International Trade Regime Research Articles

Situating sustainable food systems within the international trading regime: what is at stake for developing countries?

Purpose This paper aims to analyse the concept of the sustainable food system, and discussion on this topic at the international fora. This paper further explores increasing confluence of sustainable food system with international trade. Finally, this paper briefly traces the potential implications of sustainable food systems related obligations for developing countries and least developed countries (LDCs). This paper aims to bring forth the growing confluence of sustainable food system on international trade and potential implications. Design/methodology/approach This paper studies the concept of the sustainable food system, growing interlinkage between sustainable food system and international trade through tracing the evolution of discussions related to sustainable food systems at various forums and the potential implications for developing countries. Findings This paper shows that there is growing confluence of sustainable food systems with international trade. This paper also highlights the potential implications of the same for developing countries and LDCs. It is difficult, however, to conclusively trace all potential implications. Originality/value This paper presents one of the first systematic accounts of the increasing confluence of sustainable food systems and international trade. It shows, at the same time, that developing countries and LDCs need to tread carefully in view of potential implications of the growing confluence of sustainable food systems and international trade.

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.

Untangling Paradox: A Humanitarian Perspective on Nuclear Weapons Trade in Non-Proliferation Ambition

The emerging issue of the legality of nuclear weapons trade by the state remains unclear as the use of nuclear weapons itself. Nuclear weapons are perceived either as a threat to human lives or a potential guarding system for a state. Contrary for the latter, states have the enormous ambition to establish non-proliferation of nuclear weapons to justify its use. Trade practice is prone to be bent as a tool to develop nuclear weapons programs. This research is a normative legal research that uses statutory and conceptual approaches. By examining both legal instruments and fundamental principles of humanitarian law are able to elucidate the paradox of non-proliferation and nuclear weapons trade conducted by states. Humanitarian principles are an adequate fundamental basis to examine the legal uncertainty of nuclear weapons use. Jus ad bellum defined that nuclear weapons violate proportionality and precautionary principles. The study argues for a particular legally binding instrument to prohibit nuclear weapons as a subject to international trade regime. Furthermore, the International Atomic Energy Agency as an authorized institution must be strengthened in order to maintain the peaceful use of nuclear energy as well as programs developed by states.

The Cooptation Dilemma: Explaining US Contestation of the Liberal Trade Order

Abstract While the United States (US) acted as a liberal hegemon in setting up the Liberal International Order (LIO), it is increasingly contesting the inclusive legacy institutions underpinning the LIO and is instead moving towards alternative, more exclusive institutions. Why is the US contesting the institutions it once set up to stabilize the LIO? We argue that hegemonic contestation is the result of a reactive sequence that is endogenous to cooptation-based orders where hegemons face a trade-off between inclusion and control. This Cooptation Dilemma is particularly pronounced in strongly institutionalized liberal (sub-)orders, such as the international trade regime. It unfolds in three stages: Privileging control, the liberal hegemon first creates exclusive institutions, which are likely to breed contestation by excluded states. To tame their contestation, the hegemon secondly includes previously excluded states into the order, making the previously exclusive institutions more and more inclusive. To compensate for the related control loss, the hegemon finally promotes alternative, more exclusive institutions, successively turning away from the inclusive legacy institutions. We demonstrate this reactive sequence by tracing the process that led to the US contestation of the World Trade Organization (WTO). Our findings suggest that cooptation-based orders in general and strongly institutionalized liberal orders in particular are prone to dynamic instability.

The Negative Investment List Policy in Indonesia: A Review of Free Trade and the Conservation of Endangered Fish Species

This study examines and analyzes the problems arising from the interaction between Indonesian investment measures and compliance with the international trade regime. This study uses a normative legal research method. The collected legal material is then qualitatively analyzed to describe the problem and answer the study objectives. The results show that Indonesia has successfully justified the alignment of its Negative Investment List policy regarding endangered fish species, listed in Appendix I of CITES juncto Article XX of the GATT 1994. On another note, the Dispute Settlement Body may issue rulings with differing considerations. Nonetheless, the WTO Agreement and CITES are provisions established to provide adequate negotiation space for all their members. Thus, CITES and WTO member states should refrain from raising disputes over Indonesia’s investment measures if it restricts their economic interests and market access within Indonesia. Therefore, it is recommended that the WTO and CITES members recognize and appreciate the Negative Investment List policy in maintaining a balance between investment development and the protection of endangered fish species. Furthermore, stakeholders are urged to delve deeper into the principles and objectives of the WTO and CITES Agreements. Additionally, the members of the relevant organizations must collaborate in a spirit of solidarity and environmental awareness, prioritizing dialogue, consultation, and negotiation over dispute legal action that could complicate the situation. In this context, multilateral dialogue can serve as an effective platform for mediating diverse interests and seeking sustainable solutions that benefit the economy and the conservation of endangered fish species.

EU green deal: between ecological transition and the struggle for power maintenance

Environmental, social, humanitarian, and economic crises are part of the contemporary world. The exceeding of Earth's limits manifests in various ways, including climate change, whose effects are already impacting various regions of the planet. Although this issue has been discussed for decades and subject to extensive international legal regulation, there are areas with significant potential for mitigation and adaptation to climate change that remain relatively unexplored. While traditional international trade arrangements are insufficient to promote well-being and the preservation of life on Earth, there is fertile ground for collaboration between international trade and climate change regimes. The European Green Deal, launched as a political project for ecological transition, has economic and trade-related objectives and implications. That stated, the overall objective of this research is to uncover the inconsistencies of the European Green Deal concerning ecological law parameters and its implications for global trade. This is a bibliographical research with descriptive purpose, deductive approach, and axiological interpretation. From the analysis of the European Green Deal based on selected parameters of ecological law, it was found that, although it reflects progress in the implementation of ecological law, the political project serves as a mechanism for maintaining power, reproducing the dominant capitalist logic, which diminishes its own transformative potential in the transition to an ecological paradigm.

Regulating SOEs Through the SCM Agreement: Utilizing the ‘Public Body’ Jurisprudence to Cover SOEs

In January 2020, trade ministers from the EU, the US, and Japan proposed several amendments to the WTO Subsidies and Countervailing Measures (SCM) Agreement. One of the proposals was to examine whether to incorporate state-owned enterprises (SOEs) into the definition of the public body in the SCM Agreement. A similar approach was adopted in the EU’s white paper of June 2020. These proposals present that the current WTO jurisprudence is not adequate to regulate financial contributions by SOEs. On the other hand, recent international trade agreements suggest another type of SOE regulation by providing a set of independent norms on SOEs. As such, there are two options for regulating subsidization by SOEs in the current international trade regime: a combined scheme and a separate scheme. This article argues that a combined scheme that regulates SOEs through public body concept in the WTO SCM Agreement is a more adequate formula than a separate one. Considering aggravating trade disputes among major trading partners surrounding the SOEs a better method to regulate SOEs in a single and coherent WTO SCM Agreement is suggested. state-owned enterprises, SCM Agreement, subsidization, public body, governmental authority, combined scheme, separate scheme

Was the post-war international trade order bound to succeed while the Bretton Woods monetary order established in 1944 was doomed to fail?

This paper explores the reasons embedded in the original architecture of both the international trade and monetary regimes that determined different outcomes for both. It proposes that the original version of the Bretton Woods monetary regime showed faster its essential failures and basically had to be replaced as early as 1971, while the trade regime embodied in the GATT and later in the WTO managed to at least survive until present day. It posits that correspondence (or the lack of it) of the basic characteristics of the said regimes with the underlying political reality where the regimes would apply (in line with Ruggie´s depiction of «embedded liberalism») accounts for the differentiated outcomes. It explains that the international trade regime showed more flexible traits that allowed it to adjust to the underlying political and led to its survival. The lack of that adaptability element would likewise explain the early demise of the original Bretton woods scheme.

Implementation of Domestic Market Obligations on Nickel and Bauxite in Indonesia Under International Trade Regime

Increasing global economic activity has resulted in raising demand on nickel and bauxite ores for manufacturing industries. Foremost demand on the raw materials is consistently increasing for production of friendly environment products, such as battery of electric vehicles (EV). The production of EV battery potentially increases particularly as global transformation to reduce GHG Emissions which cover developed and developing countries. This current situation leads export restrictions on nickel and bauxite to developed countries which purpose for domestic stockpile in developing countries, such as Indonesia. Meanwhile, the measures is supposed to violate Article XI.2(a) GATT 1994 which it is applied without temporary period and there is no essentialness circumstance to implement the restrictions. This emphasized on review opportunities for Indonesia to take into force alternative measures which is consistent with the GATT 1994 provisions. The research is conducted based on legal review with refer to GATT 1994 provisions and Indonesia legal provisions. Based on the review, the researchers find that implementation of Domestic Market Obligations are an exact alternative measure to safeguard domestic stockpile without extremely suffer disruption for global demand. The alternative measures grant balancing allocation between global and domestic demand which could be adjusted regularly according to the further situation faced by the country.

Can Regional Comprehensive Economic Partnership Alter the Direction of Global Textiles and Clothing Trade? A Computable General Equilibrium Analysis

The purpose of the article was to investigate the criticality of Regional Comprehensive Economic Partnership (RCEP) to the direction of the international trade regime of the textiles and clothing (T&C) sector. The reason for selecting this sector is because RCEP block exported 50% of the global share of T&C products in 2019. Besides, this industry has been quite important from an employment generation point of view and a leading earner of foreign exchange for many nations around the world. Given the free trade agreement and an ambitious approach towards removing the majority of tariff lines pertaining to this sector, RCEP can potentially alter the direction of T&C trade and have related spillover benefits and trade-off in the global supply chain. This study undertakes an evaluative investigation through computable general equilibrium modelling. The article tries to analyse the impact of a potential free trade agreement specific to the RCEP block on the member nation’s gross domestic product, exports, industrial production, employment and welfare. The impact on exports is reportedly a mixed bag where countries such as China and Vietnam stand out to gain enormously while a few others are expected to lose. On similar lines, production in this sector appears to rise for RCEP members such as Singapore, Vietnam, South Korea, Japan, China and Cambodia while for other members the same is seen to decline. Also, T&C trade is noticed to divert away from non-RCEP members. An important policy implication for non-member RCEP nations is to ratify individual trade agreements pertaining to T&C trade. The study shows the mitigation of the trade diversion effect of RCEP by taking India’s example and incorporating its free trade agreements in T&C trade with RCEP non-member country like the UK and then with RCEP nation like Australia. The supposed trade agreements of India have been incorporated in the main model along with RCEP.

Dealing with the Challenge of Climate Change within the Legal Framework of the WTO

Although international trade and climate change regimes are two different fields of international law, they are closely interrelated. In particular, certain domestic environmental policies adopted by States may run afoul of WTO law, thereby having adverse effects on free trade. It has been claimed by critics that non-discrimination principles and subsidies regulations of WTO law constrain its Members’ ability to take certain unilateral actions aimed at climate change mitigation. According to other commentators, despite the existence of potential conflicts between UNFCCC and WTO regime, there are still synergies which can be developed to bring a greater coherence, and WTO’s multilateral framework can serve as a vehicle to facilitate targets of the Paris Agreement. This paper argues that although sustainable development is recognized by WTO regime and it leaves some scope for climate change actions, its current legal framework does not provide sufficient space for member’s regulatory autonomy in order to take national regulatory policiesAlthough international trade and climate change regimes are two different fields of international law, they are closely interrelated. In particular, certain domestic environmental policies adopted by States may run afoul of WTO law, thereby having adverse effects on free trade. It has been claimed by critics that non-discrimination principles and subsidies regulations of WTO law constrain its Members’ ability to take certain unilateral actions aimed at climate change mitigation. According to other commentators, despite the existence of potential conflicts between UNFCCC and WTO regime, there are still synergies which can be developed to bring a greater coherence, and WTO’s multilateral framework can serve as a vehicle to facilitate targets of the Paris Agreement. This paper argues that although sustainable development is recognized by WTO regime and it leaves some scope for climate change actions, its current legal framework does not provide sufficient space for member’s regulatory autonomy in order to take national regulatory policies

Halal Certification of Indonesian Cosmetics Products

This article aims to explore the impact of halal certification of Indonesian products and the interplay between halal certification, Indonesia’s economic interest and International Trade Regime. This research uses qualitative approach taking Indonesia case study by collecting secondary data from varied sources. The findings indicate that the massive awareness of halal products especially cosmetic is not solely motivated by religious motive. The halal product is not substantially driven by religiosity. In fact, to understand the meaning of halal, this paper argues that companies that trade halal product do not follow Islamic values. Further, this paper suggests that Islam does not support economic system that prioritizes a few parties, put women as an object, not environmentally friendly, or wasteful. On the contrary, it promotes an order that is not fair for all. However, this paper further argues that halal trend in Indonesia trade system is more about the rise of Islamic populism. WTO therefore, has to be cautious on accommodating halal labelling in international trade. It must be opened to the needs of Islamic countries yet it has to be aware that it may become new form of protectionism which is unfair for global trade standards.

Greening International Trade: Unilateral Tendencies and the Role of International Institutions

International climate and trade regimes are becoming increasingly interchangeably linked to each other. Over the last months’ discussions about greening the international trade have rapidly increased, aiming to take concrete steps towards climate mitigation. Some countries such as the EU have come up with courageous unilateral measures such as the Carbon Border Adjustment Mechanism (CBAM), and Germany forwarded by introducing to the G7 the idea of a Climate Club. Bypassing international institutions might be flexible to move forward, but at the same time may create fragmentation of the international regimes. This policy brief maps the new unilateral tendencies towards climate-related measures on trade policy and also examines the internal dynamic within the international organization. Firstly, it starts by analyzing how the regime complexity of climate change has left space for non-multilateral tendencies to emerge. Second, it maps the new tendencies and then explores how we got there. And lastly, it draws some insights into the potential risk of a more fragmented international climate regime may pose for international cooperation.

International legal cooperation of countries in ensuring the human rights to adequate food

This article discusses issues concerning international legal regulation of coopera-tion of states in resolving the problems related to ensuring the human rights to ad-equate food and food security in general, including in the context of a pandemic that has had a significant impact on the development of the world's economy. The work studies: the development of international legal regulation of partnership in the field of food security, the goals and authority of Food and Agriculture Organi-zation (FAO), the conditions of the food market and the world's economy. The study examines the right of everyone to access safe and healthy food, in accord-ance with the right to for adequate food and the basic right of everyone to be free from hunger. It is noted that the world food security system covers: the creation of national food supplies coordinated on the international level; provision of food aid to countries in need, organization of an early warning system on food shortage; an increase of the share of developing countries in international trade of agriculture products. One of the factors of the establishment of intranational food security is food sup-port to developing states. The article considers various principles like roman princi-ples of sustainable global food security; a comprehensive approach to food securi-ty; strategic coordinative cooperation; the principle of supporting national, region-al and international programs; close interaction with international organizations and principle of maintaining of assumed financial obligations. It is noted that the lack of positive results in a process of resolving issues concern-ing food supply requires improvement of the effectiveness of multilateral man-agement system dealing with ensuring world's food security, through the unifica-tion and coordination of efforts of states, international organizations, and other interested parties at local and global levels. A similar policy is proposed to be considered in complex with global and regional issues, including negotiations on the creation of a fair international trade regime, which will positively affect the strengthening of national food security potential of developing countries and improve the effectiveness of international food assis-tance programs. Such policy is proposed to be reflected and specified in agriculture doctrines of national and regional levels.

Trade vs. Security: Recent Developments of Global Trade Rules and China's Policy and Regulatory Responses from Defensive to Proactive

AbstractThis paper provides a systemic study of China's policy and legal responses to security-related actions and disputes in the international trade regime. It starts with a brief review of the law and practices relating to the security exceptions under the World Trade Organization to provide an important context for understanding the recent developments of China's approaches to national security. Based on a detailed discussion of China's approaches at international and domestic levels, we argue that China's security strategy has been shifting from being defensive to proactive: internationally by seeking to influence the development of trade rules and practices, and domestically by expanding national security to cover a wide spectrum of economic security interests and developing a comprehensive regulatory framework to protect such interests. The way in which major trading nations are taking the law into their own hands, based on ever-expanding security interests, does not bode well for the future of the multilateral trading system. There is a pressing need for collective action by all governments involved to re-design security-related rules and exceptions to confine the use of security measures to agreed parameters.

The Special and Differential Treatment Provisions in the Trade Facilitation Agreement: New Teeth for an Old Gum?

Various provisions on special and differential treatment of developing countries have been enacted from the time of the General Agreement on Tariffs and Trade 1947 (GATT 1947) through to the current era of the World Trade Organisation (WTO). Perhaps the most significant epoch in the recognition of the special and differential treatment of developing countries in the international trade regime was the 1979 Decision on Differential and More Favourable Treatment, Reciprocity and Fuller Participation of Developing Countries, more popularly known as the Enabling Clause. The Enabling Clause, inter alia, allowed for a permanent derogation from the most favoured nation provision in Article I of the GATT 1947 in order to enable developed countries grant preferential treatment to goods coming from developing countries. The advent of the WTO in 1995 also came with specific provisions in the multilateral trade agreements that catered for the special needs of developing countries. Developing countries have, however, raised concerns regarding the effectiveness and utility of most of the special and differential treatment provisions considering the fact that most of these provisions have been formulated in non-mandatory language and thus do not obligate compliance. This article considers the special and differential treatment of developing countries in WTO law and analyses similar provisions in the most recent multilateral trade agreement in the WTO - the Trade Facilitation Agreement - which came into effect on 22 February 2017. The article aims to ascertain the effectiveness of special and differential treatment provisions in the Trade Facilitation Agreement with respect to addressing long-standing concerns of developing countries.

Counterfactuals and Contingency in WTO Dispute Settlement History

AbstractWith the benefit of hindsight, much scholarship across political science, law, and economics has told the story of the international trade regime as if it had been pulled all along by a definite aim. By contrast, this article emphasizes the contingent aspects of the trade regime's development, looking especially to its dispute settlement mechanism. The very creation of the Appellate Body had by no means a certain outcome, and once created, the tribunal's evolution was largely unanticipated by states. An often-overlooked actor played a key role in that development: the WTO Secretariat. Drawing on recent findings, this article lays out the full extent of the Secretariat's role in dispute settlement, which remains largely hidden from view, and deliberately so. From appointing adjudicators and managing their remuneration, to providing them with legal arguments and drafting final rulings, the Secretariat of the WTO looms larger than in any comparable tribunal. Making its influence more transparent, I argue, would go a long way to returning the system to the shape it was designed to have at its outset.

Does international trade and investment liberalization facilitate corporate power in nutrition and alcohol policymaking? Applying an integrated political economy and power analysis approach to a case study of South Africa

BackgroundWhile there is a growing body of legally-focused analyses exploring the potential restrictions on public health policy space due to international trade rules, few studies have adopted a more politically-informed approach. This paper applies an integrated political economy and power analysis approach to understand how power relations and dynamics emerging as a result of the international trade and investment regime influence nutrition and alcohol regulatory development in a case study of South Africa.MethodsWe interviewed 36 key stakeholders involved in nutrition, alcohol and/or trade/investment policymaking in South Africa. Interview transcripts and notes were imported into NVivo and analyzed using thematic analysis. We used a conceptual framework for analyzing power in health policymaking to guide the analysis.ResultsUnder the neoliberal paradigm that promotes trade liberalization and market extension, corporate power in nutrition and alcohol policymaking has been entrenched in South Africa via various mechanisms. These include via close relationships between economic policymakers and industry; institutional structures that codify industry involvement in all policy development but restrict health input in economic and trade policy decisions; limited stakeholder knowledge of the broader linkages between trade/investment and food/alcohol environments; high evidentiary requirements to prove public health policy effectiveness; both deliberate use of neoliberal frames/narratives as well as processes of socialization and internalization of neoliberal ideas/values shaping perceptions and policy preferences and ultimately generating policy norms prioritizing economic/trade over health objectives.ConclusionsExposing power in policymaking can expand our own ideational boundaries of what is required to promote transformative policy change. This work points to a number of potential strategies for challenging corporate power in nutrition and alcohol policymaking in the context of international trade and investment liberalization in South Africa.

Green Bills for Green Earth: How the International Trade and Climate Regimes Work Together to Save the Planet

Through their Intergovernmental Panels on Climate Change, the scientific community tells us that we are heading towards a climate catastrophe. As a result, various countries are offering various promising and novel policy instruments to mitigate climate change and continue to grow macroeconomically, as we witnessed in the Glasgow Conference of the Parties in 2021. In other words, finding ways to grow economically while, at the same time, protect the environment and mitigate climate change. In that spirit, this article first provides an overview of the global trade and climate regimes. It then offers an analysis of how the World Trade Organization (WTO) globally and the European Union (EU) regionally might combat climate change in remarkable ways. The article also provides an analysis of European Green Deal and the US Green New Deal (GND), two encouraging policy instruments to help mitigate climate change ambitiously. Finally, the article provides a thorough assessment of the EU’s Carbon Border Adjustment Mechanism (CBAM). European Green Deal, US Green New Deal, Carbon Border Adjustment Mechanism, carbon pricing, GATT general exceptions, non-discrimination principle in GATT