World Trade Organization System Research Articles

Article: Plurilateral Agreements and the Multilateral Trade System: Lessons from the Past and Present for the Future

The World Trade Organization (WTO) remains the leading international institution for global trade. As a member-driven organization, the WTO adopts decisions mainly by consensus. Whilst this promotes equality in decision-making between Members, it raises a challenge in a situation where Members are unable to achieve consensus required to adopt a decision. As a result, there is growing debate on whether WTO Members should adopt plurilateral agreements to advance their diverse interests in the system. This paper contributes to this argument by highlighting plurilateral agreements are part of the WTO system and have been used to strengthen the WTO, rather than weaken it and should be used in this manner. This paper highlights that plurilateral agreements are common concepts in the WTO and have been used to strengthen the multilateral trade system. This paper provides an overview of the use of plurilateral agreements during the General Agreement on Tariffs and Trade (GATT) era and under the WTO. It argues that plurilateral agreements have strengthened the trading system by operating as legally binding instruments for WTO plus commitments, a solution to multilateral inaction and an avenue for autonomy within the WTO. It concludes by emphasizing that discussions on the trade system’s reform should consider plurilateral agreements as an avenue to strengthen the multilateral trade system rather than as an alternative to or an escape route from it.

Sustainable development factors and features of resolving grain trade disputes in the WTO

Kazakhstani grain market is an integral part of the agro-food complex (AFC) func- tioning in a difficult macroeconomic situation and requires the establishment of a pricing policy for grain products, the liberalization of trade in grain and processed products, taking into account the scale of effective demand and the standard of living of the population. The relevance of the problem stated in the article is due to the acquisition of profitable opportunities, but with high competitiveness requirements and the risks of being a member of the World Trade Organization (WTO). Purpose. The purpose of the article is to study the theoretical as well as scientific and meth- odological foundations for the grain market development with an assessment of the existing practice of applying WTO system agreements on disputes over trade in grain and its products. Methods. Using the methods of analysis, synthesis and comparison, the individual stages and the procedure for resolving grain disputes are studied tak- ing into account the experience of countries participating in grain disputes. The arti- cle describes the issues of functioning of the grain products market in Kazakhstan. As a result of the study, it was possible to find out that the methods of settling trade and improving the existing legal system through the analysis of WTO dispute reso- lution resources positively affect the development of the agricultural sector in Ka- zakhstan. The development of new trade rules within the WTO framework provides access to the global market for agricultural products and provides assistance on the scale of regional trade agreements.

COVID-19 and Global Distributive Justice

COVID-19 has had a detrimental effect on the world economy. Serious inequality in terms of vaccination has been found between developed countries and developing countries. This article analyzes the development, production, and allocation of vaccines and other essential pharmaceutical products during the COVID-19 pandemic, particularly from the viewpoint of global distributive justice. Analysis of this issue is expected to provide important lessons in preparing for future pandemics. This article analyzes how the world system could be strengthened and suggests ways to reform the World Trade Organization system regarding the special and differential treatment afforded to developing countries.

IMPORTANCE OF OPTIMIZING THE REGULATION OF INTERNATIONAL TRADE AT THE GLOBAL LEVEL

This article aims to discuss potential challenges and advantages developing countries might face by seeking to use World Trade Organization (WTO) negotiations in order to promote their economic growth. The authors analyzed one of the implications of the WTO regulatory system in the framework of global trade liberalization, particularly the Doha Round. The analysis outcomes show the importance and effectiveness of WTO policies towards developing countries and help to formulate the position of such countries in WTO policies and reforms. However, we have to admit that this requires the recognition of benefits by all participants, developed and developing countries, unless it could lead to significant economic cost for all. In order to get a greater beneficial impact or/and minimize potential loss, the authors suggest following multilateral rule-making regulations and carefully conducting a preliminary economic analysis of the country before setting an agreement or dialogue, which will point to differentiation between members and could enhance negotiations or/and avoid risk of failure. The study's theoretical and methodological basis are statistics, analysis, marketing, and management working papers of foreign researchers, regulatory documents, periodical press materials, official legal documentation, and publications relating to the specialized subject area of participation in WTO. The findings of this research might add to the knowledge and understanding of the participation of countries in WTO dispute settlement proceedings and the ability of the WTO system to deal with them.

The boundary between digital goods and E-services in cross-border E-commerce and implication for non-discrimination under the WTO system

Abstract One of the biggest challenges of implementing value-added tax (VAT) collection on cross-border digital goods and services is the compliance with World Trade Organization (WTO) obligations. The lack of a clear distinction between goods and services in the WTO agreements and divergent classifications adopted by states have led to fragmented and inconsistent VAT collection, potentially creating trade barriers in international e-commerce. This article analyses various approaches to classify goods and services including technological neutrality and tradability. It also uses the modernization of Thailand’s VAT system as a case study to demonstrate the complexity of categorizing digital goods and services for VAT enforcement in international e-commerce. It finds that technological neutrality and tradability are key criteria to separate digital goods from e-services for the proper implementation of WTO obligations. The article concludes with remarks on the correlation between categorizing digital goods and services in VAT collection and protectionism in cross-border e-commerce.

Harmonizing Dispute Resolution Mechanisms: Enhancing Efficiency and Synergy between WTO and ISDS System

This research article explores aligning and optimizing dispute resolution mechanisms in international law, particularly within the World Trade Organization (WTO) and Investor-State Dispute Settlement (ISDS) contexts. Addressing challenges arising from the "spaghetti bowl effect" of multiple treaty regimes, it examines the interplay between WTO and ISDS systems, aiming for harmonization and reduced jurisdictional inconsistencies. Traditional coordination methods are evaluated, revealing limitations in adapting to this evolving paradigm. Instead, an "articulation clause" and the "principle of comity" are proposed as innovative approaches for rationalizing dispute resolution. These strategies aim to transcend rivalry between WTO and ISDS mechanisms, expediting impasse resolution in the WTO Appellate Body. The study promotes a strategic shift, encouraging stakeholders to view dual mechanisms as mutually advantageous. This pragmatic outlook empowers informed decision-making, enhancing the global rule of law's predictability, efficiency, and integrity. The ultimate goal is strengthening the WTO's dispute resolution framework and ISDS mechanism, contributing to a more streamlined and cohesive international dispute resolution landscape. The qualitative research methodology has been applied to the following article.

Labour and trade in Asia Pacific: origin, development, and prospects

ABSTRACT Labour rights protection has been an important issue in international trade law, and its significance has gained momentum in recent times. Historically, countries from the Global North and the Global South have advocated opposing positions on a trade-labour linkage in the World Trade Organization system. Despite this long debate, one can observe a rise of labour clauses in bilateral and regional trade agreements. Previous literature has primarily focused on the United States (US) and the European Union (EU) perspectives, neglecting the practices and policies of Asia-Pacific countries. With the emergence of New Asian Regionalism, it is crucial to investigate how Asia-Pacific economies are promoting labour rights through free trade agreements (FTAs). This paper first presents an empirical study of labour clauses in Asia-Pacific FTAs, analysing their number, trend, concentration, and distribution. It finds that there is an increasing number of Asia-Pacific FTAs where labour clauses are inserted and that these provisions have presented a great diversity. However, in terms of substance, the latest legal framework of labour protection in Asia-Pacific FTAs is heavily influenced by the labour policies of the EU, while intra-Asia-Pacific trade agreements display inconsistent practices. This paper also identifies potential complaints that Asia-Pacific countries may face while enforcing labour commitments in FTAs, illustrated by the recent EU-Korea dispute. Overall, this paper provides a comprehensive understanding of the current state of labour rights protection in Asia-Pacific FTAs and highlights the need for further research to investigate the practices and policies of individual countries in the region.

China in the WTO Twenty Years On: How to Mend a Broken Relationship?

AbstractChina’s participation in the World Trade Organization (WTO) has been a rollercoaster of milestones and frictions. China has emerged as a leading trading nation, which has contributed to the expansion of world trade. Some of its trading partners, however, and most vocally the United States, complain that China has reached its new status by eluding its WTO commitments. Under President Trump, the United States reacted strongly against China, almost bringing the WTO (but not China!) to its knees. These actions have been criticized in different ways: Some underline their unilateral character (and the ensuing legal issues they raise), whereas others focus on the regime-neutrality of the WTO, which should, in principle, be able to accommodate Western liberal democracies, developing countries, and socialist countries like China equally. In this short Article, we argue that staying idle is no solution to the China issue and that addressing it through unilateral actions is no solution either. Both approaches would only deepen the current WTO crisis. In our view, the only viable solution for the WTO system requires adding new disciplines to the existing multilateral rules.

Модели кооперации в Восточной Азии на примере Японии

Limitations of the World Trade Organization system have pushed countries to intensify an independent cooperation agenda through development of bilateral relations outside the WTO. In the international economic space, from the geographical point of view, three basic trade blocs can be identified: the European bloc, the North American bloc and the East Asian bloc, with each having its own way of creating cooperation ties. In East Asia, the Big Three of Northeast Asia (the Republic of Korea, Japan and China) as well as Singapore play leading roles in intensification of cooperative ties. At the same time, Japan was one of the first states in the region that based its cooperation policy on several models that became a template for other East Asian countries. Thus, since 2003 the Republic of Korea has been implementing an FTA strategy and has been applying models of cooperation tested by Japan. Major models include: the «North-South» model, the «Flying Geese» paradigm, the «Core-Periphery» model and the «Hub-and-Spokes» model. It is important to note that models do not function separately, but form integration architecture for the countries, based on the objectives and specifics of cooperative ties. At the same time, the initiator in these forms of cooperation is the corporate sector: for example, keiretsu in Japan and chaebols in the Republic of Korea. Business needs are carried to the state/interstate level and can act as a trigger for establishment of regional trade agreements that allow create vertical and horizontal links determining stability of the international economic structure

The Limits of the WTO

In “Governing the Interface of U.S.-China Trade Relations,” Gregory Shaffer argues that legal rules and dispute processes can play a major role in managing conflict and competition between the United States and China. While trade is the central focus of Shaffer's article, he realizes that it cannot be severed from other dimensions of the great power rivalry, including human rights and security issues. Shaffer rejects the idea promoted by some scholars (e.g., Petros Mavroidis and André Sapir) that the World Trade Organization (WTO) should double down on neoliberalism in response to the impact on trade of China's industrial policies by crafting rules that would constrain distinctive features of China's political economy. Such an approach fails to explain why China, a rising power with a strong sense of its own sovereignty and entitlement to its own political and economic system, would ever agree to these constraints. Shaffer and I agree on the basic vision of a pluralist WTO that respects deep differences among states and that is deferential to domestic policies to further legitimate objectives, whether protecting the environment or promoting the observance of basic labor rights around the world. Yet I differ with Shaffer on where the WTO fits into an overall strategy for addressing the global economic governance issues raised by the U.S.-China conflict. While I see the WTO as a useful and necessary part of the picture, I have a lesser estimate than Shaffer of its amenability and centrality to addressing many of the governance challenges that are at play. The post-war General Agreement on Tariffs and Trade from which the WTO system originates still plays a crucial role in providing a structure for voluntary reduction in tariffs through negotiations based on reciprocity and a set of rules for the legal security of tariff concessions. This is reinforced by non-discrimination norms that apply to domestic policies that affect trade. But where non-discriminatory domestic policies are claimed to be trade restrictions, it is much less clear that they should be disciplined multilaterally through a trade-focused institution like the WTO that is not particularly sensitive to the demands of public policy in complex areas of regulation.

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

Remarks by Kathleen Claussen

International trade dispute settlement today encompasses many modes of operation across several different fora. Given this diversity, it is difficult to say whether there is a clear “2.0” version of trade dispute settlement. While such a label may suggest that the World Trade Organization (WTO) Dispute Settlement Understanding (DSU) is the “1.0,” the WTO system is in fact a revision to the prior General Agreement on Tariffs and Trade (GATT) enforcement arrangement. The state of play today for trade dispute settlement belies any clear label apart from what we might try to use to capture a variegated landscape that is constantly in motion. States continue to experiment with compliance and enforcement tools, such that singular directional statements are insufficient to capture what is happening in practice.

Judicial Conflicts between Panels and the Appellate Body in the WTO Safeguard Jurisprudence

Interestingly, there occur huge discrepancies in understanding and interpretation of the safeguard system between the World Trade Organization (WTO) panels and the Appellate Body (AB), even in its core concepts ranging from pre-conditions such as unforeseen developments to import increases, causation, types of injury, and permissible extent of the measure. These phenomena, which originate from the different approaches – contextual or literal – have contributed to the current debacles in the WTO dispute settlement system as well as egregious misuse of safeguard measures by WTO members. Future endeavours to reform the WTO system should therefore pay more attention to the safeguard system, especially where it causes unsettling jurisprudence.

Countervailing Measures and China’s Accession Protocol to the WTO

The existing policy tools of the European Union (EU) to fight against dumping and foreign subsidies do not cover all potential effects of foreign subsidies or support schemes by third countries on the EU internal market. As part of the ongoing discussions to address these distortive subsidies, this article highlights section 15(b) of China’s Accession Protocol to the World Trade Organization (WTO). The provision remains largely unexplored, both in practice and in case law, but offers advantages in its application compared to the normal trade remedy calculation rules: There is no explicit stipulation of an expiration (no fifteen-year timeframe), the threshold to rely on the section is relatively low (only ‘special difficulties’ need to exist), and the way how to determine the benchmarks for the benefit is open (both adjustments and alternative methodologies are foreseen). Particularly, within the stage of examination of ‘special difficulties’, the Commission has considerable latitude and may introduce a shift of burden of proof, putting the onus on Chinese exporters to prove they do not benefit from state subsidies. WTO Members should start conducting well-coordinated countervailing investigations domestically and initiate cases at the WTO at the same time to find out where the WTO system sets the limits of applying section 15(b) Chinese Accession Protocol (CAP). Countervailing Duties, Anti-Subsidy, China’s Accession Protocol, section 15(b) CAP, Industrial Policy, Foreign Subsidies, State-Owned Enterprises, Burden of Proof, Alternative Benchmarks, Subsidy Benefit

New Features of Green Industrial Policy and the Limits of WTO Rules: What Options for the Twenty-first Century?

This article dissects the distinctive features of twenty-first century green industrial policy and discusses its implications for the World Trade Organization (WTO) system. Focusing on the renewable energy (RE) sector, it submits that both RE subsidies and trade remedies targeting RE technologies have been used as green industrial policy instruments albeit the latter have largely escaped WTO scrutiny so far. After critically assessing the interplay between the ‘green’ and the ‘industrial’ components of both types of measures, this article gives an explanation for the actual trends in WTO RE-related disputes and concludes that, contrary to conventional wisdom, the rise of green industry policy does not as much confront the WTO system with the problem of reserving more policy space that it is currently available for good (‘green’) RE subsidies, but rather with the problem of eroding the larger than optimal policy space that currently exists for bad (‘industrial’) trade remedies targeting RE technologies. Building on this, this article critically assesses the existing calls for reform of WTO rules from a trade and climate change standpoint and advocates for solutions à géometrie variable that could allow for addressing the main shortcomings of both the WTO Agreement on Subsidies and Countervailing Measures and the WTO Anti-dumping Agreement.

WTO 체재 개혁과 한국의 다자통상정책 방향 (Reshaping the Multilateral Trade Policy for Korea)

WTO 체재 개혁과 한국의 다자통상정책 방향 (Reshaping the Multilateral Trade Policy for Korea)

When the Going Gets Tough, the Tough Get Going: Advancing Development Through Governance Indicators at the WTO

This article argues that, similar to the World Bank and other global economic affairs institutions, the time has come for the World Trade Organization (WTO) to devise governance indicators to advance economic development. This would change the topography of global trade governance in such a way that it would shift the responsibility on Members to design policies that can enable them reap more benefits from trade, as well as to adopt truly inclusive trade policies. Not only could this help silence the serious criticism, particularly from the developed world, that has called into question the role of trade as a tool for advancing development, but it would also be consistent with the treaty-based development goals that are enshrined in the WTO treaty. In parallel, through the use of indicators, the WTO would be able to address the negative effects of automation and disruptive technologies, by providing a measurement of the extent to which such externalities are offsetting the benefits that should otherwise be attributed to trade liberalization. The WTO has already given signals of its openness to create indicators and that its Secretariat counts with the technical capacity to build complex soft law mechanisms even if the necessary data to build the same implies stepping out of the WTO system.

Trade Rules for the Digital Economy: Charting New Waters at the WTO

AbstractThis Article attempts to explore the challenges in situating a multilateral digital trade agreement within the legal framework of the World Trade Organization (WTO). Section 1 of the article discusses the broad challenges that digitization poses for the international legal framework for trade regulation. I argue first that the traditional classification of products into goods and services under the WTO system is structurally incompatible with the digital economy. I also argue that striking the appropriate balance between trade liberalization and the pursuit of legitimate public policy objectives in a digital trade agreement will be uniquely challenging because certain features that are intrinsic to the digital industry and business strategies of established players in the digital market raise serious anticompetition challenges. A multilateral agreement regulating digital trade needs to acknowledge and address these challenges. Section 2 surveys the efforts that have been undertaken to regulate digital trade as manifested in the WTO Work Program on Electronic Commerce. Acknowledging that the digital trade agenda of the Trans-Pacific Partnership (TPP) agreement could be used as a benchmark for discussions on e-commerce at the WTO, I argue that future negotiations for a multilateral digital trade policy will not benefit from using the TPP's digital trade agenda as a benchmark. The TPP does not reconcile systemic tensions between the digital economy and the extant WTO system or address the anticompetition challenges that are unique to the digital ecosystem.

Restructuring GATT Balance-of-Payments Safeguard in the WTO System

The balance-of-payments (BOP) safeguard provisions in the World Trade Organization (WTO) are still haunted by the structure designed for trade and BOP relationship in the postwar Bretton Woods system. The provisions are not only incompatible with the contemporary monetary system but their legal obscurity also retain unproductive loopholes that can further intrude trade relations. It is timely to clarify a proper function of the WTO BOP provisions against modern systemic risks generating chronic financial crises. This study aims to outline a reform agenda for the General Agreement on Tariffs and Trade (GATT) BOP safeguard provision, suitable to the contemporary WTO and International Monetary Fund (IMF) system. The WTO members should decide to legally abolish GATT BOP safeguard measures for the developed countries. This study also suggests ways to substantively institutionalize coordination between recent developments in the IMF on assessing reserve adequacy and WTO management of trade restrictions for BOP purposes.

When the Multilateral Meets the Regionals: Regional Trade Agreements at WTO Dispute Settlement

AbstractInteraction between regional trade agreements (RTAs) and the multilateral trading system established by the World Trade Organization (WTO) is an issue of significance but nevertheless remains unsettled. This article aims to explore the influence RTAs have generated had on the WTO system, with particular focus on the approach adopted by the adjudicators when dealing with irreconcilable RTA–WTO conflicts. During the development of 20 years’ jurisprudence, WTO adjudicators offered responses to a number of critical questions. On the one hand, direct endorsement of RTA provisions with the effect of prevailing over the counterpart WTO rules appears to be very difficult, either through legal interpretation or application. On the other hand, unlike often being argued, a close review of WTO case law does not reveal a biased adjudicatory approach against regionalism, as compared to other sources of public international law. When dealing with RTA-related matters, the Appellate Body has been advocating an all-encompassing approach featured by the emphasis on the common intention during the interpretative exercise and the promotion for the WTO built-in mechanisms for valid modification. Such an approach is, to a certain extent, misleading in the RTA –WTO context and has led to certain ill-founded adjudicatory choice.