Comprehensive Trade Agreement Research Articles

New Generation EU Agreements – The Basis for Future World Trade

International trade agreements contribute to the development of international trade and services. The European Union is currently modernizing the system and structure of international agreements related to international trade, investment and services. The aim of the scientific study is to clarify and identify the characteristic features of the agreements of new generation that are concluded between the European Union and non-EU member states. Based on the facts, we can confirm that trade policy supports, among others, values such as the protection of human rights, the protection of labor rights, the environment and the fight against climate change. Such an approach of the European Union to the liberalization of world trade through comprehensive trade agreements is also supported by the strategy of the European Commission „Trade for All”.

The Trade Effect of Non-tariff Measures in a Comprehensive Trade Agreement

The aim of this study is to quantify the trade effects of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which is considered to be a comprehensive trade agreement. To this end, we estimate the gravity equation for worldwide trade and introduce applied tariffs into this equation to differentiate between the trade effects of tariff reduction and non-tariff measure (NTM) changes. Our gravity equation results indicate that the trade effect of NTM changes under the CPTPP is insignificant on average and negative for most products. We also estimate the gravity equation for foreign direct investment (FDI) and find some evidence that the CPTPP increased FDI by a statistically significant amount. Thus, the NTM changes in the CPTPP may increase FDI, rather than trade, among member countries.

International trade and investment dispute settlement in the Asia-Pacific region: inspiring the new Asian regionalism

ABSTRACT The economic integration taking place among the Asia-Pacific countries is unique and transformative. The new Asian regionalism represents the collective power of the Asia-Pacific countries with ASEAN at its centre and a regime underpinned by hard law fostered by comprehensive trade and investment agreements. While ASEAN countries are committed to the ASEAN way of dispute settlement, the participation of the Asia-Pacific region in mega-regionals, such as the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Economic Partnership, has resulted in certain unique features with consultation, negotiation, and mediation forming an essential feature of dispute settlement within the Asia-Pacific region. While law is integral to the Asian regionalism, soft approaches including negotiation, conciliation, and mediation makes it distinctive, effective, and cohesive. This article examines how these evolving features of dispute settlement in trade and investment contribute to the Third Regionalism or the New Regional Economic Order.

THE IMPACT OF WHV (WORK HOLIDAY VISA) ON INTERNATIONAL LAW

The Minister of Trade, Enggartiasto Lukita held a collaboration program with the Australian Minister of Trade, Simon Birmingham, the Indonesia-Australia Comprehensive Trade Agreement (IA-CEPA). One of the results of the signing of a free trade agreement namely Australia with Indonesia is the addition of working and holiday visa quotas in Australia for eligible Indonesian youth. The Australian Government has confirmed that there will be an increase in the number of Working Holiday Visa (WHV) quotas prepared as part of the agreement. The total quota will reach 4,100 from the previous 1,000 in the first year, with an increase of 5,000 in six years. There are no research results that explain how the WHV is against the perspective of international law because this is a new thing. This is a challenge to discuss and how it affects the world. The method used in the preparation of this journal is the normative-juridical method. The program must be utilized properly because it will have a positive impact on Indonesia and notify the public, especially young Indonesians who want to go to Australia in order to take education and work

Articles: Deep trade integration and North-South participation in global value chains

Do comprehensive trade agreements increase the participation of States in global value chains (GVCs) and contribute to their development? Although there is extensive evidence in the trade literature that deep preferential trade agreements (PTAs) can increase States’ bilateral export of final goods and, by implication, contribute to local development, much less is known about the characteristics of this effect on GVC relations. This paper answers the question in the framework of a gravity model and uses a comprehensive dyadic data set on trade in GVCs, PTAs, export and other characteristics for 188 countries and economies between 1990 and 2018. Results provide robust evidence that deep PTAs increase members’ bilateral trade in GVCs over the long term, especially when these agreements involve at least one developing country or economy and include provisions that support investment. These results underscore that GVC-facilitating deep PTAs are a powerful policy tool that can mobilize the potential of production and trade in GVCs for development.

Competitiveness of Global Apparel Industry: A Study Based on Transaction Cost Theory

This article explores global competitiveness in the apparel industry and its implications on the competitive performance of China and Bangladesh through the lens of transaction cost theory (TCT). The study has been conducted based on qualitative method of social science research. The primary evidence for this study has been collected through semi-structured in-depth personal interviews with key resource persons in international trade. The study finds that rising competition in global apparel trade largely influences Bangladesh’s competitiveness in the apparel industry compared to China. However, China’s apparel industry faces challenges from rising production costs. It also finds that unrestricted trade flows among Asian competitors through bilateral and comprehensive trade agreements have severe implications on Bangladesh’s competitiveness in apparel sector, while trade protectionism remains the key barrier towards China’s share of exports in global apparel market. The findings of the study will be crucial for both Chinese and Bangladeshi policy makers and stakeholders to address existing impediments, including future challenges to gain a competitive advantage in their apparel exports. The study is among the first to compare the international competitiveness of apparel industries between the two major apparel exporting countries by using TCT.

The EU as a partner of ILO in trade negotiations. Explaining labour reform in Vietnam

ABSTRACT Can EU comprehensive trade agreements effectively promote international labour standards, despite their soft enforcement rules? And if so, under what conditions? This paper addresses these questions by focusing on a hard case study, namely Vietnam’s ratification in 2019 of the ILO Convention 98 on the right to organize and collective bargaining. Such a ratification is an epochal change for a mono-party regime lacking recognition of independent trade unions. This paper shows that the EU has emerged as a key partner of ILO in promoting international law in Vietnam and explains such a result from a political economy perspective. This case study provides insights into the extent to which a trade partner is dependent upon international trade increases the leverage of the EU, and especially the European Parliament, and ultimately affects the ability of the EU to emerge as a normative power through trade.

A Sceptical Analysis of the Enforcement of ISDS Awards in the EU Following the Decision of the CJEU on CETA

This paper provides a sceptical analysis of the enforcement of investor-state dispute settlement (ISDS) awards against the European Union or its Member States in a conflict with EU norms following Opinion 1/17 of the CJEU on the Canada-EU Comprehensive Economic and Trade Agreement (CETA). It argues that the CETA decision has obscured, but has failed to alleviate, three fundamental incompatibilities between sui generis doctrines of EU law and essential tenets of international investment arbitration. It is not at all clear whether the CJEU accepts the jurisdiction of the ISDS tribunal in Chapter 8-F of CETA to rule on a breach of CETA contrary to the CJEU’S interpretation of the validity of EU acts under the EU’s own rules, and the CETA decision does nothing to modify the formal procedures and doctrines by which the autonomy and supremacy of EU law have supplanted conflict of law norms permitting the application of arbitral awards over conflicting European law. The article cautions that Canadians may prove little better able to enforce arbitral awards against deprivations of CETA rights by EU norms than if the cjeu had simply ruled that the CETA Tribunal must be subsumed within the EU court system itself.

The independence and impartiality of the hybrid CETA Investment Court System: Reflections in the aftermath of Opinion 1/17

In its recent Opinion 1/17, the Court of Justice of the EU (CJEU) examined the compatibility of an external judicial body, the Investment Court System (ICS) under the EU–Canada Comprehensive and Economic Trade Agreement (CETA), with EU law. At a time when judicial independence has arisen as one of the main challenges for the rule of law in the EU, this article discusses the Court’s findings in relation to the compatibility of the ICS with the right of access to an independent and impartial tribunal.

Trade agreement depth, foreign direct investment, and the moderating role of property rights

In this study, we theorize that preferential trade agreements (PTAs) send two distinct signals to foreign direct investors. At the first tier, a PTA signals that member states will maintain stable and peaceful relations with one another, making overt host-state hostility toward investors headquartered in member countries unlikely. At the second tier, a PTA can signal that investments will be safe from subtler meddling that infringes on property rights. While any PTA sends the first-tier signal, only deep PTAs with provisions such as investor-state dispute settlement mechanisms and property rights protections provide this second-tier signal. The second-tier signal is especially important to investors in countries where property rights are weak, as the extra protections provided by a deeper agreement can substitute for those that are missing at the domestic level. We find empirical support for our argument: PTA depth is positively associated with FDI between member countries, but the association weakens as property rights laws in host countries increase in strength. These findings suggest that governments can attract higher levels of FDI through comprehensive trade agreements, as opposed to shallow PTAs, when domestic policies are not sufficient. However, shallow agreements suffice where domestic policy already protects property rights.

Development Time and Patent Extension for Prescription Drugs in Canada: A Cohort Study.

The Comprehensive Economic and Trade Agreement between Canada and the European Union provides for an extension of Canadian patents for prescription drugs by up to 2 years. One of the arguments advanced for longer patent time is to compensate companies for the length of the overall drug development time (the time between patent application and market approval). This study investigates overall development time in Canada for different groups of drugs approved between January 1, 2009 and December 31, 2018 and how many of these drugs are eligible for up to 2 years of patent term extension. Based on a list of patents and dates of market approval, the change in overall development time for all drugs was calculated along with whether there were differences in development time between different groups of drugs. Using Canadian patent filing dates, overall development time for all drugs went from a mean of 2240 days (95% CI: 1832, 2648) in 2009 to 4197 days (95% CI: 3728, 4665) in 2018 (analysis of variance [ANOVA], P<.0001). Using first global patent filing dates, overall development time went from a mean of 4481 days (95% CI: 3053, 5908) in 2009 to 6298 days (95% CI: 4839, 7756) in 2018 (ANOVA, P=.0118). There was a statistically significant difference in the overall development mean time between small molecule drugs (3553, 95% CI: 3361, 3746) and biologics (3903, 95% CI: 3595, 4212), (t test, P=.0487) when using Canadian patent filing dates but not when first global patent filing dates were used. There was no statistically significant change in overall development time among drugs that were substantial, moderate or little to none additional therapeutic value compared to existing drugs. Out of 238 drugs, 218 (91.6%) would have been eligible for patent term extension with 195 (80.7%) eligible for the full 2 years. Patent term extension does not appear to be justified based on changes in overall development time, except possibly in the case of biologics. There are also trade offs in terms of increased expenditures that need to be considered if patent terms are lengthened.

Trust and Support for Comprehensive Trade Agreements in the European Parliament

Abstract Comprehensive Trade Agreements (CTAs) constitute a new generation of free trade agreements, which challenge traditional models of trade preferences. To understand preferences toward CTAs I present a new predictor, trust in government, that explains support for CTAs in the European Parliament. I develop a unified framework that includes economic and noneconomic factors to explain trade preferences, and analyze support for three recent CTAs: the Transatlantic Trade and Investment Partnership (TTIP), the Comprehensive Economic Trade Agreement with Canada (CETA), and the EU-Korea Free Trade Agreement. Using an original dataset on trade voting and a multilevel model, I show that higher levels of citizens’ trust in government make Members of the European Parliament more likely to vote in favor of CTAs. My research offers a novel theoretical argument and insights on the connection between public trust and elite position-taking.

Does Investor-State Dispute Settlement Discriminate Against Nationals?

AbstractThis Article answers the question of whether investor-state dispute settlement (“ISDS”) discriminates against nationals by providing foreign investors with an extra avenue to challenge state measures. The complaint that ISDS is discriminatory as a matter of principle has surfaced before several European constitutional courts—including the German Federal Constitutional Court and the European Court of Justice—in connection with the ratification of the Comprehensive Economic and Trade Agreement between Canada and the European Union (“CETA”). This Article rejects this complaint. The Federal Constitutional Court was able to leave the question of discrimination open in the applications for a preliminary injunction to stop ratification. It will have to take a stand, however, in the principal proceedings. If the Court were to side with the applicants, it would sound the death knell not only for the CETA in its present form, but also for the multilateral investment court system promoted by the European Union and, in particular, Germany. The point made by the applicants in the CETA complaint is not only of importance in a European constitutional law context. Whether ISDS is per se discriminatory is a fundamental issue which requires answering before any reform steps in relation to ISDS are addressed.

Opinion 1/17 (C.J.E.U)

On April 30, 2019, the Court of Justice of the European Union (CJEU) rendered Opinion 1/17 on the compatibility with European Union (EU) law of the Investment Court System (ICS) under the Comprehensive Economic and Trade Agreement between Canada and the European Union and its member states (CETA). In a momentous decision that is likely to have consequences beyond the CETA, a full court of the CJEU held that the ICS provisions were compatible with EU law.

De-Europeanisation of UK regulatory governance and the future UK\u2013EU trade relationship

With the exception of obligations during the transition period until the 31 December 2020, the UK will leave the EU Single Market and will need to negotiate a new regulatory framework for its future trade relationship with EU. The primary issue for the UK will be how much market access it will want to secure and what regulatory obligations will it be required to comply with in return for this. During EU membership, integration led to the UK’s regulatory framework becoming Europeanised which ensured the removal of trade barriers and provided for a level playing field of regulatory governance through harmonisation of technical standards and public policy objectives such as environmental standards or employment protection. As part of the future UK-EU trade relationship, the EU will be likely to insist on continuity of high levels of regulatory alignment, but the UK has indicated that it wishes to diverge from EU rules, leaving significant challenges for the UK-EU trade negotiations. This article considers the opportunity for the UK to de-Europeanise its regulatory governance after Brexit and whether and to what extent this will be compatible with negotiating a comprehensive trade agreement with the EU.

Die Zukunft umfassender und gemischter Abkommen der EU nach dem Singapur-Gutachten

The article explores some legal issues regarding comprehensive trade and mixed agreements of the European Union (EU). The concept of mixed agreements is special to the EU legal order and under strain after the opinion 2/15 of the Court of Justice of the European Union of 16 May 2017, in which the Court defined the exclusive competence of the EU for concluding “EU-only agreements” in the context of the common commercial policy. This led to a split-up of trade agreements of the Union into “EU-only agreements” and mixed agreements on investment issues whereas no change of policy had been established for association agreements to date. Besides creating greater legal certainty, some problems remain regarding the to-be-improved acceptance of EU free trade agreements in the Member States. The analysis focuses on the division of powers between the EU and the Member States and its impact on mixed agreements on a political and legal level. It concludes that “mixity” has not been ended by the jurisprudence of the Court of Justice and can still be seen as a useful tool in the process of negotiating and concluding future comprehensive international trade and association agreements.

Overlapping Negotiations, Conflicting Interests? EU-Singapore Negotiations

In 2013, the European Union (EU) concluded its first comprehensive trade agreement with a Southeast Asian partner. The EU-Singapore agreement (EUSFTA) was meant as a blueprint for further negotiations in the region and indeed it was paralleled by trade talks between the EU and other members of the Association of Southeast Asian Nations (ASEAN). Given the significant challenges and roadblocks the EU faced in concluding both inter-regional and bilateral trade deals in Asia prior to the EUSFTA, the conclusion of this agreement can be understood as a significant success. However, this success has come at the cost of a shift in EU external relations away from the promotion of its own foundation norms of human rights, rule of law and democracy. This shift has had a deleterious effect on the EU’s legitimacy, founded on upholding these norms, both internally and in the Asian region. As a blueprint agreement, the EUSFTA can be analyzed to understand how this shift in the EU’s external relations will shape the EU’s wider trade policy in East Asia as well as the future of EU-Asia trade relations. This working paper will explore these negotiations and argue that the EU unbundled trade policy from its rights-based foreign policy in the EUSFTA. We argue that this creates significant opportunity for Singapore and other Asian states, but also presents a critical risk to the EU’s foundation norms, which were compromised in the EU’s negotiation of the EUSFTA.

THE SUI GENERIS NATURE OF THE COMPREHENSIVE ECONOMIC AND TRADE AGREEMENT BETWEEN CANADA AND THE EUROPEAN UNION

The Comprehensive Economic and Trade Agreement between Canada and the European Union (CETA) due the contracting parties include a large number of involved countries, which fact creates an ambiguous possibility of various implications in the worldwide business practice considering the different national legal systems. In my paper I am using a deductive approach to the relationship between the theory and the research with an emphasis on the two research questions: Why the ISDS (Investor State Dispute Settlement) from CETA sparked the greatest attention?, and What is causing the legal discrepancy between the CETA’s provisions on hard copy and the possible implementation in business practice?. My paper is focused on the implications from the CETA’s concluding in the business practice, taking into consideration that CETA is a combination of strengths and weaknesses, opportunities and possible threats.

The evolution of Canada’s cultural exemption in preferential trade agreements

ABSTRACT Long concerned about its cultural identity in light of dominant American entertainment exports, when Canada concluded its first preferential free trade agreement (FTA) with the United States in 1987, cultural industries were exempted. This general exemption, albeit coupled with a retaliatory clause, was later incorporated into the North American Free Trade Agreement and recently updated into the Canada-United States-Mexico Agreement. Such a cultural exemption, this time unconditional or without provisions for retaliation, has also figured in most Canadian FTAs. Yet, in the Comprehensive Economic and Trade Agreement negotiated with the European Union, the Trans-Pacific Partnership Agreement negotiated with the United States and ten other countries, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership implemented with these ten countries, Canada does away with an outright cultural exemption. Instead, these FTAs provide for a more targeted exemption, applying only to the chapters or sectors for which such an exemption is sought. Although this marks a departure from a well-established practice, this move is not so radical, as some analysts of Canadian cultural trade policy claim. Such “chapter-by-chapter” approach may indeed be as efficient to preserve cultural industries from key international trade obligations.

Brexit under Scrutiny in EU Member States: What Role for National Parliaments in Austria and Germany?

Among national parliaments (NPs) in the EU, the Austrian Nationalrat and the German Bundestag stand out as strong legislatures in EU affairs. Both parliaments have used their rights to great extent in recent EU negotiations on international agreements such as the one with Canada on a Comprehensive Economic and Trade Agreement. Yet, in the negotiations with the UK their involvement varies. Why is this so? Scholarly work on Brexit so far focused on the European Parliament or the UK parliament, while attention to NPs in the EU27 is scarce. This article fills this void in research by tracing the Austrian and German parliaments’ activities in the Brexit negotiations. Despite similar institutional strength I find that the German Bundestag is more extensively involved, particularly on an informal level, compared to the Austrian Nationalrat. The reason for this is Brexit’s varying saliency in these two countries given their different levels of exposure to the UK’s withdrawal. As saliency of a policy issue is considered a major explanatory factor for why NPs engage in EU affairs, the results of this article confirm this expectation within the realm of EU international negotiations.