World Trade Organization Law Research Articles

The WTO and FCTC Dispute Settlement Systems: Friends or Foes?

The paper examines the relationship between the World Trade Organization (WTO) and Framework Convention on Tobacco Control (FCTC) dispute settlement mechanisms. It concludes that since two regimes relate to distinctive legal obligations, one cannot describe the relationship between their dispute settlement mechanisms in terms of conflict of jurisdiction Even if one assumes that such conflict exists a mere existence of an alternative dispute settlement system (i.e. the FCTC) does not preclude a WTO panel from examining a case with respect to possible violation WTO law. The paper also notes that while the FCTC Parties may introduce in the future a new clause in the Convention that will prioritize, over other available alternative mechanisms, its dispute settlement system, this will not affect the jurisdiction of WTO panels (or make a particular case inadmissible). The Appellate Body in its recent report (Peru – Additional Duty on Imports of Certain Agricultural Products), while agreeing that WTO Members can waive their right in the extraneous agreement to have a recourse to the WTO dispute settlement system, also set very strict standards. In particular, such a decision needs to be clearly formulated and can be made only with respect to the settlement of a specific dispute rather than as a general clause. In addition, this cannot lead to the violation of applicable WTO provisions, meaning that a WTO panel will need to examine the contested measure as to its substance anyway. This obviously limits the relevance, under WTO law, of any exclusion clause that may be introduced by the FCTC Parties in the future.

Market definition as value reconciliation: the case of renewable energy promotion under the WTO Agreement on Subsidies and Countervailing Measures

The interrelationship between renewable energy support policies and World Trade Organization (WTO) law is an important recent manifestation of the challenge to reconcile environmental and economic values in contemporary societies. This article strives to contribute to the discussion by using the intersection between policies to support renewable energy, in particular sustainable biofuels in the EU, and the WTO’s Agreement on Subsidies and Countervailing Measures as a case study. The article discusses how efforts to promote renewable energy seem to have become contingent upon the core legal notion of ‘relevant markets’. The article further claims that this contingency is problematic: renewable energy markets are highly complex in practice, and combined with the WTO’s convoluted interpretations of ‘relevant markets’, the legal outcomes struggle to find the proper balance between appropriate support for sustainability and the prevention of protectionist market fragmentation.

The WTO Panel's Approach to the Precautionary Principle in the EC Biotech Case: What Implications for the WTO and International Environmental Law?

The debate on Genetically Modified Organisms (GMOs) is of particular interest to developing countries including Uganda. In the purview of the intersection between Trade and Environment at the World Trade Organization (WTO), the debate has manifested in consideration of the question of the applicability of the Precautionary Principle. This paper analyses the WTO panel’s decision in the EC Biotech case. The main intention is to illustrate that the precautionary principle is an important principle in international environmental law, notwithstanding the fact that it is surrounded by a lot of controversy. States apply this principle to protect their citizens and not even WTO litigation can prevent them from doing that. The principle is vital and its application should be strengthened rather than relegated to some redundant, illogical conception of paranoid environmentalists by the WTO and other international dispute resolution mechanisms. Through its analysis of the EC Biotech case, the paper shows that some aspects of the principle do need clarity and some suggestions are made in that regard. But sometimes, like in the WTO cases, the principle is either not well appreciated or easily confused with the principle of prevention. This paper also shows that the WTO has deliberately adopted a mundane approach to discussing the principle’s status and its implications for WTO dispute settlement as well as international environmental law and international law in general. This approach is deplorable and a waste of time. Instead, the WTO and other dispute resolution mechanisms should work towards a convergence on how to refine and apply the principle in tandem with other non-environmental obligations.

Ask for the Moon, Settle for the Stars: What is a Reasonable Period to Comply with WTO Awards?

AbstractThe World Trade Organization (WTO) dispute settlement process allows a defending Member a ‘reasonable period of time’ (RPT) to implement any findings that its contested measures are inconsistent with WTO law. If agreement on this RPT cannot be reached, Article 21.3(c) of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) provides for the possibility of arbitration on the length of the RPT. The DSU provides limited guidelines on the RPT, stating only that it should not normally exceed 15 months. In practice, Arbitrators have developed the standard that the RPT should reflect the shortest possible period under the domestic legal system of the defending Member to make the changes necessary to comply with the WTO rulings. Our research confirms that in practice Arbitrators have determined this period by ‘splitting the difference’ approximately between the periods suggested by the complaining and defending Member. In addition, the process appears to reward defending Members that request an RPT that exceeds the 15-month guideline in Article 21.3(c).

The Development of World Trade Organization Law. By Gregory Messenger

Gregory Messenger has written an interesting new book, The Development of World Trade Organization Law. The choice of title might appear to imply a focus on development—as in economic development—a subject close to the WTO’s core mandate, but Messenger has decided instead to analyse the process of legal development in the organization. Implicit in Messenger’s choice is a dissatisfaction with conventional accounts of the law’s evolution. These stress the law’s change from static moment to static moment rather than interactively and incrementally. As Messenger sees it, what is needed is an emphasis on law as process. It is an attractive idea, one made more attractive by the fact that we live ‘in a time of intense global interactions’ giving rise to ‘a complex legal framework of competing and interacting jurisdictional influences’ that often seem to find their fulcrum in WTO law. WTO law is a dense site of legal activity. It is a ‘laboratory’ within which his thesis can be tested.

The public–private distinction at the World Trade Organization: Fundamental challenges to determining the meaning of “public body”

The distinction between the public and the private is a conceptual fault line in World Trade Organization (WTO) law. The WTO regulates a range of public activities that impact the ability of private actors to engage freely in the market. Difficulties arise where the nature of the bodies that WTO law seeks to regulate is unclear. The Agreement on Subsidies and Countervailing Measures (SCM Agreement) is a notable case in point. The regulation of subsidies at the WTO is of particular importance, structuring the relationship between governments and markets of WTO members, yet despite the wide scope and importance of the SCM Agreement, there exist theoretical deficiencies underpinning key terms. This paper examines the definition of “public body” under the SCM Agreement as one such example. Moving beyond the competing interpretations offered by panel and Appellate Body reports, this paper suggests that the underlying conceptual foundations of the term are inadequate and offers tentative suggestions to remedy this failing. Specifically, an approach based on the distinction between private and public aims is posited as an alternative. Identifying the importance that conceptions of the “public” have in international law more generally, this paper argues for greater engagement with the conceptual underpinnings of terms such as “public body” so as to provide a meaningful basis for some of the foundational terms in current international law.

India—Certain Measures Relating to Solar Cells and Solar Modules

In a proceeding that challenged the domestic content requirements (DCRs) of India's solar energy program, the Appellate Body of the World Trade Organization (WTO) upheld the panel determination that the Indian government's measures violated its international obligations. The decision offers new insights into certain exceptions for environmental policies under the multilateral trading system and elaborates on the relevance of other international legal regimes to the compliance issue under WTO law. Further, it has the potential to increase export opportunities of many countries in the Indian renewable energy market.

Food Security Amendments to the WTO Green Box: A Critical Re-Examination

This article deals with one among the many significant issues with the World Trade Organization (WTO) Agreement on Agriculture that brought trade negotiations during the Doha Round to a standstill; and it continuous to remain contentious. The genesis of the conflict lies in a proposal to amend the Agreement to exclude certain policies of price support, given by developing countries to answer their food security goals, from the disciplines of the Agreement. The issue has thrown into sharp relief the overall conflict between development oriented goals and trade liberalization within the WTO legal order. This article posits that the most significant opposition to the amendment pretends to be economic in content, while masking an obviously political nature. In order to unmask this, the article investigates some theoretical foundations of subsidy regulation in WTO law, and particularly attacks the concept of distortion which is frequently used to classify subsidies. This article aims to show that as a theoretical matter, the amendment to Agreement on Agriculture is not perniciously trade-distorting as has been projected, and that developing countries can stake legitimate claim to have such amendment passed. Finally, through such argument, the article aims to place the conflict between two normative ideals, trade liberalization and food security in proper perspective.

WTO law and economics and restrictive practices in energy trade: The case of the OPEC cartel

The World Trade Organization (WTO) cannot deal comprehensively with restrictive export practices maintained by energy cartels such as the Organization of Petroleum Exporting Countries (OPEC). The main reason for this is the absence of competition rules in the multilateral trading system. However, in spite of the fact that the WTO does not have rules on competition, it does provide for other rules, such as General Agreement on Tariffs and Trade (GATT) Article XI on the General Elimination of Quantitative Restrictions. This contribution will take a law and economics approach and explore whether restrictive practices in the energy sector as maintained by OPEC could be caught by this Article. It will analyse whether OPEC’s ‘monopolist market power instrument of choice’, namely the administration of production quota on petroleum, could fall within its definition. To this end, this contribution aims to understand the economic and legal rationales and functioning of both the WTO and OPEC.

Ask for the Moon, Settle for the Stars. What is a Reasonable Period to Comply with WTO Awards?

The World Trade Organization (WTO) dispute settlement process allows a defending Member a “reasonable period of time” (RPT) to implement any findings that its contested measures are inconsistent with WTO law. If agreement on this RPT cannot be reached, Article 21.3(c) of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) provides for the possibility of arbitration on the length of the RPT. The DSU provides limited guidelines on the RPT, stating only that it should not normally exceed 15 months. In practice, Arbitrators have developed the standard that the RPT should reflect the shortest possible period under the domestic legal system of the defending Member to make the changes necessary to comply with the WTO rulings. Our research confirms that in practice Arbitrators have determined this period by “splitting the difference” approximately between the periods suggested by the complaining and defending Member. In addition, the process appears to reward defending Members that request an RPT that exceeds the 15-month guideline in Article 21.3(c).

The Status and Effect of WTO Law Before EU Courts

The legal status and effect of World Trade Organization (WTO) law before European Community (EC)/European Union (EU) Courts has been a contentious issue right from the very beginning. Although there have been a number of cases in which the Court of Justice of the European Union (CJEU) has addressed the issue, the rulings have left practitioners guessing as to the applicability and effect of WTO provisions in specific cases. This problem most recently came to a head when the General Court (GC) annulled a regulation imposing definitive anti-dumping duties on certain aluminium foil products from Rusal Armenal, an Armenian company. The GC found that the regulation was inconsistent with the applicable WTO law (in particular the Anti-Dumping Agreement [ADA]) and therefore invalid. On appeal the CJEU set aside the GC’s judgment on the grounds that WTO law can be relied on before the EU Courts only where the EU intends to implement a particular obligation and/or where the EU act at issue refers explicitly to specific provisions of a WTO agreement. When even the GC has difficulty in correctly applying the rules concerning the applicability and effect of WTO law, it’s time to step back and take stock. In this article we analyse the judicature concerning the principles governing the application and treatment of WTO law by Union Courts and develop an analytical framework to explain when and how WTO law can have an effect before these Courts.

Data Exclusivity for Biological Pharmaceuticals: Is New Zealand in Breach of World Trade Organization Law?

The protection of intellectual property (IP) rights is riddled with conflicts of interests. The Agreement on Trade-Related Aspects of Intellectual Property Rights (hereinafter ‘TRIPS Agreement’) introduced standards in order to harmonize IP law enforcement simplifying the task of finding the appropriate level of protection. In some cases IP protective measures result in severe trade restrictions, which can, nevertheless, be justified by virtue of their compliance to TRIPS. However, some trade restrictive intellectual property rights (IPRs) are not covered by TRIPS. This research explores a way in which the enforcement of IPRs falling outside TRIPS can be reconciled with obligations relating to the elimination of trade barriers under the General Agreement on Tariffs and Trade (GATT). The rationale is that TRIPS provides guidance as to the application of Article XX(d) GATT in relation to trade restrictive measures that enforce IPRs. This approach is applied in this article to determine whether, in granting protection to IP in clinical test data relating to biological pharmaceuticals, New Zealand complies with its obligations under the GATT, given that TRIPS does not recognize this IPR and does not provide for its protection.

The Question of Private Standards in World Trade Organization Law

There has been a remarkable increase in recent years in the number of private standards developed by private companies and non-governmental organizations. The increase of these private standards has a significant impact on international trade, thus creating an obstacle for exporters from developing country World Trade Organization (WTO) Members. For this reason, there have also been many controversial discussions on the issue of private standards in WTO Committees as well as in other international fora. In the WTO context, the most frequently asked question is whether private standards are covered by WTO agreements such as the Agreement on Technical Barriers to Trade or Agreement on Sanitary and Phytosanitary Measures. This article will discuss whether private standards are regulated under these agreements and whether they can be challenged under the WTO.

The Extra-Jurisdictional Effects of Environmental Measures in the WTO Law Balancing Process

This article enlarges the discussion on trade and environment conflicts in World Trade Organization (WTO) law by examining different approaches on how to deal with extrajurisdictional effects. WTO Member States have the regulatory autonomy to define whether they want to protect an environmental concern or not. They decide on the level of protection and choose the respective instrument. If environmental policies restrict WTO free trade rules, they need to fulfil balancing requirements, that is the necessity test or the ‘relating to’ requirements and criteria to exclude disguised discrimination. These balancing approaches result mainly from case law where Article XX General Agreement on Tariffs and Trade (GATT)and Articles 2.1 and 2.2 Technical Barriers to Trade (TBT) Agreementwere interpreted. However, if environmental measures restrict not only free trade rules but also competing environmental policies, these tests might not always resolve the legal conflict conclusively. Even the least trade-restrictive measure without disguised discrimination might restrict competing environmental policies. WTO adjudicating bodies recognized this conflict and its dimension of extra-jurisdictional effects. Yet, either the problem was left open addressing other, more obvious violations of WTO law or a recognition of competing policy goals was required while ignoring the possibility of incompatible measures. If, however, parties bring up the extra-jurisdictional effects on their environmental policies being the only violation of WTO rules, more differentiated balancing approaches might be needed. The article discusses three approaches: the comparison of the intensity of extra-jurisdictional effects, the comparison of the connection to the environmental concern and the re-evaluation of the significance of the regulatory goal. It is asserted that they contain shortcomings.

Legitimacy of Global Economic Governance and Effectiveness of the World Trade Organization: An Empirical Investigation of 36 OECD and EU Member States

The aim of this research is to examine the legitimacy of global economic governance and clarify to what extent the convergence of interests among state actors and non-state actors enhances the effectiveness of the World Trade Organization (WTO). The strengthened legitimacy of global economic governance and optimal effectiveness of the actions, operations and efforts of non-state actors ensure cooperation, sustainable development and economic stability. Within the context of state and non-state interactions, the striking role of transnational networks provides that the dispute settlement mechanism (DSM) can be handled in the pre-consultations and pre-mediations stages more appropriately. The research questions can be listed as follows: 1) Has global economic governance a significant influence on the DSM which comprises the consensus-building platforms and structured-dialogue encouragement in pre-consultations and pre-mediations stages of DSM that is dealt by the WTO? 2) Have the incline of multilateral trade system and trade collaborations a significant impact on the legitimacy of global economic governance and effectiveness of the WTO? 3) Do the WTO law and global economic governance have consistency and conformity with the rules and regulations of other international organizations; such as, the International Labor Organization, World Bank and so forth? In general, the research is in a tight manner bound on the criteria and factors of the Comparative Political Data Set 1990-2013 (36 OECD and EU Member States) which was prepared by Klaus Armingeon. Paradigmatically, positivism was applied as a scientific research method and SPSS 22 Software was used for comparative technical analyses.

Um regime autocontido? Apontamentos sobre o direito aplicável aos contenciosos no âmbito da OMC

No cenário da intensificação das relações interestatais, com o aumento da criação de normas e tribunais internacionais, emerge a discussão acerca dos chamados regimes autocontidos, particularmente especializados, e a sua relação com as demais fontes de direito internacional geral. Esse artigo objetiva analisar a posição da Organização Mundial do Comércio (OMC) nesse contexto, questionando se referida organização pode ser enquadrada como um regime autocontido. Para tanto, inicialmente serão analisados os conceitos doutrinários acerca dos regimes autocontidos, para que se observe em que medida, no contexto da doutrina do direito internacional, o direito da OMC pode assim ser definido. Em seguida, abordar-se-á as disposições normativas relevantes presentes nos acordos da OMC. Finalmente, serão abordados alguns contenciosos que poderão auxiliar na resposta à questão aqui proposta. Verifica-se, após essa análise, que existe uma interação das normas da OMC com as normas de direito internacional público e, a partir disso, conclui-se que a organização não é um sistema completamente isolado e autônomo.

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.

Measures with Multiple Competing Purposes afterEC – Seal Products: Avoiding a Conflict between GATT Article XX-Chapeau and Article 2.1 TBT Agreement: Table 1.

One of the issues on which the report of the Appellate Body in EC – Seal Products has stirred considerable debate among legal academics is how to deal with product regulations allegedly having multiple policy purposes under World Trade Organization (WTO) law. For the most part, academic discussions have focused on the Appellate Body’s analysis of this issue under the chapeau of Article XX of the General Agreement on Tariffs and Trade (GATT). This article seeks to contribute to this debate by taking a more systemic perspective and considering also how this type of measure would be appraised under Article 2.1 Agreement on Technical Barriers to Trade (TBT). It begins by examining why measures purportedly balancing multiple competing purposes, as in the EC - Seal Products case, may necessitate justification under WTO law and why the Appellate Body’s self-imposed rational connection requirement is not appropriate to that end. A second argument advanced in this article is that, contrary to what the Appellate Body appeared to suggest in EC – Seal Products, the legal standards for justifying discrimination under the GATT Article XX-chapeau and Article 2.1 TBT Agreement should be essentially the same, and thus conflicting interpretations avoided in relation to the rational connection standard. A two-tier test for bringing in line these justification provisions is suggested which enquires, first, into whether there is a genuinely legitimate rationale for the discrimination, and secondly, whether the discriminatory impact is necessary to achieve that legitimate purpose.

The Future of EU Trade Defence Investigations against Imports from China

China’s ‘Non-Market Economy’ (NME) status, under which the EU may, prima facie, reject the appropriateness of domestic Chinese prices in the calculation of anti-dumping duties, has sustained consistent criticism and constitutes one of the most contentious issues in EU–Chinese bilateral relations. Despite claims to the contrary, the EU may no longer have recourse to the NME methodology after 11 December 2016, by virtue of the expiration of a key provision in China’s Accession Protocol to the World Trade Organization (WTO). Since some of the underlying concerns that triggered the creation of this provision may persist following December 2016, the EU may resort to other alternative methods. Firstly, the European Commission has often used the cost construction method under the Anti-Dumping Agreement to counteract NME like situations. However, the recent ruling of the panel in EU—Biodiesel has found this method to be largely incompatible with WTO law. Secondly, China’s Accession Protocol provides for special benchmarking and state owned enterprises provisions in the context of subsidy investigations that may serve as a means to counteract government subsidization. Thirdly, safeguards could also provide for an alternative method to counteract sharp unforeseen increases of imports causing or threatening to cause serious injury to Union producers. These alternative methods will likely replace the current NME methodology as a major source of contention between the EU and China.

International Standards as Global Public Goods in the World Trading System

International standards have assumed special legal significance in the World Trade Organization (WTO) Agreement on Technical Barriers to Trade (‘TBT Agreement’). This article conceptualizes international standards as global public goods and argues for applying global administrative law principles to vet international standards before they are afforded quasi-legislative status in the WTO law. We traced how the WTO Appellate Body has changed its original hands-off approach in EC – Sardines in 2002 to a more intrusive approach in US – Tuna II in 2012.We submit that the WTO Appellate Body’s new approach to international standards marks a distinctive pathway for the development of global administrative law in producing global public goods. The compliance with global administrative law principles set out in the TBT Committee Decision in turn provides international standardizing bodies with additional legitimacy and accountability. However, contrary to popular opinion, we submit that adoption by consensus is not a necessary condition for a standard to be recognized as an international standard in the world trading system.