World Trade Organization Law Research Articles

Hometown Heroes: Onshoring, Promoting Local Content & WTO Law

Abstract This article examines the complexities and challenges associated with onshoring manufacturing through local content requirements within the context of World Trade Organization (WTO) law. Governments have intensified efforts to relocate production within their territories, leveraging local content requirements and incentives. This shift is primarily justified by the need for supply chain resilience, public health, and national security, aiming to mitigate risks associated with reliance on foreign suppliers during crises. However, these strategies may conflict with WTO obligations, particularly those concerning trade-related investment measures and subsidies. Using pharmaceuticals as a case study, this article explores the rationale, scope, and implications of WTO rules on local content policies. The analysis provides insights into how nations navigate the delicate balance between enhancing domestic capabilities and adhering to international trade laws.

Challenges Faced by Vietnam and Other Developing Countries in Participating in the WTO Dispute Settlement System (DSS)

The World Trade Organization (WTO) is currently experiencing a crisis in its dispute system, driven by an increasing number of disputes, escalating complexity of case law, and the ongoing blockade by the United States of Appellate Body appointments since 2016. This blockade has resulted in significant delays in the WTO’s litigation process, disproportionately affecting developing countries - majority members of the WTO - due to the substantial financial costs associated with pursuing litigation. This study aims to analyze the challenges faced by Vietnam and other developing nations in navigating the WTO dispute system. Employing a qualitative methodology, this research will draw on primary sources including legal documents, official WTO reports, and governmental statements. The findings are expected to highlight the limitations of current WTO regulations, the inadequate support from the Advisory Centre on WTO Law (ACWL), and the financial obstacles that deter developing countries from participating actively in the Dispute Settlement System.

Carbon pricing for international shipping, equity, and WTO law

AbstractThe International Maritime Organization (IMO) is working on the adoption of a greenhouse gas (GHG) pricing instrument to decarbonise international shipping. This article analyses whether World Trade Organization (WTO) law can limit the implementation of an IMO GHG pricing instrument. In particular, it breaks new ground by analysing the compatibility of current proposals tabled at the IMO with the General Agreement on Trade in Services and the General Agreement on Tariffs and Trade. In addition, it analyses whether WTO law limits the IMO's ability to adopt a GHG pricing instrument that addresses equity concerns via the implementation of exemptions for developing countries, Least Developed Countries, and Small Islands Developing States.

Russia’s Retaliatory Measures in the Context of the Eurasian Economic Union

The paper examines Russia’s retaliatory measures in regulating foreign trade in goods. Specific examples of the introduction of increased rates of import customs duties and the suspension of tariff preferences are analyzed. The grounds for denial of most-favored-nation treatment declared by the Russian side in accordance with the provisions of the World Trade Organization law are examined. A comparison is made of the countermeasures under the legislation of the Russian Federation on foreign trade activities with the countermeasures under the law of the Eurasian Economic Union. The competence of the Eurasian Economic Commission in the area of taking countermeasures under individual international treaties is disclosed. Contradictions and inconsistencies in the regulation of countermeasures by the Treaty on the Union are demonstrated. Conclusions are formulated about the similarity of countermeasures with Russian special economic measures and measures of influence (counteraction), about the practical advantages of the reasons and grounds for introducing countermeasures under Russian legislation over the referral norms of the law of the Eurasian Economic Union. A reasonable division of retaliatory measures into supranational ones, provided for by international trade agreements, and retaliatory measures introduced in accordance with Russian legislation is proposed.

Consistency Testing in WTO Law and the Special Case of Moral Regulation

Abstract There is a debate in World Trade Organization (WTO) law about whether the right to regulate for public interest purposes is conditioned on a requirement to do so consistently. While the early Appellate Body (AB) jurisprudence eschewed consistency testing under the formal legal test, it refrained from explicitly rejecting the practice. Subsequent AB rulings have seemingly adopted a narrow type of consistency testing through the doctrine of ‘legitimate regulatory distinctions’. A case could also be made that WTO tribunals sometimes embrace consistency testing under Article XX of the General Agreement on Tariffs and Trade, although this is not explicitly acknowledged or universally recognized. In Seals, Canada explicitly attacked the European Union’s (EU) seal products ban for its lack of consistency with the EU’s broader animal welfare settings. This dispute provided an opportunity – indeed, an obligation – for the AB to establish a clear doctrine on consistency testing. This article argues that the AB shirked its duty through reasoning techniques that avoided meaningful engagement with the substance of Canada’s argument. The AB did not truly reject consistency testing, but its precise views are hard to glean due to reasoning that is opaque, confused and even contradictory. This article argues that there is a compelling case for consistency testing, at least in certain ‘public morals’ disputes, and that the AB should provide clearer guidance.

Not Trading With the Enemy: The Case of Computer Chips

Drawing on the analysis of international trade law and the research on the regulation of the semiconductor industry in key players, the United States of America (US), the Netherlands, and Japan, this paper explores under which conditions export controls are compatible with the international trade law framework. To this end, it focuses on the scope of national security exceptions under the agreements of the World Trade Organization (WTO) and examines to which extent export controls on the semiconductor industry can be justified under such exceptions. It discusses the direction in which the current practice and jurisprudence of WTO panels are heading and the possible effects of governments’ ‘decoupling’ strategies toward China on shaping international trade law. This paper suggests that governments might have difficulties justifying their imminent cybersecurity and geo-economic concerns under existing security exceptions and that they should consider either clarifying the scope of such exceptions or changing the approach to dealing with national security issues under the WTO framework. Export controls, computer chips, semiconductors, WTO law, decoupling with China, security exception, geopolitical rivalry

Sustainable Development through Regulatory Competition without Effective UN and WTO Legal Restraints?

The current human disasters – like illegal wars of aggression, violent suppression of human and democratic rights, health pandemics, climate change, ocean pollution, overfishing and other biodiversity losses, non-compliance with United Nations (UN) and World Trade Organization (WTO) law – reflect governance failures and insufficient cooperation (section I.) to protect the ‘sustainable development goals’ (SDGs). Since 1950, Europe’s multilevel constitutionalism succeeded in progressively limiting transnational governance failures; yet, it is not followed outside Europe (section II.). Geopolitical rivalries (e. g. among authoritarian and democratic states) and competing national and regional regulations (e. g. on decarbonisation, digitalisation, and securitisation of economies) increasingly undermine UN and WTO legal restraints and judicial remedies (see section III.). The more globalisation is perceived as creating vulnerabilities justifying national security restrictions (e. g. against spread of viruses, weaponisation of interdependence), the more democracies resort to plurilateral second-best responses like trade, investment and environmental agreements conditioning market access on respect for human rights and greenhouse gas reductions (section IV.). This contribution explains why regulatory competition, ‘authoritarian alliances’, and their influence on plurilateral agreements (e. g. in Asia) render ‘constitutional UN/WTO reforms’ and realisation of the SDGs unlikely.

Unilateral economic sanctions and food security

PurposeThis paper aims to highlight the lacunae in international trade law concerning unilateral economic sanctions that impact food security.Design/methodology/approachThis paper adopts a literature review to establish that unilateral economic sanctions impact food security and a descriptive assessment of a few such sanctions. Thereafter, it adopts doctrinal analysis of such sanctions under World Trade Organization law and identifies the gaps to address the specific situation of unilateral economic sanctions that impact food security.FindingsUnilateral economic sanctions are not effectively regulated under international law. Unilateral economic sanctions are known to impact food security not just in the targeted country but also in third countries. Under international trade law, the security exception under Article XXI of the General Agreement on Tariffs and Trade (GATT) does not currently require an assessment of necessity and proportionality of measure. However, there is scope for such an assessment in the future depending on the circumstances, particularly if a measure impacts the rights and interests of third countries by impacting global food security.Originality/valueThe paper conducts a literature review of the impact of unilateral economic sanctions on food security. It highlights the gap in the interpretation of GATT Article XXI when assessing such sanctions that adversely impact the food security of third countries. The paper may be helpful for academics, policymakers, international organizations, non-governmental organisations, etc.

Promoting food security through public stockholding – Indian perspective and challenges at the WTO

PurposeThis paper aims to examine the applicable legal framework, various concerns regarding the price support methodology and the merits and pitfalls of the Bali peace clause that currently shields India’s public stockholding (PSH) policy, to provide suggestions on moving forward in the World Trade Organization (WTO) negotiations.Design/methodology/approachAt the WTO, PSH for food security is considered a trade-distorting price support measure when food stocks are purchased from farmers at administered prices instead of market prices. The price support is measured by a specific methodology stipulated under the Agreement on Agriculture. India is concerned that the price support methodology overestimates the actual support provided to the farmers and makes India susceptible to violating the WTO law.FindingsThe paper explains the domestic implications for India arising due to the applicable WTO law. Given the centrality of India’s PSH programmes in ensuring food security, India must seek more clarity on the interpretation of Article 18.4 of the AoA and the ambiguous provisions of the Bali peace clause.Originality/valueThe paper provides a timely and updated analysis of the contentious issue of PSH for food security, exclusively from the Indian perspective, highlighting the persisting challenges for India in WTO agriculture negotiations. This is timely as many WTO members have raised serious concerns about India’s market price support policies recently and this analysis informs the reader about the underlying issues.

The EU’s new Foreign Subsidy Regulation on collision course with the WTO

The European Union (EU) has become increasingly concerned about government-dominated economies that provide financing for companies engaging in commercial activities in the EU. The concern is that companies receiving these so-called foreign subsides gain an unfair advantage over their European competitors. With astonishing unity and speed, the EU, therefore, has created an ambitious piece of legislation, Regulation 2022/2560, commonly referred to as the Foreign Subsidies Regulation (FSR).The FSR allows the European Commission (EC) to take unilateral action against foreign subsidies that are presumed to distort the internal market. The EU’s plan represents a far-reaching change in the EU’s foreign trade policy and creates a field of tension with the World Trade Organization (WTO). Whilst there is legal uncertainty about the scope of theWTO’s Agreement on Subsidies and Countervailing Measures (SCM Agreement), some of the practices now regulated by the FSR most likely fall under the SCMAgreement which was incorporated into EU law by Regulation 2016/1037 (Anti-Subsidy Regulation).The FSR provides for a conflict rule establishing the supremacy of WTO law in such situations. However, considering the EU legislator’s interpretation of the SCM Agreement, there are considerable doubts as to whether this mechanism will effectively prevent the EC from taking unilateral action in an area that is actually subject to WTO law. In the area of overlaps, the FSR may, therefore, violate the supremacy of WTO law which would lead to the illegality of the FSR. This article addresses this risk and provides an outlook on how the EU could ensureWTO compliance by not applying the FSR if the regulated practice also falls under the SCM Agreement. Subsidy, Foreign Subsidies Regulation, Agreement on Subsidies and Countervailing Measures, SCM Agreement, Anti-Subsidy Regulation, WTO Legality, Foreign Direct Investment, 301 US Trade Act 1974

Intellectual Property and the Politics of Public Good during COVID-19: Framing Law, Institutions, and Ideas during TRIPS Waiver Negotiations at the WTO

Context: To facilitate the manufacturing of COVID-19 medical products, in October 2020 India and South Africa proposed a waiver of certain intellectual property (IP) provisions of a World Trade Organization (WTO) agreement. After nearly two years, a narrow waiver agreement that did little for vaccine access passed the ministerial despite the pandemic's impact on global trade, which the WTO is mandated to safeguard. Methods: The authors conducted a content analysis of WTO legal texts, key-actor statements, media reporting, and the WTO's procedural framework to explore legal, institutional, and ideational explanations for the delay. Findings: IP waivers are neither legally complex nor unprecedented within WTO law, yet these waiver negotiations exceeded their mandated 90-day negotiation period by approximately 18 months. Waiver opponents and supporters engaged in escalating strategic framing that justified and eventually secured political attention at head-of-state level, sidelining other pandemic solutions. The frames deployed discouraged consensus on a meaningful waiver, which ultimately favored the status quo that opponents preferred. WTO institutional design encouraged drawn-out negotiation while limiting legitimate players in the debate to trade ministers, empowering narrow interest group politics. Conclusions: Despite global political attention, the WTO process contributed little to emergency vaccine production, suggesting a pressing need for reforms aimed at more efficient and equitable multilateral processes.

Research on Regional Trade Agreement Exceptions Under the World Trade Organization Law

Research on Regional Trade Agreement Exceptions Under the World Trade Organization Law

World Trade Organization Rules Before Investment Tribunals: Facilitating Cross-Fertilisation While Appreciating Particularities

Abstract The private organisation of production through global value chains has tightened the material connection between international trade and foreign investment while being simultaneously politicised by certain actors. This paper seeks to explore how the rules generated, interpreted, and applied in the World Trade Organization (WTO) have been received by arbitral tribunals deciding investment disputes. Three avenues make this reception possible: first, provisions in investment agreements rendering WTO law directly applicable to investment disputes; second, principles of interpretation allowing recourse to WTO rules as a tool for the interpretation of investment law; third, the authoritative value of WTO case law on points of general international law concerning the settlement of international (investment) disputes. These three avenues allow investment tribunals to build on the law and practice of the WTO with a view to facilitating the cross-fertilisation between the two fields, while appreciating the substantive, procedural and institutional particularities of investment law.

Domestic Investment Incentives in International Trade Law

AbstractDomestic Investment Laws (DILs), a prominent tool of contemporary unilateral International Economic Law (IEL) in the context of the Liberal International Order (LIO), consistently provide for investment incentives as a key aspect of domestic industrial policies geared to influence investment location decisions. The various types of investment incentives include fiscal measures to attract investment, direct subsidies, and other regulatory measures aimed at creating favorable administrative and regulatory conditions for investment. This article analyzes how the provisions of the World Trade Organization (WTO) Agreements contain basic disciplines and set limitations for the distortive effects of investment incentives. It is argued that the relevance of WTO law for domestic investment incentives should not be under-stated; rather, DILs providing investment incentives should be treated as a limited exception to the ongoing move from international to domestic in the era of the LIO.

From Bananas to Large Civil Aircraft: An On-Going Quest for Value-Added in the Computation of Countermeasures at the WTO

ABSTRACT This article discusses the methodology used in the quantification of the level of authorized countermeasures in trade disputes settled under the auspices of the World Trade Organization (WTO)’s dispute settlement system. It discusses the legal framework pertaining to the quantification of the level of the remedies provided for under the WTO agreements in case of failure by the respondent to timely comply with the rulings and recommendations of the Dispute Settlement Body and where no agreement on compensation is reached: suspension of concessions and countermeasures. It analyzes whether the current understanding of ‘damage’ in WTO law is consistent with the prevailing economic reality and suggests an alternate interpretation that would account for value actually added on the territory of the complainant as a basis for quantification of the level of countermeasures. Finally, the article responds to ‘pragmatic’ arguments advanced by those who conceptually oppose to a methodological reform that would authorize countermeasures based on the share of value-added attributable to the complainant rather than on the gross amount of exports of the good affected by the impugned measure.

National-legal and international-legal solutions to the problems of digitalization of transport engineering plants of Kazakhstan

This article reveals one of the facets of a big topical topic formulated in the form of a radical transition of digitalization of transport engineering in Kazakhstan, to electric mobility, autopilot of its products, which should be disclosed through national and international legal decisions. This approach is expedient, because thanks to it, Kazakhstan’s transport engineering receives accelerated development. The purpose of this article is to conduct a systematic analysis of national and international legal problems of the transformation of today’s transport engineering into a digitalized one, in the production process of which various digital technologies, artificial intelligence technologies, robot manipulators at all production sites, automated mechanisms that allow the production of electric vehicles, autopilot-intelligent vehicles for various purposes will be involved. In this regard, researchers pay special attention to the legislative acts of the Republic of Kazakhstan, legislative acts of developed countries, as well as international conventions and agreements ratified and initiated by the Republic of Kazakhstan on the radical transition to a qualitatively new level of the above-mentioned branches of mechanical engineering, electric mobility and autopilot of transport vehicles produced by it. On this basis, the researchers in this article formulated legislative, organizational-legal, managerial- legal and practical proposals for the real provision of the radical transition of the studied branches of transport engineering through 5G technology. The authors use the method of comparative legal analysis of the legislation of different countries with the transport and production legislation of Kazakhstan. The method of scientific forecasting allows researchers to formulate new Kazakh laws and new international conventions relevant to the analyzed topic. The practical and theoretical significance of the study is related to the improvement of transport production and legal ways of digital export of products of Kazakhstani transport engineering enterprises on the basis of the World Trade Organization law.

IMPLICATIONS OF UNITED STATES STEEL TARIFFS ON INDIAN STEEL IMPORT PATTERNS: A CASE OF INDIA’S PREFERENTIAL TRADE AGREEMENTS AND INTERNATIONAL TRADE LAW

The study has attempted to analyse the factors responsible for the surge in imports of steel products in India immediately after the implementation of tariffs on steel products by the United States under Section 232 of the Trade Expansion Act of 1962. To identify the factors, the study has mainly utilized Bilateral Revealed Comparative Advantage, Export Intensity Index, and SMART partial equilibrium modelling tool as methodology. The key finding of the study shows that India witnessed a sudden surge in imports post the implementation of these tariffs, specifically from its preferential trade partners. India’s preferential trade partners enjoy a significant comparative advantage in steel products and have a very high export intensity in India. These countries were also found to be having very high exports to production ratios. It was also revealed that due to the reduction of import tariffs by India, there will be a significant increase in the imports of steel products, not only due to trade creation but also due to significant trade diversion. The study also looked at the compatibility of these tariffs with the General Agreement on Tariffs and Trade (GATT)/World Trade Organization (WTO) law and WTO rulings on these measures to suggest key trade policy measures that can be adopted by India to counter such situation in future. The study suggested two key policy measures that could be adopted by India in the future to tackle any such measures: one is the Auto-Trigger Safeguard Mechanism (ATSM) & the other is the imposition of Suo Motu safeguard measures on steel products.

Turkey–Pharmaceuticals: The First WTO Arbitration for Appellate Review

On 25 July 2022, the World Trade Organization (WTO) issued an arbitration award under Article 25 of the Dispute Settlement Understanding (DSU) on the appeal from the Panel Report in Turkey–Pharmaceuticals. This is the first use of the DSU Article 25 arbitration proceedings for the review of a WTO panel decision. As such, the case is highly significant in that it demonstrates how this alternative dispute settlement method can be successfully utilized to fulfil the function of appellate review after the Appellate Body (AB) became paralysed. Moreover, this innovative use of Article 25 arbitration may suggest a long-term solution in the reform of WTO dispute settlement. With respect to substantive legal issues, this case is also noteworthy, for it dealt with the question of public health and WTO law, a particularly sensitive topic in the post-pandemic era. This essay provides a critical review of the findings of the Panel and the Arbitrators on the substantive issues, while appraising the systemic significance of this first appeal arbitration. WTO Dispute Settlement, DSU Article 25 Arbitration, WTO Reform, Appellate Review, GATT Article XX(b), public health, localization measure

Beyond Multilateral Treaty Reforms

International trade law is primarily concerned with facilitating the flow of goods and services across national borders by minimizing tariff and non-tariff barriers to trade. However, there is a nexus between international trade and the environment. First, international trade is reckoned to have destructive environmental effects. The liberalization of global trade results in increased economic activity, including industrial processes, manufacturing, innovation of new technology, and extraction of natural resources from the earth and the sea, which inevitably results in environmental externalities such as biodiversity loss, pollution, and climate change. Second, international trade law intersects environmental law whenever trade restrictive measures such as import bans, export control and border taxes are adopted by states as a means of achieving environmental goals.[1] Such measures condition market access on the fulfilment of environmental norms related to the characteristic of the product or the process of its production. The World Trade Organization (WTO) currently oversees the largest multilateral regime for international trade. WTO covered agreements expressly recognises some exceptions to trade liberalization commitments for environmental objectives, this policy space is subjected to a system of strict limitations and review procedures designed to protect the global trading system from arbitrariness and disguised restrictions on trade. This scrutinized policy space accounts for the contention that the multilateral trading system constrains environmental regulation and requires treaty reforms for the purpose of adapting to contemporary environmental concerns. Others have focused on a change of approach in the reasoning of WTO adjudicators in their review of trade-restrictive environmental measures. However, the process of multilateral negotiations for new agreements needed to effect rule change is notably complex and has been fraught with deadlocks in the last couple of decades. The stalemate over appointment of members of the Appellate Body has hampered the effective functioning of third-party adjudication in the WTO and the prospect of ‘pro-environmental’ approaches in the interpretation of WTO law on environmental measures. Meanwhile, numerous environment-related measures continue to be notified within the WTO. I argue that notwithstanding the absence of treaty reforms, international trade law continuously evolves through various formal and informal norm-generating practices by member states and trade stakeholders. Viewed through the lens of legal pluralism, these practices contest, modify and transform normative meaning in the multilateral trading system thereby creating a permissive setting for trade-restrictive environmental measures within the framework of extant international trade law.

Russia’s Invasion of Ukraine: A WTO Perspective

Times of emergency in international relations are, indeed, a true test, not just for individuals but also for legal frameworks, including the one of the World Trade Organisation (WTO). This article aims to assess the ability of the WTO legal framework to address challenges that have arisen due to the Russia’s invasion of Ukraine. This is done through a two-pronged approach covering: (1) a general assessment of provisions of the relevant WTO Agreements and their role for addressing the current conflict in Ukraine; (2) an assessment of potential limitations to the system that may preclude effective response to the conflict. The article demonstrates that despite the fact that WTO Agreements do not provide for specific set of rights and obligations to regulate trade in times of war, they contain various mechanisms that help to ‘keep finger on the pulse’ to maintain order on the international trade arena. This is done, inter alia, via the various exemptions and exceptions WTO Members may resort to in times of extraordinary events. It further argues that despite its potential limitations, WTO law provides for a whole range of instruments to dissuade or ward off actions like the unpreceded invasion of Ukraine. WTO, war or other emergency in international relations, Russia’s invasion of Ukraine, GATT 1994, GATS, MFN, customs duties, quantitative restrictions, trade facilitation, expulsion