-maker on the scope or ambit of the obligations under the WTO agreements. However, since the WTO, preferential trade agreements have proliferated at the bilateral, regional, and plurilateral levels, often deepening the areas of obligation from those under the WTO or expanding to new areas not covered by the WTO agreements. Most recently, this has taken the form of a mega-regional arrangement, the TPP, transformed into the CPTPP, characterized by the number of parties and the size of markets and coverage of areas not found in the WTO or other trade agreements, and without a constitutional role being granted to dispute settlement. The future of international trade regulation, given the present economic and political conditions, is uncertain. The comprehensiveness of mega-regulation is a model, but a reinvigoration of the WTO is unlikely. Retrenchment to traditional bilateral or small-scale regional forms of regulation of much narrower scope cannot be ruled out.