Trade Regime Research Articles

The Dejudicialization of International Dispute Settlement: A Paradigm Shift in International Economic Law?

The objective of this article is to reflect on the rise and decline of judicialization in international trade and investment regimes and explore the future of international economic dispute settlement. It makes three key arguments. First, the severe disjuncture between anticipated benefits of international dispute settlement and the actual costs imposed on states explains the emerging trend of dejudicialization in international economic law. Second, at least to some extent, dejudicialization is likely to be a staple feature of international economic law in the new era of deglobalization, climate crisis, and great power rivalry. Third, judicialization of international dispute settlement will not demise but substantial transformation is necessary to meet contemporary challenges.

The Scrutiny of States’ Climate Change Action under WTO Law and International Investment Agreements

Abstract The urgency of the fight against climate change is significantly shaping also international economic law. It is herein investigated how international climate change treaties, such as the United Nations Framework Convention on Climate Change (UNFCCC) of 9 May 1992 and the Paris Agreement of 12 December 2015 may be successfully integrated with the World Trade Organization (WTO) covered agreements and international investment agreements (IIAs). While the international trade and investment regimes were originally designed primarily for the vindication of economic concerns, they can already provide sufficient legal avenues for the affirmation of States’ climate commitments and efforts, such as the reliance on general exceptions applicable to environmental matters. In particular, trade and investment treaties must be interpreted pursuant to systemic integration as required by Article 31(3)(c) of the Vienna Convention on the Law of Treaties (VCLT). As a result, multilateral treaties addressing climate change do constitute a hermeneutic basis against which adjudicators may assess the respect or the breach of economic and commercial treaties under international law. Within this framework, unilateral climate change action by States (or by the European Union) that furthers the “ambition cycle” set forth by the Paris Agreement may withstand the scrutiny of the WTO Dispute Settlement System (DSS) and international investment tribunals but for a finding of discriminatory, arbitrary, unreasonable, selective or protectionist application.

RESOLVING TRADE DISPUTES IN A GLOBALIZED WORLD: THE EFFICACY AND CHALLENGES OF THE WTO DISPUTE SETTLEMENT MECHANISM

The World Trade Organization (WTO) stands at the heart of global trade governance, providing a framework for the liberalization and regulation of international trade. Central to its mandate is the Dispute Settlement Mechanism (DSM), which ensures that trade rules are respected and disputes are resolved in a structured, legal manner. This mechanism, often described as the "crown jewel" of the WTO, underpins the organization's credibility and facilitates a rules-based trading system. Yet, as international trade becomes increasingly complex, the WTO DSM faces significant challenges, necessitating a comprehensive reevaluation of its operations, relevance, and adaptability.

Weather shocks affect trade policy: Evidence from preferential trade agreements

AbstractWe show that weather shocks affect government trade policy decisions. We exploit variation in rainfall during the growing season within and across countries to show that weather shocks impact agricultural output and trade. Using information on tariff cuts by commodity from preferential trade agreements signed between 1995 and 2014, we then show that weather shocks that happen during the negotiation period correlate strongly with the size of tariff cuts. When weather shocks increase (decrease) a country's capacity to produce a given crop, its government negotiates a smaller (larger) tariff cut. These results are consistent with a political economy trade model with sector‐specific inputs in which the government places more weight on producers relative to consumers in its objective function. They also reveal that governments update their beliefs about domestic agricultural production capacity in response to weather shocks.

ANALYSIS OF THE GEOGRAPHICAL FACTORS INFLUENCING CHOICE OF INFORMAL FISH TRADE ROUTE AND DESTINATION BY FISH TRADERS BETWEEN MALAWI AND NEIGHBORING COUNTRIES

Choice of trade route and destination by cross border traders is an important decision in today’s increasingly cross border trade of products including fish. The current study examined the geographical factors influencing choice of informal trade route and destination by fish traders. Both qualitative and quantitative approaches were adopted for the study. These included semi-structured questionnaires through personal interviews and key informant interviews with fish border inspectors. Data was analyzed through various techniques for trader’s choice and destination. Specifically, principal component analysis and spearman correlation, and Huff’s gravity model were used to identify significant factors influencing choice of trade route and destination, and market attractiveness, respectively. Fish traders bypass official border posts using informal routes connecting the main route before and after the border post. Despite attempts and awareness about formal trade, stringent regulations forced fish traders to use informal trade routes. However, investigations into choice of trade routes and destination found that route distance, presence of alternative destination, mode of transport, demand of the fish product, and personal safety and risks were the factors influencing choice of both trade route and destination by informal fish traders. This geographic analysis provides a basis for addressing challenges in informal cross border trade in Malawi. It is recommended that strategic efforts and investments should be made in the development of transportation infrastructure, such as roads and railways to improve connectivity between secondary routes and one stop border post. The government should also intensify awareness initiatives on COMESA simplified trade regime (STR) to encourage informal traders to transition to the formal sector through use of formal routes.

The regime complex for digital trade in Asia and China’s engagement

AbstractThe rapid development of information and communication technologies over the past two decades has resulted in profound transformations in traditional economic and trade activities, leading to the scaling of digital trade across the Asian region and beyond. Drawing on the conceptual framework of the regime complex, this article seeks to delineate the main features of regional digital trade governance in the Asian region and China’s engagement with the regime-building process in this policy field. It demonstrates that the digital trade governance landscape in Asian countries comprises a collection of partially overlapping and nonhierarchical regimes, where different regional actors are formulating competing visions and approaches to digital trade governance. In addition, the dynamic nature of the digital trade regime complex in Asia and China’s evolving approach to digital trade governance is mutually constitutive. By selectively liberalizing in certain contexts while remaining conservative in others, China contributes to a more complex and less cohesive regional digital trade environment. China’s emphasis on standard-setting efforts and security considerations introduces additional complexities to the regime complex, potentially impeding the development of comprehensive governance regimes for digital trade in the region.

Statutory principles governing director conduct when a company is in financial distress – a Trans-Tasman comparison

ABSTRACT The spotlight has recently been shone on the statutory duties of directors of companies in financial distress in Australia and New Zealand. In Australia, the 2023 Report on Corporate Insolvency noted concerns about the efficacy of the Australian insolvent trading regime and mooted the possibility of Australia adopting the United Kingdom ‘wrongful trading’ standard. In August 2023 the New Zealand Supreme Court delivered a much-anticipated judgment in Yan v Mainzeal Property and Construction Limited (in liq) focusing on the equivalent reckless trading duties, prompting the question of whether the New Zealand approach may offer useful insights for Australia and the United Kingdom. This paper provides a comparative analysis of the ‘insolvent trading’ provision in Australia, the ‘wrongful trading’ provision in the United Kingdom, and the ‘reckless trading’ provisions in New Zealand, considering these provisions against the backdrop of related statutory provisions and broader policy considerations and objectives.

China in global digital trade governance: towards a development-oriented agenda?

Abstract Existing literature on the behaviour of rising powers in global trade governance has yielded inconclusive evidence about their role and impact. This article contributes to this literature by examining China's role in global digital trade governance, an issue area which so far has not received sufficient scholarly attention. Specifically, it addresses the following question: as a self-proclaimed leader of the developing world in digital development, to what extent do its preferences and negotiation approach align with the interests of other developing countries? Analysing China's participation in three sets of negotiations using process tracing, the article argues that China's dual identity both as a self-identified developing country and as a rising power has contributed to its strategic ambivalence. In principle China supports a development-oriented approach to digital trade governance, calling attention to issues such as the digital divide and preserving developing countries' policy space on data localization consistent with its domestic regulatory approaches. Yet China's interest in promoting Chinese technology firms' global expansion leads to increasing divergence with other developing countries on issues such as the e-commerce customs duty moratorium and the global taxation of digital firms, paradoxically increasing its interest alignment with developed countries and limiting its support for fundamental reforms.

Chinese Multinationals and Europe’s Geoeconomic Turn: The De‐Globalization of the Chinese ICT and Automotive Industry?

Amid increasing geopolitical tensions between Western powers and China over the alleged state-capitalist nature of Chinese corporate internationalization, European governments have introduced a set of political measures tightening their trade and investment regimes on grounds of national security and economic competitiveness. This article analyzes how this “geoeconomic turn” in Europe affected the internationalization of (state-backed) Chinese firms into Europe and hence the establishment of Sino-European corporate relations. With a focus on the Chinese ICT and automotive industries, we zoom in on corporate internationalization by distinguishing two modes: (a) outward foreign direct investments (greenfield investments and mergers and acquisitions) and (b) the formation of collaborative ties (strategic alliances and joint ventures) with European companies—a hitherto underexplored form of Sino-European corporate relations. Our analysis is predicated on a comprehensive dataset consolidating information on both modes of internationalization for the period 2000–2023. We show that, in relation to investment numbers, Chinese companies continue to expand into Europe, even if values are decreasing. We also find that the formation of collaborative ties (strategic alliances and joint ventures) has not halted but increased in the wake of Europe’s geoeconomic turn, indicating a further intensification of Sino-European corporate relations, though under the radar of tightening investment policies and mechanisms. When unpacking the variegated impact of the geoeconomic turn on Chinese companies’ internationalization strategies in Europe, our study also finds, however, that its ramifications vary substantively—not only per sector but also among companies exposed to varying degrees of party-state permeation. Applying a novel fine-grained measure to party-state permeation, the article shows that the geoeconomic turn seems to have affected predominantly those leading Chinese firms with a high party-state exposure.

A friend indeed to friends in need? China's trade regime and Covid-19 vaccine diplomacy

Employing newly available data on Chinese Covid-19 vaccine deliveries for a cross-section of 157 countries, we examine if China's vaccine diplomacy is driven by altruistic, enlightened self-interested motives or by purely strategic motives. According to the enlightened self-interested logic, China's vaccine supply would coincide with helping countries dependent on China for trade, i.e. its trading friends, while the strategic logic would entail providing vaccines to countries important commercially to China. In other words, the gravity of the Covid situation would be leveraged by China for strategic gain. Utilizing the logit estimator on probability of receiving vaccines from China and Tobit estimator on vaccine purchases and donations, we find that developing countries that are important to China's trade, and thereby, China's own commercial interests were less likely to get vaccines compared with countries that are more dependent on China. Furthermore, we find that countries more dependent on China are also likely to receive vaccine donations rather than purchases, suggesting that vaccine diplomacy was unlikely to be for commercial and strategic gain. Our results taken together signify that vaccine deliveries by China were not manipulated by trade interests in Beijing. The results suggest instead that China supplied vaccines to countries needing them and with whom Chinese goodwill reflects a more normal course of diplomacy—to service friends in need.

Developments in US Trade Policy Amid the Shifting Dynamics of World Trade

Today, world trade stands at a juncture. The proliferation of unconventional, unilateral trade policies calls into question the fundamental legitimacy of the World Trade Organization (WTO). To date, the global trading system evolved alongside a plethora of exogenous factors, such as the US-China competition. The political realities came to reveal the inadequacies of the existing trading regime to receive unique non-market economies (NMEs) like China in the world market. To better withstand the changes in world trade, the US resorted to unconventional, unilateral trade tactics. But how exactly did we get here? This study argues that the root cause can be found in the developments in US trade policy under each US presidency. The study’s findings demonstrate that the overarching goal of US trade policy has remained remarkably consistent across different presidencies in terms of countering the rise of China. Along the way, the incumbent president’s different priorities and political ideals, and the sustained impact of China’s accession to the WTO, induce profound changes in US-China relations and, at large, the world trading system. In short, this article aims to provide a policy-wise explanation to the current conundrum in world trade by following the developments in US trade policy since China’s accession to the WTO.

How do we make trade policy in Britain? How should we?

AbstractSince Brexit, the UK has been responsible for its own trade policymaking rather than inputting into the collective policy of the European Union. This paper starts by sketching how that policy has been developed and implemented and how it is turning out. Overall, it is not very complimentary about the UK Government's efforts and so it then moves on to consider how we might do better. One dimension of this is how trade policy could be made more inclusive in formulation. I propose three (sets of) institutional reforms: increasing Parliamentary (and other) scrutiny of the government's trade policy plans; after examining how the UK public thinks about trade policy, it asks whether (how) one should take into account public attitudes to trade policy issues; finally, it argues for creating an independent source of advice and analysis on trade policy. It concludes by noting that while recent history has been disappointing, trade policy by any government would be improved by the reforms recommended.

Regulatory autonomy in digital trade agreements

Abstract Digital trade agreements have become integral fora for regulating cross-border digital commercial transactions, including data flows. Deeper commitments in the area of digital trade have however raised serious concerns over the erosion of countries’ regulatory autonomy, prompting the inclusion of an array of safeguards within these treaties. This article undertakes a comprehensive examination of these safeguard mechanisms, which include carve-outs, transition periods, the right to regulate, and exception clauses. By shedding light on the nuances of these safeguard provisions, as well as their complex interplay with commitments made, the article provides a deeper understanding of the evolving dynamics of digital trade governance and its implications for national regulatory autonomy. Based on existing jurisprudence and legal doctrine, the article also tests the scope of the provided policy space, the trade-offs between flexibility and legal certainty, and examines how future-proof the bounds of regulatory autonomy are, considering the highly fluid technological environment.

The Impact of Global Digital Trade Governance on Multinational Corporations

The Impact of Global Digital Trade Governance on Multinational Corporations

Trade war: the steel and aluminum markets and the trade governance

The international institutionalism has been under debate. The World Trade Organization (WTO) has not been immune to strong criticisms that has been exacerbated in recent years. A turning point in this process was the trade war between the United States and China that began in 2018. It was characterized by tariff increases that persist. The contribution of this work is to show how these measures taken by relevant global players (such as the United Sates and China) have significantly affected the international markets and it impacted on third countries, not only in terms of trade flows but also when considering the international trade regulatory framework. The drop in the demand from the United States implied a fall in the global demand that caused a fall in international prices. Moreover, it is shown that Trump's measures were successful given that China was substituted by other suppliers. Finally, his protectionist strategy against China, was accompanied by a broader strategy against the World Trade Organization by blocking not only the negotiations during the Buenos Aires Ministerial Conference but also the Dispute Settlement System.

STUDY OF DWELLING TIME AT TANJUNG PERAK HARBOR SURABAYA INDONESIA

The research aims to determine the factors that influence dwelling time at Indonesian ports so that the government can make policies for releasing imported goods at ports more quickly and efficiently. This study uses secondary data obtained from KPPBC TMP Tanjung Perak quantitative data in the form of monthly pre-clearance, customs clearance, post-clearance, and dwelling time processing times from January 2020 to December 2022. Statistical analysis using the linear regression method uses the application SPSS. Based on the results of the analysis of the factors that influence dwelling time, it is concluded that the pre-clearance, customs clearance, and post-clearance processes simultaneously have an influence on dwelling time at the port of Tanjung Perak. Meanwhile, partially, the pre-clearance and post-clearance processes have a positive and significant effect on dwelling time, while the customs clearance process does not affect dwelling time. Currently, the customs clearance process is faster due to new policies and improved facilities. This research only discusses the management of imported goods, so other research using export variables is needed to increase the accuracy and efficiency of government trade policies.

Smart electronic governance in international trade using blockchain and Naïve Bayes’ based text classification to prevent import duty frauds

Smart electronic governance in international trade using blockchain and Naïve Bayes’ based text classification to prevent import duty frauds

COVID‐19 and global value chains: A discussion of arguments on value chain organisation and the role of the WTO

AbstractWe conduct an in‐depth analysis of the reasons for changes in global value chains as a result of COVID‐19 both from a positive angle, analysing expected changes in the behaviour of firms, and from a normative angle, assessing the different arguments for policy interventions by governments. The analysis generates three main conclusions. First, the COVID‐19 pandemic could contribute to diversification of sources of supply whose extent will vary by sector depending on the costs of value chain reorganisation. The pandemic, by contrast, is not likely to contribute much to re‐shoring, the return of manufacturing activities to industrialised countries, which is more likely to be driven by pre‐existing trends such as rising factor costs in emerging countries, increasing uncertainty about trade policy, and robotization and automation of production. Second, the pandemic has led to increased attention to the provision of essential goods in situations of crisis. Third, the largest risk for the global economy in the aftermath of the pandemic is a move away from open, non‐discriminatory trade policies, which would jeopardise the large benefits of open trade regimes in the current global economy characterised by scale economies, innovation spillovers, and a global division of labour.

Governance of the wildlife trade and the prevention of emerging zoonoses: a mixed methods network analysis of transnational organisations, silos, and power dynamics

IntroductionThe wildlife trade is an important arena for intervention in the prevention of emerging zoonoses, and leading organisations have advocated for more collaborative, multi-sectoral approaches to governance in this area. The aim of this study is to characterise the structure and function of the network of transnational organisations that interact around the governance of wildlife trade for the prevention of emerging zoonoses, and to assess these network characteristics in terms of how they might support or undermine progress on these issues.MethodsThis study used a mixed methods social network analysis of transnational organisations. Data were collected between May 2021 and September 2022. Participants were representatives of transnational organisations involved in the governance of wildlife trade and the prevention of emerging zoonoses. An initial seed sample of participants was purposively recruited through professional networks, and snowball sampling was used to identify additional participants. Quantitative data were collected through an online network survey. Measures of centrality (degree, closeness, and betweenness) were calculated and the network’s largest clique was identified and characterised. To understand the extent to which organisations were connected across sectors, homophily by sector was assessed using exponential random graph modelling. Qualitative data were collected through semi-structured interviews. The findings from the quantitative analysis informed the focus of the qualitative analysis. Qualitative data were explored using thematic analysis.ResultsThirty-seven participants completed the network survey and 17 key informants participated in semi-structured interviews. A total of 69 organisations were identified as belonging to this network. Organisations spanned the animal, human, and environmental health sectors, among others including trade, food and agriculture, and crime. Organisation types included inter-governmental organisations, non-governmental organisations, treaty secretariats, research institutions, and network organisations. Participants emphasised the highly inter-sectoral nature of this topic and the importance of inter-sectoral work, and connections were present across existing sectors. However, there were many barriers to effective interaction, particularly conflicting goals and agendas. Power dynamics also shaped relationships between actors, with the human health sector seen as better resourced and more influential, despite having historically lower engagement than the environmental and animal health sectors around the wildlife trade and its role in emerging zoonoses.ConclusionThe network of transnational organisations focused on the governance of wildlife trade and the prevention of emerging zoonoses is highly multi-sectoral, but despite progress catalysed by the COVID-19 pandemic, barriers still exist for inter-sectoral interaction and coordination. A One Health approach to governance at this level, which has gained traction throughout the COVID-19 pandemic, was shared as a promising mechanism to support a balancing of roles and agendas in this space. However, this must involve agreement around equity, priorities, and clear goal setting to support effective action.

Made and created in China: the role of processing trade

AbstractThis paper examines the main participants of China's processing trade regime – firms that engage in both processing and ordinary exports. By matching several datasets from China, including a unique sample of transaction‐level customs data with firms' branding information, we uncover three stylized facts. First, these “mixed” firms exhibit superior performance in various margins such as revenue and physical productivity. Second, even within firms, there is a link between export mode choice and brand ownership – own‐branded products are typically exported under ordinary trade while products under other firms' brands are exported under processing trade. Third, there is a price premium associated with selling one's own‐branded products. To rationalize these findings, we present a simple theoretical framework where firms with multi‐attributes (i.e., “making” and “creating”) endogenously determine their specialization within a production network. We find evidence for the model's main prediction that firms in China intensified their branding activities when faced with favorable processing trade policies upstream.