World Trade Organization Jurisprudence Research Articles

The Turn to Safeguard Measures in the Solar Trade War

The growing energy security and climate change concerns have created a huge demand and global market for renewable energy technologies such as solar panels. The race to capture a share of this lucrative global market and other political economy considerations have inspired a trade war. Much of this war has been fought with and against green industrial policy measures such as subsidies tied to local content requirements (LCRs) and trade remedy instruments such as antidumping and countervailing duties. Safeguard measures are the latest additions to the armoury of trade defence measures in this burgeoning trade war. This article examines the dynamics behind and the implications of the turn to renewable energy safeguards for the global effort to accelerate the development and deployment of renewable energy technologies in light of the recent World Trade Organization (WTO) Panel report on US – Safeguard Measure on PV Products. The article makes three interrelated arguments. First, the WTO jurisprudence on renewable energy support measures and rapidly evolving global value chains in renewable energy technologies helped spur the turn to safeguard measures (SGMs). Second, the seal of approval from the Panel will drive interest in the use of renewable energy safeguards. Third, the increased and unfettered use of safeguard measures is detrimental to the transition towards sustainable energy sources. Safeguards, Solar Panels: Renewable Energy, Trade War, DS562, Trade and Environment

THE RELATIONSHIP BETWEEN THE DSU ARTICLES 21(5) AND 22 AND THE ISSUE OF THE LITIGATION DEADLOCKS IN THE DISPUTE SETTLEMENT SYSTEM OF THE WORLD TRADE ORGANIZATION

In December 2019, the World Trade Organization (WTO) litigation system was deadlocked. One of the important concerns which arose then was how the blockage of the litigation system could affect Dispute Settlement Understanding (DSU) procedural provisions governing the suspension of concession and other obligations. In the light of this these circumstances, we need to discuss the “sequencing” issues regarding the claimant’s procedural right to seek authorization for suspension in accordance with Article 22 of the DSU and implementation procedure envisaged in Article 21(5). Thus far, the WTO judicial bodies have been inclined to the position that there is no “sequencing condition” for exercising procedural rights provided in Article 22. Contrary to the position of the WTO jurisprudence, academics mostly advocate that the relationship between Articles 21(5) and 22 of the DSU exists through sequencing prerequisite. However, this problem needs to be redefined in the light of the irregular circumstances that may be created by the blockage of the litigation system. Therefore, exclusively in situation where litigation is in blockage, the claimant should be entitled to commence the Article 22 procedure, without prior employment of the implementation procedure in accordance with Article 21(5) of the DSU. In normal circumstances, the claimant must respect a sequencing prerequisite.

The Uneasy Interplay between Digital Inequality and International Economic Law

Abstract This article addresses the questions of what role international economic law has played in the story of digital inequality’s emergence and evolution and how international economic law can reduce digital inequality instead of enhancing it. The first part of this study illustrates the uneasy interplay between digital inequality and international economic law. At the network layer, the economic benefit of the General Agreement on Trade in Services’ Mode 3 (foreign investment) market access commitments in the telecommunications sector has never been realized in many developing countries and least developed countries (LDCs). There is a missing link between the consequences of trade liberalization and broadband investment. At the application layer, today’s platformization of services was an ‘unforeseen development’ at the time the World Trade Organization (WTO) was established. Through the pro-liberalization of WTO jurisprudence, members’ decades-old Mode 1 (cross-border) market access commitments have played more than a marginal legal role in global datafication. The second part of this study discusses how international economic law can confront and potentially redress that inequality. In the context of trade and development, it remains to be seen how the WTO members can find the common ground needed to balance digital trade liberalization and development needs. Unless infrastructure concerns from developing countries and LDCs are addressed, the ongoing WTO e-commerce trade deal may end up being labelled the Digital ‘Haves’ Trade Agreement. In the context of trade and competition, the increasing inequality in digital platforms calls for a set of international competition rules to appropriately address market power in the data sector. By imposing cross-border disciplines for competition policy and thus curbing the power of big digital platforms, the proposed WTO Data Reference Paper may well be an effective instrument to address the second dimension of ‘digital inequality’ – data colonization.

The Waiver of Certain Intellectual Property Rights Provisions of the TRIPS for the Prevention, Containment and Treatment of COVID-19: A Review of the Proposal under WTO Jurisprudence

AbstractThis article is a critical legal analysis of the proposed TRIPS waiver under World Trade Organization (WTO) law. It reviews the existing TRIPS flexibilities and the “August 2003 TRIPS waiver”, highlighting the obstacles to achieving the goals of these legal instruments. It demonstrates that numerous critical TRIPS flexibilities, notably TRIPS Article 31bis, are ineffective, prompting some countries to submit a new waiver proposal to the WTO. It highlights several WTO rules that are also quite ambiguous. This paper argues that a WTO clarification might be an alternative to the new TRIPS waiver proposal if it is ultimately rejected due to a lack of consensus among WTO members. Finally, this article emphasises the importance of adopting a balanced approach that may simplify complicated TRIPS rules, decrease the risk of trade-based retaliation and improve collaboration in knowledge transfer and scaling up the manufacture of and access to lifesaving vaccines, pharmaceuticals and healthcare equipment.

EU-Ukraine Arbitration: Will WTO Law Become More Deferential Outside the WTO?

The first dispute brought by the EU under its bilateral trade agreements, Ukraine – Export Restrictions on Wood, was in many respects a typical World Trade Organization (WTO) case. A panel of three arbitrators, including two prominent and highly experienced WTO adjudicators, was to rule on consistency of the respondent’s export bans with Articles XI and XX of the General Agreement on Tariffs and Trade, incorporated by reference into the EUUkraine Association Agreement. The latter, moreover, explicitly requires that arbitrators rely on the WTO jurisprudence – which they, technically, did. Yet, the arbitration panel appears to have shown more deference to the respondent than any WTO panel ever has (or would). By contrasting the reasoning of the arbitration panel with that of WTO panels deciding similar issues, the article questions whether WTO law may take a more deferential path outside the WTO. WTO law, GATT, Article XX(b), EU-Ukraine Association Agreement, wood export ban, dispute settlement, judicial deference

Confronting the ‘Non-Market Economy’ Treatment: The Evolving WTO Jurisprudence on Anti-Dumping and China’s Recent Practices

This article offers one of the first comprehensive reviews of the evolution of the World Trade Organization (WTO)'s jurisprudence on anti-dumping (AD), focusing on the systemic issue of what flexibility the WTO AD Agreement provides for Member states to tackle market distortions caused by government intervention. This review is undertaken in the context of the longstanding AD practices of some major WTO Members in treating China as a non-market economy (NME). It argues that while WTO tribunals have created flexibilities for AD authorities to address such distortions, they have left some critical issues open for future consideration. The flexibilities and loopholes in the case law can be used by all WTO Members and have been increasingly utilized by China in its own AD practices. Thus, the current law has arguably 'multilateralized' the NME treatment under the general framework of the WTO and may incentivize tit-for-tat use of AD.

A Story Half Told—Selective Benefit Assessment in the New US CVD Rule for Exchange Rates

ABSTRACT The new countervailing duty proceeding rule of the United States on exchange rates aims to address currency undervaluation through a subsidy tool under the Agreement on Subsidies and Countervailing Measures. As there is no prohibition in the Agreement on Subsidies and Countervailing Measures (ASCM) making macro-economic policies off-limits from the reach of subsidy norms, exchange rates can be subject to countervailing duty proceedings. However, there are specific requirements to be met under the ASCM and World Trade Organization jurisprudence. Most notably, the new countervailing duty proceeding rule arguably fails to meet the ‘benefit’ analysis requirements. It takes into account the effect that negatively weighs on foreign exporters subject to a countervailing duty proceeding while ignoring the one that positively weighs. This skewed benefit analysis of selective nature is difficult to sustain under the ASCM and its jurisprudence. A more detailed and thorough benefit analysis is needed to make this new scheme work in a World Trade Organization (WTO)–consistent manner. The new countervailing duty rule showcases structural problems addressing macro-economic policies through a subsidy framework.

The Procedural Inconsistency of the Envisaged EU Enforcement Regulation With the EU’s WTO Obligations

With the appellate function came to a halt, the WTO is unlikely an attractive venue to settle international trade disputes at the moment or in the near future. To overcome such impasse, the European Union has come up with two initiatives to discharge of its right to enforce international trade rules. Multilaterally, the EU led an establishment of a multi-party interim appeal arbitration arrangement (‘MPIA’) to set up an arbitration mechanism based on Article 25 Dispute Settlement Understanding (‘DSU’) – that mirrors the main features of the WTO Appellate Body (‘AB’) system, to solve trade disputes with other participants of the Agreement (so far, the MPIA has attracted 21 participants, including the EU). At the EU level, the European Commission (‘the Commission’) has made the Proposal to amend Regulation (EU) No. 654/2014 (‘EU Enforcement Regulation’) concerning the exercise of the EU's rights for the application and enforcement of international trade rules (‘the Proposal’) so as ‘to protect its trade interests despite the paralysis of the multilateral dispute settlement system in the World Trade Organization (WTO).’ This contribution will analyse the Proposal and will argue that, under WTO jurisprudence, the proposal if adopted might be incompatible with EU’s procedural obligations under the Dispute Settlement Understanding of the WTO (‘DSU’).

WTO Jurisprudence on Protection of Marine Living Resources: Policy Considerations for the Chinese Belt and Road Initiative

The World Trade Organization (WTO) aims at free trade between states. The Chinese Belt and Road Initiative (BRI) supports these aims. By improving infrastructure on the Maritime Silk Road, it facilitates the transport of goods. But the likely increase in transport of goods on the Silk Road may have a negative impact on the environment. This paper addresses whether states can use environmental concerns under WTO law as a legitimate obstacle to trade on the Maritime Silk Road. Under WTO law, WTO Members may apply trade-restricting measures to protect the environment. The balance between the protection of the environment and free trade has materialized in a number of cases in the WTO dispute settlement system. This paper focuses on two questions. First, it discusses whether a state can apply WTO law to protect marine living resources if they are outside the territory of the state. Second, it discusses whether pollution from transport of goods can be a legitimate reason to apply the WTO exceptions to protect the environment. The WTO quasi-judiciaries have accepted harvest methods of shrimps, harvest methods of tuna, and seal hunting as legitimate reasons, but have so far not tried pollution from transport. The paper concludes that states may protect migrating marine living resources outside their territories, and that restrictions on transport to protect marine living resources is a legitimate policy under WTO law. However, the legitimate basis for limiting vessels is reduced if there is strong enforcement of the environmental policies, which China has suggested in its BRI policies, and if China in general engages widely in multilateral environmental treaties. However, should China not take a lead in the protection of marine living resources and in seeking compliance with international environmental law, China becomes vulnerable to other states’ protectionist measures under the guise of protection of the marine living resources.

Sustainable Development in World Trade Law: Application of the Precautionary Principle in Korea-Radionuclides

Sustainable development (SD) is one of the objectives of the World Trade Organization (WTO), and in order to achieve SD, the precautionary principle (PP) is one of the most appropriate means that can be used. This study aims to explore whether the WTO promotes SD through its legal interpretation of the PP and to provide suggestions for realizing the balance between trade liberalization and sustainable development in the WTO. To this end, this study conducts a case analysis on the Korea-Import Bans, and Testing and Certification Requirements for Radionuclides (DS495) dispute from legal and political-economic perspectives, and finds that the WTO’s rigorous examinations of the four requirements presented in Article 5.7 of the Agreement on the Application of Sanitary and Phytosanitary Measures (the SPS Agreement) remain a significant impediment for the incorporation of the PP into WTO jurisprudence, and can also cause systemic problems. This study suggests that efforts from three dimensions—the WTO adjudicating parties, the government, and the lobbying groups of importing countries—are required to promote SD in the WTO.

Living Without the Appellate Body: Hegemonic, Fragmented and Network Authority in International Trade

The Appellate Body has asserted extensive authority over the rules governing global trade relations, proclaiming its ultimate authority to determine the prevailing interpretation of the rules of the World Trade Organization (WTO) as well as to control the extent to which extra-WTO norms can validate deviations from WTO rules. Its dominance over the trade regime is now threatened by two developments: the multiplication, sophistication and increased significance of regional trade agreements and the crisis over Appellate Body appointments. Examining these developments, this paper argues that the Appellate Body’s ‘hegemonic authority’ over the trade regime could be replaced by ‘fragmented authority’, with various adjudicators making decisions independently without possibility to refer divergences to a centralizing authority. The continued coherence of the trade regime may depend on the ability of trade adjudicators to establish ‘network authority’, providing the interpretive community that operates the trade regime with security and predictability as regards the application of norms. Three elements may be key for this: references in regional trade agreements to WTO rules and jurisprudence, the predisposition of adjudicators to pursue coherence and follow past decisions, and the existence of repeat players in trade adjudication who are themselves Members of this interpretive community.

Sustaining Multilateralism from the Bench

The ever-increasing surge in regional trade agreements (RTAs) over the past two decades has generated growing friction between regionalism and multilateralism in international economic governance, accompanied by serious challenges to the World Trade Organization (WTO) as an institution and a legal system. In this state of play and with the WTO’s negotiating arm trapped in persistent stalemate, several questions have arisen: What role, if any, has been played by the WTO dispute settlement system (DSS) in responding to the challenges posed to the WTO multilateral trade regime by RTA proliferation? What effect have these systemic challenges had on WTO jurisprudence? And how have these challenges shaped the judicial choices made by the WTO DSS in cases implicating substantive and jurisdictional questions located at the WTO-RTA interface? Based on a close analysis of WTO cases involving RTA-related issues, and unique empirical evidence generated through interviews with WTO practitioners having first-hand knowledge of the DSS’s work and the cases examined, this article shows that the DSS has not remained indifferent to the challenges presented to WTO rules and institutions by the increasing economic regionalization. Rather, in the series of RTA-related cases reaching its docket, the DSS has engaged itself in a long and enduring quest for sustaining the multilateral trading system from the bench. This quest has evolved along two parallel and mutually reinforcing trajectories—the substantive and the jurisdictional. These trajectories, when woven together, demonstrate how, in the shadow of textualism, a steady body of DSS jurisprudence emerged, animated by a judicial philosophy of seclusion from and ascendency over regionalism, and aimed at preserving the multilateral legal order in the face of the unabated surge in RTAs. This judicial philosophy, the article concludes, nevertheless entails some challenges and risks of its own, to the WTO and, more generally, to international economic law.

A Defining Act: How TPP Rules Are Undermining WTO Jurisprudence

Despite the withdrawal of United States from the Trans-Pacific Partnership Agreement (TPP) agreement, the TPP continues to remain relevant as it carries the potential to shape future bilateral and multilateral negotiations on trade issues. This article argues against the suitability of TPP rules for future negotiations at the World Trade Organization (WTO) as these rules undermine, if not directly contradict, WTO’s treaty provisions as interpreted by its adjudicating bodies. The article elaborates three instances where TPP rules are in direct conflict with WTO jurisprudence. Moreover, TPP disciplines on these three areas incorporate the arguments that were advanced by the United States (US) in disputes at the WTO and were rejected by its adjudicating bodies. This shines fresh light on the ‘norm enterpreneuring’ role of the US within the TPP and also demonstrates how TPP rules reconstruct the meaning of WTO’s treaty provisions in a manner that is most suitable for the parochial interests of the US.

China’s market economy dilemma and its interplay with EU anti-dumping law

ABSTRACTOn 10 July 2017, a World Trade Organization (WTO) panel was composed to hear the dispute between China and the European Union (EU) regarding some of the EU’s regulations on the calculation of dumping margin against Chinese imports. Although the United States (US) has also been at the forefront of invoking particular market situation (PMS) in relation to dumping investigation against imports from China, this article focuses on China-EU relations vis-à-vis WTO anti-dumping law. It argues that although Paragraph 15(d) of the Accession Protocol expired in December 2016, the substantive content of the concept of Non-Market Economy (NME) in the calculation of dumping margin in the EU has not disappeared. This article further examines Paragraph 15 of the Accession Protocol of China, as well as certain WTO jurisprudence in relevant cases, in order to shed some light on how the issue of China’s market economy status may be resolved going forward. The article argues that due to the expiry of Paragraph 15(a)(ii), the application of third country prices in the calculation of dumping margin does not seem to have legal support from the text of the Accession Protocol or the negotiating history of China’s Accession Protocol. Moreover, the article examines the notion of legislation as such as opposed to mandatory legislation and concludes that the jurisprudential progressivism of the WTO Dispute Settlement Body (DSB) reveals that both types of legislation can be subject to WTO complaint. The article concludes with some remarks on how going forward this contestation can be settled.

Untangling the International Responsibility of the European Union and Its Member States in the World Trade Organization Post-Lisbon: A Competence/Remedy Model

The aim of this article is to shed light on the legally important and politically sensitive question of the respective responsibility of the European Union (EU) and its member states for the performance of World Trade Organization (WTO) obligations. Specifically, it seeks to challenge two propositions often found in the literature on the basis of a rigorous analysis of WTO dispute settlement practice. First, the claim that the EU’s exclusive responsibility for breaches of WTO law by its member states has been widely accepted by other WTO members and dispute settlement organs is not well grounded in existing WTO jurisprudence nor supported by recent post-Lisbon WTO dispute settlement practice. Second, and contrary to what some EU law scholars appear to suggest, what has been decisive in assigning international responsibility in the WTO is not the division of external (treaty-making) competences between the EU and its member states but, rather, the allocation and exercise of internal (treaty-infringing/treaty-performing) competences. In this sense, the Treaty of Lisbon has not fundamentally changed how the issue of EU/member states international responsibility is to be approached in the WTO, insofar as the EU member states remain members of that organization in their own right. With this in mind, a redefined ‘competence/remedy’ model is put forward to help us untangle ‘who is responsible’ to third parties for breaches of WTO law.

Debunking the Myth of ‘Particular Market Situation’ In WTO Antidumping Law

This article explores the issue of ‘particular market situation’ (PMS) in anti-dumping practice. PMS has become one of the most controversial issues in antidumping policy, as reflected for example in the bilateral trade activities between China and Australia, and will soon become a prominent issue at the World Trade Organization (WTO) level once the non-market economy assumption (which is currently allowed under China’s WTO Accession Protocol) expires on 11 December 2016. Essentially, since some of the underlying concerns that led to the creation of such an assumption may endure following December 2016, countries may want to resort to other alternative methods to counteract Chinese imports. One such alternative is to resort to the notion of PMS which is foreseen in the WTO Antidumping Agreement. It is, therefore, important for the WTO tribunals to standardize the law and practice in relation to PMS. This article argues that the existence of a situation in a market, such as government interventions by means of regulation or financial assistance, does not in themselves constitute a PMS within the meaning of the Antidumping Agreement. Rather, a determination of a PMS must be based on an assessment of the comparability between domestic sale price and export price of the subject goods. A PMS should not be found to exist if an alleged price distortion has affected the two prices even-handedly such that a proper comparison of the prices would not be precluded. It is the responsibility of investigating authorities to undertake such an inquiry into comparability. Without such an inquiry, a finding of PMS cannot be justified and would likely result in a comparison between an undistorted normal value and a distorted export price in a manner contrary to the ‘proper comparison’ or ‘fair comparison’ standards which are enshrined in Article 2 of the Antidumping Agreement. The proposed approach to PMS finds support in the Antidumping Agreement itself, as well as in negotiating records of the General Agreement on Tariffs and Trade (GATT) and the WTO, and GATT and WTO jurisprudence. Importantly, it promotes free trade by prohibiting unjustified inflation of dumping margins and discouraging tit-for-tat abuse of PMS.

Advancing Global Public Health Standards: A Precarious Balance Five Pivotal WTO Cases

This paper examines five World Trade Organization (WTO) disputes and their related settlements to explore the primacy of public health concerns in trade-related matters. It asks first, whether the WTO successfully manages the interface between trade-related questions and global public health concerns? Second, we explore if the WTO decisions reflect strong and effective public health standards? The five cases considered include the French asbestos ban, the EU and US’ restriction of world access to generic drugs, the US-Indonesia dispute related to clove cigarettes, the US-EU disagreement over hormones in beef and Thailand’s attempts to introduce plain packaging for alcohol products.This paper concludes that, despite moments of hope that the WTO might be more than just a trade organisation, the WTO’s major focus is trade, with public health occupying a very small role in its decision making in judicial culture. Even when a world consensus exists among scientific and policy experts that a product is detrimental to human well-being, member states’ trade interests are given greater weight than the immediate need to protect citizens’ health and raise global health standards – access to generic drugs, protection against carcinogenic material such as asbestos and restriction on cigarette packaging. WTO decisions appear to be made in a legal black hole without linkage to human rights legal protection of the individual and the collective. Because the WTO jurisprudence is decided on the case by case basis, frequently the decisions of WTO panels while technically correct they fail to have a larger view of global public health issues. The paper concludes that the WTO is in need of rebalancing its trade vs. health foci, and of heightening the importance placed on public health, in order to address the needs of a 21st-century world and to gain global citizens’ trust. Against a weak trade vs global health regulatory regime, the paper illustrates how compliance with WTO decisions in the area of global public health leaves a great deal of room for foot dragging by governments which emboldens big Pharma and other global actors to use the WTO’s commercial norms to armour plate themselves against progressive change. Hence progress towards strengthening global health standards is unlikely to come from the WTO’s current culture of jurisprudence.

Article 2.2 of the TBT Agreement: More Complicated than Necessary?

Article 2.2 of the Technical Barriers to Trade Agreement requires that technical regulations shall not be more trade restrictive than necessary. The legal standard of Article 2.2 is composed of various elements which have been developed in World Trade Organization jurisprudence. This article explains the different components of Article 2.2, and presents a critical analysis of the issue of ‘risks of non-fulfilment’.

The Challenges of China’s Recent FTA: An Anatomy of the China-Korea FTA

As the biggest Chinese free trade agreement (FTA) to the date of its signature, the China-Korea FTA provides an amazing case study for the development of China’s recent FTAs. This paper analyzes major challenges in its rule development, implementation, and interpretation. The author argues, first, that rule development encounters market liberalization, regulatory cooperation and coherence, as well as sectoral challenges. Second, the fundamental issue for rule implementation and interpretation is the lack of a ‘systemic’ response to the relationship among FTA chapters, and to the relationship among the China-Korea FTA, domestic law, and international law. Finally, the relationship between the China-Korea FTA and World Trade Organization (WTO) law deserves special attention, which consists of five categories of circumstances. A number of questions are analyzed: which WTO rules apply to the China-Korea FTA? Do WTO rules apply to WTO-plus obligations? Can WTO jurisprudence be applied to the China-Korea FTA? The issue of the applicability of WTO rules and jurisprudence to FTA obligations including WTO-plus obligations remains open. These challenges are not unique to the China-Korea FTA and are likely to exist in other Chinese FTAs.

Settling the Debate of Animal Welfare, Public Morals and Trade: In the Light of the EC-Seal Products Case

The EC-Seal Products is a case which caused considerable debate and attracted the greatest public attention in the recent years raising fundamental questions about trade liberalization, animal welfarism and pluralistic public morals under the World Trade Organization jurisprudence. The public policy implications of this unprecedented decision are far-reaching as both the Panel and the Appellate Body for the first time clarified that trade-restrictive regulatory measures qualify as exceptions under Article XX of the General Agreement on Trade and Tariffs (GATT) despite the fact that these measures contain their own exceptions which compromise the policy objectives of the same measures by taking into account other policy objectives. The European Union introduced the policy as a response to the moral outrage concerning the inhumane killing of seals. The decision readily acknowledges the importance of a blanket trade ban on grounds of animal welfare in an era of increasing globalized trade. The interpretative issues inter alia touched upon the legitimacy of the exceptions to the Seal Regulations and the scope of animal welfare vis-a-vis the public moral exception under Article XX (a) of the GATT. The present article critically analyses the Appellate Body ruling in the EC-Seal Products dispute in the light of the growing concern regarding animal welfare and the resulting legislations across the globe.