Uruguay Round Negotiations Research Articles

The Right to Refuse Equivalence of Sanitary and Phytosanitary Measures: Trading on Regulatory Trust?

Abstract Equivalence is an essential discipline for liberalising trade between States whose sanitary and phytosanitary (SPS) measures are based on divergent regulatory approaches. During the Uruguay Round negotiations, “equivalence” under the SPS Agreement was regarded by negotiators as being “of great importance”, and it was even considered to establish a right for exporting States. In practice, the discipline has remained ineffective, with only thirty-six equivalence recognition decisions made since 1995. This article argues that the underperformance of equivalence as an obligation is structural in nature: in effect, the SPS Agreement establishes a conditional right of importing Members to refuse equivalence requests. As such, exporting Members only gain equivalence protection where they either demonstrate that their measures (1) meet the importing Member’s appropriate level of protection or (2) achieve the same level of protection as parties to recognition agreements. Finally, the need for fostering regulatory trust between domestic SPS regulatory agencies is underscored as a prerequisite for achieving broader equivalence recognition.

Brief Overview of Targeted Dumping Rules

In light of increasing trade friction between China and developed economies, protecting the legitimate rights and interests of domestic enterprises in anti-dumping investigations is of great importance. Targeted dumping, which emerged during the Uruguay Round negotiations in 1994, has become a central issue in anti-dumping investigations. This paper aims to provide a comprehensive definition of targeted dumping while analyzing its historical evolution from the zeroing method to the concept of targeted dumping, alongside assessing the rules and frameworks for its application in the United States, which have reflected its ambiguity and uncertainty. The paper will also analyze the case of United States - Certain Methodologies and Their Application to Anti-Dumping Proceedings Involving China (“DS471”) and discuss the relevant central issues of targeted dumping. What we would conclude is that by analyzing the findings from the Panel and the Appellate Body of the World Trade Organization (“WTO”) regarding this case and other relevant favorable verdicts of illegality or ineffectiveness of methods used to determine target dumping in recent years in-depth, it would be a benefit for Chinese enterprise from the perspective of the response to the determination of anti-dumping measures regarding target dumping.

Impact of WTO’s Trade Liberalisation on Selected Food Crops in Pakistan

There is a great potential in Pakistan for production of all types of food commodities due to vast natural resource base, covering various ecological and climatic zones. Most of the agricultural commodities produced in the country are consumed by the local population while the rest is exported in the form of primary products and some value added products. Previously, Pakistani products had a good market overseas with no restrictions of quality and quantity but under the changing environment affected by WTO, it is expected that Pakistan will face a strong competition in the agriculture sector from its competitors in the world market. According to the neoclassical trade theory, trade flows and pattern will develop along the lines of comparative advantage and competitiveness that can act as indicators of trade potential and direction. There has been extensive government involvement in the determination of the overall structure of agriculture and its patterns of production, employment and trade. Pakistani government has been intervening in agriculture sector in the past in order to support agricultural production, income supports, ensure food security, improve the balance of trade, reduce consumer prices, address environmental and regional concerns and to pursue sanitary and phyto-sanitary objectives [Hassan (1995)]. Pakistan is a founding member of the General Agreement on Tariffs and Trade (GATT) since its creation. Following the Uruguay Round negotiations, all agricultural products were brought under multinational trade rules by WTO, under the Agreement on Agriculture. This established a framework to begin liberalising agricultural trade through the reduction of import duties (tariffs), trade-distorting production subsidies and export subsidies. Prior to the Uruguay Round, trade in agriculture was highly distorted. Market access for agricultural products was limited as most markets were restricted by physical import barriers. The presence of massive domestic subsidies led to overproduction of temperate crops in the developed countries that led to excess supply, and export subsidies were used to dump the surplus agricultural output in international markets. This resulted in depressed market prices and, in spite of being low-cost producers of agricultural products; developing countries could not compete with the subsidised exports from developed countries.

Can the Appellate Body Be Saved?

The ‘Walker Paper’ represents a commendable effort to find middle-ground on the World Trade Organization (WTO) Appellate Body, but does not address the US concerns about the Appellate Body’s overreaching in antidumping, countervailing duty, and General Agreement on Tariffs and Trade (GATT) Article XIX ‘escape clause’ disputes, and instead seizes on a series of half-hearted fixes to the long list of concerns in US Trade Representative’s (USTR’s) ‘Report on the Appellate Body of the World Trade Organization’. US concerns about overreaching date back to the Bush 43 and Obama Administrations and are rooted in the Appellate Body’s ‘zeroing’ line of cases. The concerns rest on the conviction of US trade officials who participated in the Uruguay Round negotiations and later served in the Bush 43, Obama, and Trump Administrations, that there was never a WTO agreement to abolish ‘zeroing’. This view was shared by the WTO Secretariat and WTO Panels and underpinned the contentious, decade-long impasse between USTR, the WTO Secretariat, and WTO Panels on the one hand, and the Appellate Body and Appellate Body Secretariat on the other. While the Appellate Body’s overreaching has multiple sources, one is its dismissive approach to negotiating history under Article 32 of the Vienna Convention, and obsessive reliance on the Oxford English Dictionary as a main source of meaning in interpreting the WTO Agreements. Had the Appellate Body taken a more respectful look at the Uruguay Round negotiating history, it would have found no support for efforts to read a broad prohibition on zeroing into terms that dated back to the Kennedy Round Antidumping Agreement, Tokyo Round Antidumping Code, and GATT 1947. The Appellate Body’s overreaching also appears to stem from hubris, as some Appellate Body Members have sought to make their mark on international jurisprudence or serve as saviours of the WTO system. While some in Geneva are clearly hoping the US concerns will disappear once the Biden Administration takes office, these concerns predated Ambassador Lighthizer by over a decade and are shared by both Republicans and Democratic Members of Congress. Accordingly, even if the new Administration were to seize on some variant of the Walker paper as an excuse to placate US allies and trading partners, it’s unlikely to offer a lasting solution, since the same problems will likely recur without serious systemic and structural reforms. World Trade Organization, WTO, Appellate Body, Dispute Settlement Understanding, Dispute Settlement, Antidumping Agreement, Zeroing

Past as Prologue? Historical Patterns and Discontinuities in Modern Trade Wars

International trade law is under siege. We face imminent stasis in WTO dispute settlement. Substantively too, the rapid outbreak of unilateral deployment of tariffs by the U.S (and then retaliation by China) is putatively WTO-illegal. These developments have shocked the community of practitioners and scholars of the WTO. Against this backdrop, it is tempting to position the current trade wars as a unique threat to both globalization and its institutional manifestations, like the WTO. To my mind, that claim deserves, at the very least, serious assessment. This is not the first time in its modern history that the system of international trade law has been subject to escalating resort to unilateral protectionism by its dominant power. There are important lessons from past trade conflicts that can guide our prescriptions on productive (and even likely) future outcomes, while bearing in mind differences in degree and orientation. A logical comparator here is the dramatic rise of Japan as an economic competitor to the U.S through the 1970s and 1980s (in a period that both preceded and tracked the Uruguay Round negotiations) and the shift in unilateral and multilateral strategies employed by the U.S to manage trade conflict with Japan. This comparator is routinely dismissed by most commentators, largely because of the role of the U.S as a guarantor of Japanese security. While that security umbrella is an important difference when considering the fractious relationship between the U.S and China, there are thick undercurrents in commonality (both substantively and sociologically) that transcend points of variance.

Patents on Pharmaceutical Products in Fair International Economic Relations

Abstract Intellectual property right (IPR) negotiations during the Uruguay Round (UR) negotiations were characterized by significant disagreement between developed and developing countries. For developing countries, the WTO system might have gone too far on patents. It is particularly true for essential medicines critical to human life and health. The Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS) of the WTO includes a few provisions on special and differential treatment (SDT) of developing countries. However, these do not specifically mention pharmaceutical products. Patentability of pharmaceutical products may be analysed in light of fairness. From the viewpoint of distributional fairness, this article derives several policy suggestions for pharmaceutical products in fair international economic relations.

Regulatory Development and Challenges for the Regionalization Provisions in the WTO SPS Agreement and Regional Trade Agreements

This paper examines the regulatory development of the regionalization provisions in Article 6 of the WTO SPS Agreement, focusing on implementation challenges to the provisions’ operation. Main findings of the study reveal that, since the time the principle was drafted in the Uruguay Round negotiations, one of the issues continuously discussed was finding an appropriate level of burden that requires exporting Members to provide evidence for a claim of clean areas. The Agreement’s legal criteria being not sufficiently concrete, recent rule-developments seem to be mainly in two directions: the onus is more shared between exporting and importing countries, and RTA provisions structurally incorporate more participation from the relevant international organizations. Also, applying a broad perspective that explores negotiations, rules and applications, the analysis attempts to shed light on recurring fundamental problems pertinent to importing countries’ recognition of clean areas under the world trading system.

Rebooting the WTO to Tackle Legitimate Concerns and Ensure Predictability for Businesses

Recent frictions between major nations over the flow and rules of international trade have led to calls for rebooting the WTO. A major concern in the realm of the global trade crisis relates to the distortions caused by government intervention – Chinese state-owned enterprises being mostly under the spotlight. This concern has accentuated the debate on whether the Appellate Body of the WTO has been exercising judicial activism by filling in gaps and ambiguities deliberately left behind at the time of the Uruguay Round negotiations. There are considerable challenges to be overcome through the more efficient use of the WTO’s three legs. Recent declarations by world leaders give some hope that the negotiating function of the WTO will awaken from its comatose state and that multilateralism will ultimately prevail.

Blueprint for a Plurilateral WTO Arbitration Agreement Under Article 25 of the Dispute Settlement Understanding

There have long been concerns about the growing workload of the World Trade Organization (WTO) Appellate Body. More recently, another more fundamental concern has emerged, which risks exacerbating the Appellate Body’s capacity constraints, but goes further to imperil the independence of its members and the legitimacy of its rulings. An apparent design flaw of the WTO Dispute Settlement Understanding (DSU) has been laid bare, namely the consensus requirement for Appellate Body appointments, allowing any single WTO Member to block an appointment, without recourse to voting. One way to avoid the harmful effects of blockage or long delays in appointing Appellate Body members and to generally overcome the decades-old work-load problems could be to make use of arbitration. This paper examines the legal and practical impediments, which may prevent arbitration under Article 25 DSU from operating as an effective alternative means of dispute settlement and explores possible solutions. To this end, the paper surveys the conceptual and historical context of Article 25 DSU, looking in turn at the envisioned use of arbitration in the application of the General Agreement on Tariffs and Trade of 1947 and how arbitration re-emerged in the Uruguay Round negotiations as an alternative means of dispute settlement. Next, the relevant text of the DSU is examined to identify a number of possible design features, which must be developed before such arbitration can become operational, as well as certain other features that may be elaborated on, depending on the preferences of the parties to the arbitration. These features are further discussed in the form of essential elements of an arbitration agreement in respect of Article 25 arbitration.

The WTO's Special Safeguard Mechanism: An Indian Perspective on the Present Paradox

While liberalisation of trade and the progressive reduction of tariffs have led to significant welfare gains, these may be unfeasible for developing countries where a surge in imports could potentially be detrimental to realising the objective of food security through food self-sufficiency. Developing country members of the World Trade Organization (W.T.O.) have thus been proposing a ‘special safeguard mechanism’ (S.S.M.). This would permit them to impose measures in circumstances wherein there has been a surge or a decline in prices of agricultural imports, so as to negatively affect the livelihood and food security interests of these nations. These deliberations have gained momentum against the backdrop of the W.T.O.'s Agreement on Agriculture (A.o.A.), which came into force in the Uruguay Round negotiations. Consequently, the W.T.O.'s Sixth Ministerial Conference held in Hong Kong in 2005, endowed developing country members with the right to recourse to S.S.M.'s on account of import surges that could potentially expose its agricultural sector to increased shocks. Nonetheless, the lack of consensus as regards the precise modalities, particularly between the United States and India, resulted in a deadlock. Consequently, during the recent Nairobi Ministerial Conference in 2016, India vehemently opposed to proceeding with any further negotiations, and in particular, as regards the Agreement on Trade Facilitation (T.F.A.). India insisted that its internal mechanisms to support food security and public stockholding - being an issue of policy space should be left unhampered despite the present stipulations of the A.o.A., which pegs the same at 10% of the value of production. Accordingly, the mandate of S.S.Ms. assumed more significance in the Nairobi Ministerial Conference insofar as modalities on these would plausibly permit developing countries to increase tariffs on account of import surges on agricultural products – and thus safeguard their food security and livelihood concerns. S.S.Ms. negotiations have been particularly important for India in its endeavour to insulate its agricultural sector from import deluges that debilitate its livelihood and food security. Its success, however, depends on the ability of the W.T.O. Members to finally negotiate the modalities of this right, in the absence of which, it continues to remain a ‘lip service'. This paper, therefore, attempts to explore India's motivation in digging its heels on the S.S.M. issue, appreciating that the country's stand at the W.T.O. appears to be of vital importance to developing country Members with similar anxieties as regards the protection of livelihood and food security. It delineates parameters in these respects which could be workable keeping in mind the agricultural scenario in India.

Brexit, Trade and Agriculture: Waiting for Answers

The decision of the United Kingdom to leave the European Union has raised many questions, including some on the nature of the trading relationship that the United Kingdom will have with the European Union and third countries once it leaves the EU. For agriculture, the United Kingdom will need to develop its own agricultural policy as it will no longer be subject to the Common Agricultural Policy and one constraint on the development of that policy will be the Agreement on Agriculture concluded at the end of the Uruguay Round negotiations. This article examines the three pillars of that Agreement – market access, domestic support and export competition – to determine the commitments which the United Kingdom may make in each pillar and then looks at two other relevant agreements, the Agreement on the Application of Sanitary and Phytosanitary Measures and the Agreement on Technical Barriers to Trade, to complete the discussion of the scope of the United Kingdom’s nascent agricultural policy. Thereafter there is a discussion of the possible principles on which that policy will be based. The paper argues that although a great number of questions have been raised by Brexit, not many answers have yet emerged.

WTO Dispute Settlement at Twenty: Insiders’ Reflections on India’s Participation. By Abhijit Das and James J. Nedumpara

Among the increasing number of books providing for case studies of developing country experiences in dispute settlement at the WTO, this book is outstanding by its focus on one of the leading users of the WTO dispute settlement system and by its systematic analysis of almost all of the 44 WTO disputes involving India as complainant (21) or respondent (23) during the first 20 years of the WTO (1995–2015), written by the governmental and non-governmental legal practitioners involved in these dispute settlement proceedings. The Times of India of 6 July 2016 published an editorial on 25 years of economic reforms: From super-beggar to potential superpower, which recalled the continuing transformation of India since it began liberalizing its economy in July 1991. During the Uruguay Round negotiations leading to the 1994 WTO Agreement, India’s claim to be a Third World leader by focusing on the negotiation of ‘special and differential treatment’ provisions in the Uruguay Round Agreements was often criticized, for instance by other developing countries with much higher economic growth rates and more active involvement than India in GATT dispute settlement proceedings. In early 1995, Dr Rao—then director of the legal affairs division in India’s Ministry of Foreign Affairs—asked me (in my role as WTO legal consultant for developing countries involved in WTO dispute settlement proceedings) how India could ever actively use the WTO dispute settlement system in view of its lack of international lawyers knowledgeable of GATT/WTO jurisprudence. This book vindicates not only my reply to Dr Rao that India has thousands of brilliant lawyers who can quickly become experts in GATT/WTO law and adjudication provided the government supports their legal education. It also illustrates why ‘argumentative Indian lawyers’ so often played a key role in developing WTO jurisprudence by exploring the often indeterminate ‘basic principles … underlying this multilateral trading system’ (Preamble to the WTO Agreement).

Trips & Trims: General Principles

The Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS Agreement”) is the first WTO agreement requiring Members to establish a relatively detailed set of substantive norms within their national legal systems, as well as requiring them to establish enforcement measures and procedures meeting minimum standards. The TRIPS Agreement is sometimes referred to as the first WTO agreement that prescribes “positive law”. This factor alone might account for a more than typical level of controversy as the Members deal, in many cases, with adopting rather far-reaching changes to their national legal systems. Prior to the Uruguay Round negotiations (1986-1994) that resulted in a well-rounded Agreement on Trade-Related Investment Measures (“TRIMs Agreement”), only a few international agreements provided disciplines for measures restricting foreign investment and provided limited guidance in terms of content and country coverage. The OECD Code on Liberalisation of Capital Movements, for example, requires Members to liberalize restrictions on direct investment in a broad range of areas. The OECD Code’s efficacy, however, is limited by the numerous reservations made by each of the Members.

The Making of the TRIPS Agreement Personal Insights from the Uruguay Round Negotiations. By Jayashree Watal and Antony Taubman (eds)

The Making of the TRIPS Agreement Personal Insights from the Uruguay Round Negotiations. By Jayashree Watal and Antony Taubman (eds)

The Creation of the Multilateral Trade Court: Design and Experiential Learning

AbstractThe creation of the World Trade Organization (WTO)'s dispute settlement system (DSS) in 1995 remains one of the most puzzling outcomes in international politics and international law in the 1990s. We provide a new explanation for this move to law. We argue that important contextual variables of the negotiations have been largely overlooked by existing explanations, namely ‘experiential learning’. While negotiations to create institutions are characterized by uncertainty about distributional effects, negotiators will look for clues that moderate uncertainty. In the context of the Uruguay Round negotiations, a significant amount of information was drawn from actual practice and experience with the existing General Agreement on Tariffs and Trade (GATT) dispute settlement system. In short, experience gained with judicial institutions and outcomes is important to understand the key results of the negotiations: a legalization leap, more specifically a judicialization of the existing dispute settlement system. We focus on the two dominant actors in the negotiations (the United States and the (then) European Community) and provide evidence for our argument based on an analysis of GATT cases in the 1980s, GATT documents, and in-depth interviews with negotiators who participated in the negotiations.

Assessing the G77: 50 years after unctad and 40 years after the nieo

This article views the history of the Group of 77 through the lens of its relations with unctad’s establishment in 1964, its unsuccessful struggle for the nieo in the 1970s, and the subsequent loosening of ties. The debt crisis of the 1980s, the Uruguay Round negotiations, and the arrival of the wto are seen as crucial forces unravelling the previously close links. Growing differentiation among developing countries and the changing leadership of the G77 are also cited as important influences on its current relationship with unctad.

A View on Future Roles of The WTO: Should There be More Soft Law in The WTO

It has been more than ten years since the Doha Development Agenda (DDA) was initiated and there has been little significant progress in negotiations. Is the World Trade Organization (WTO) losing its relevance in the governance of the international trade order? The writer argues that, despite this pessimistic picture, there will be roles of the WTO in building a new international trade system. Although the WTO has accomplished a tremendous success in the dispute settlement area, it has failed in conducting negotiations to create new rules and this is largely due to the change in power structure within the WTO. The Quadrilaterals (U.S., EU, Canada and Japan) (QUAD) countries which played a central role in the Uruguay Round Negotiation have declined in their powers and influences and the Brazil, Russia, India, China and South Africa (BRICS) have emerged as new trade powers. This has created a stalemate and often negotiations come to deadlock. Faced with this situation, trading nations have concluded many Free Trade Agreement (FTA), and Regional Trade Agreement (RTA), and recently there is a conspicuous trend toward negotiating Mega FTAs such as the Transpacific Partnership Agreement (TPP), Transatlantic Trade and Investment Partnership (TTIP), and the Regional Comprehensive Economic Partnership) (RCEP). Observers say that the multilateral trading system may be taken over by regionalism. However, Mega FTAs have their own limitations and problems. Their operations are restricted to certain regions and number of participants is limited. They will not be the substitute for the multilateral trading system as represented by the WTO. Mega FTAs may incline toward block economy and may create political tensions between one FTA vis-a-vis another FTA. Also production systems and supply chains today exceed far beyond the boundaries of FTAs. Different and sometime inconsistent trade rules of Mega FTAs may produce ‘spaghetti bowl’ situation. It is the sense of the writer that someone has to orchestrate activities of FTAs through which their rules can be converged and operations coordinated and this is a future role of the WTO. The WTO can play such a role through activities of Trade Policy Review Mechanism (TPRM) and the Committee of Regional Trade Agreements. The writer suggests that the WTO tries to establish a ‘FTA Network’ in which FTA officials are frequently convened and discuss trade rules and other matters with the view to convergence. Through such activities, there will be collegiality and esprit de corps among various FTA officials and this creates more harmonized and coordinated rules and activities among FTAs and a more harmonized relationship between FTAs and the WTO. This is a ‘soft law’ approach. Since its establishment, the WTO has concentrated its effort in creating trade rules (binding rules). It is time for the WTO to use a soft law approach as well as hard law approach.

To Open or Not to Open: Korean Rice Market

Although the “tariff only” principle was adopted in the Uruguay Round (UR) negotiations on agricultural products, Korea was able to apply special treatment to its rice and postpone tariffication of rice imports. After two decades of delay, the Korean government officially announced its decision to open its rice market beginning in 2015. This paper examines whether it would be legally possible for the Korean government to postpone the tariffication of rice imports beyond 2014. In order to address the question, this paper outlines the status of Korean rice in the WTO for the last twenty years. Then, it analyzes the arguments of those who are against tarifficating rice and of those who are in support of it. Based on the analysis, it concludes that Korea cannot postpone tariffication under Annex 5 of the Agreement on Agriculture. While it may request for a waiver under Article IX of the WTO Agreement, a careful and thorough examination is required to decide whether to postpone the tariffication beyond 2014.

The Establishment of a GATT Office of Legal Affairs and the Limits of Public Reasonn in the GATT/WTO Dispute Settlement System

The article offers an ‘insider story’ of the establishment of the Office of Legal Affairs in the General Agreement on Tariffs and Trade (GATT 1947) in 1982/83 and of its increasing involvement in assisting GATT dispute settlement panels and the Uruguay Round negotiations on a new World Trade Organization with compulsory jurisdiction for the settlement of trade disputes (Sections I and II). The transformation, within only one decade, of the anti-legal pragmatism in GATT 1947 into the compulsory WTO dispute settlement system amounted to a ‘revolution’ in international law. But the ‘public reason’ governing the GATT/WTO dispute settlement system remains limited, notably by (1) the domination of GATT/WTO decision-making by governments interested in limiting their own legal, democratic and judicial accountability vis-a-vis citizens for their often welfare-reducing trade restrictions and distortions; (2) the deliberate neglect for the customary law requirements of interpreting treaties and settling related disputes ‘in conformity with principles of justice and international law’, including ‘human rights and fundamental freedoms for all’; (3) the treatment of citizens as mere objects of GATT/WTO law and institutions rather than as ‘democratic principals’ of all governance institutions, ‘agents of justice’ and main economic actors; and (4) the deliberate neglect for the GATT/WTO legal obligations of ‘consistent interpretation’, ‘judicial comity’ and ‘access to justice’ in domestic courts in the ‘dispute settlement system of the WTO’ (Sections III and IV).

Definition of Trade in Services: A Critical Analysis

The General Agreement on Trade in Services (GATS) is a relatively new agreement. It entered into force in January 1995 as a result of the Uruguay Round negotiations to provide for the extension of the multilateral trading system to services. With a view to achieving a progressively higher level of liberalization, pursuant to Article XIX of the GATS, WTO Members are committed to entering into further rounds of services negotiations. The first such round started in January 2000. The definition of services trade under the GATS is four-pronged, depending on the territorial presence of the supplier and the consumer at the time of the transaction. International trade in services is defined by the Four Modes of Supply of the General Agreement on Trade in Services (GATS). (Mode 1) Cross border trade, which is defined as delivery of a service from the territory of one country into the territory of other country; (Mode 2) Consumption abroad - this mode covers supply of a service of one country to the service consumer of any other country; (Mode 3) Commercial presence - which covers services provided by a service supplier of one country in the territory of any other country, and (Mode 4) Presence of natural persons - which covers services provided by a service supplier of one country through the presence of natural persons in the territory of any other country. The present paper critically examines these four modes of supply and evaluates the merits of the definition of services contained in the GATS Agreement.