WTO Law Research Articles

Between Law and Politics: Nuclear Non Proliferation and State-Induced Compliance in International Trade

The US economic sanctions (including sweeping export restrictions) against Iran and Russia, while presented as aiming at non-proliferation, appear to have ineluctably undermined the negotiations to revive the Joint Comprehensive Plan of Action, an agreement meant to deter Iran from pursuing nuclear status. The present paper approaches this situation as a telling example of how unrestrained export control can come into tension with international security, in this case within the nuclear non-proliferation regime. Drawing on this illustrative case, this article seeks to formulate more general conclusions as regards the potential side-effects of broad export restrictions, their necessary limits under WTO law, and the significance of the WTO system in the non-proliferation process. First, this paper contextualises export controls as part of this regime, and then addresses the causal implications of the above situation, concluding that it does demonstrate the involvement of a foreign policy element that is ultimately at odds with the stated goals of nuclear non-proliferation. Finally, the paper examines the substance of Article XXI of the General Agreement on Tariffs and Trade, which the sanctioning State will most likely use to justify its trade restrictions in a WTO dispute. It finds that a good faith interpretation and available practice indicate that the exceptions of Article XXI involve demanding standards and are to be interpreted so as to screen out, as far as possible, measures that covertly pursue other (e.g. foreign policy) interests. Meanwhile, non-WTO Member States could try to advance cases through friendly Members if they could establish a breach of WTO law that concerns the latter, though the chances are admittedly very thin. Ultimately, the WTO system is revealed as a valuable element in ensuring and maintaining international security and non-proliferation.

EU Carbon Border Adjustment Mechanism: Legal Challenges and Relevance in Light of the Current Sanctions Regime

Carbon Border Adjustment Mechanism (СBAM) is one of the European Union's Green Deal initiatives aimed at creating a “climate neutral” economy. The specific feature of this mechanism is the creation of additional costs when importing goods from non-EU countries, the production of which is associated with emissions of large amounts of greenhouse gases. The measure implies the reporting of carbon emissions amount and the sale of CBAM certificates depending on the amount of carbon emissions resulting from the production of imported goods. The author of the article analyses the dynamics of CBAM legal framework development as well as challenges that CBAM may face following its entry into force given the current trade restrictions introduced within the sanctions regime against Russia. The article also addresses challenges to CBAM in terms of its consistency with WTO law. The conclusion is made that new obligations for EU importers imposed by CBAM together with import bans and trade restrictions against the former major exporter of CBAM-covered goods to the EU would be very burdensome for EU importers. Furthermore, the compatibility of CBAM in its current form with WTO law non-discrimination standards is questionable; CBAM has been subject to criticism by the WTO members that are likely to be affected by the measure. This explains the recent shift of CBAM entry into force from January to October 2023 and could be a ground for further adjustment of CBAM rules.

Tariff Flexibility Amid Formation of Preferential Trade Agreements: WTO Law vs. PTA Law

AbstractThis paper examines the legal ramifications of using tariff flexibility arising from GATT unbound tariff lines or tariff overhangs under both WTO and preferential trade agreement (PTA) law when flexibility is exercised preferentially for PTA partners. Under WTO law, a WTO member that is a party to a PTA under GATT Article XXIV is required to use tariff flexibility on a non-discriminatory basis. However, PTA obligations including tariff elimination commitments and a standstill clause prohibit the WTO member from raising applied tariffs on imports from the PTA parties, thereby preventing the use of tariff flexibility on a non-discriminatory manner. In contrast, a WTO member entering into a PTA under the Enabling Clause may use tariff flexibility discriminatorily without violating WTO law. A WTO member has greater legal latitude in utilizing tariff flexibility if it forms a PTA under the Enabling Clause rather than under GATT Article XXIV. The discriminatory exercise of tariff flexibility by some WTO members in conformity with PTA obligations, but in violation of WTO law, is further evidence of the fragmentation of the world trading system, where WTO law is facing its limits.

Legal bases of the state agrarian policy of Ukraine regarding sanitary and phytosanitary measures under martial law

The article is devoted to the study of the legal foundations of the state of the agrarian policy of Ukraine regarding sanitary and phytosanitary measures in the conditions martial law in Ukraine. On the one hand, Ukraine’s membership in the WTO makes it possible agrarian business to gradually integrate into the world market economy, and with the other - puts forward the obligation to the state to implement it in the national one legislation, tools for protecting the interests of the national agrarian producer both in domestic and foreign agricultural markets. To such tools include sanitary and phytosanitary measures. Agreement on sanitary and phytosanitary measures WTO determines that their main purpose application is improvement of human health, animal health and phytosanitary situation in the territory of all members.
 State agricultural policy in the field of sanitary and phytosanitary measures is based on the principles of WTO law, which include the principle of sovereignty (principle of independence) and a system of anti-protectionist principles. At the same time, in modern conditions, the peculiarities of the use of sanitary and of phytosanitary measures regarding objects of regulation during martial law is based on the principles of extraterritoriality, deregulation and priority security of business entities and specialists of the State Production and Consumer Service. The main changes regarding sanitary and phytosanitary measures, which introduced in connection with martial law, tentatively cover three groups measures These are 1) measures aimed at creating favorable conditions for agribusiness for the purpose of uninterrupted production and supply agricultural goods under martial law; 2) targeted measures to create the most safe conditions during the implementation of phytosanitary measures measures and procedures under martial law; 3) measures aimed at implementation of separate phytosanitary procedures in relation to regulated objects, exported under the Safe Transportation Initiative grain and foodstuffs from Ukrainian ports. At the same time, there is a special legal regime in the field of phytosanitary measures calculated for the period of martial law and within 90 days (in separate cases - 6 months, one year) from the date of its termination or cancellation, and c the post-war period should be harmonized with the requirements of the WTO and legislation EU.

Regulating TRQ Schemes Under WTO Law: Time to Throw Away Old Bananas?

Regulating TRQ Schemes Under WTO Law: Time to Throw Away Old Bananas?

Legal bases of the state agrarian policy of Ukraine regarding sanitary and phytosanitary measures under martial law

The article is devoted to the study of the legal foundations of the state of the agrarian policy of Ukraine regarding sanitaryand phytosanitary measures in the conditions martial law in Ukraine. On the one hand, Ukraine’s membership in the WTO makes it possible agrarian business to gradually integrate into the world market economy, and with the other - puts forwardthe obligation to the state to implement it in the national one legislation, tools for protecting the interests of the national agrarian producer both in domestic and foreign agricultural markets. To such tools include sanitary and phytosanitary measures.Agreement on sanitary and phytosanitary measures WTO determines that their main purpose application is improvement of human health, animal health and phytosanitary situation in the territory of all members. State agricultural policy in the field of sanitary and phytosanitary measures is based on the principles of WTO law, which include the principle of sovereignty (principle of independence) and a system of anti-protectionist principles. At the same time, in modern conditions, the peculiarities ofthe use of sanitary and of phytosanitary measures regarding objects of regulation during martial law is based on the principles of extraterritoriality, deregulation and priority security of business entities and specialists of the State Production and Consumer Service.
 The main changes regarding sanitary and phytosanitary measures, which introduced in connection with martial law, tentatively cover three groups measures These are 1) measures aimed at creating favorable conditions for agribusiness for the purpose of uninterrupted production and supply agricultural goods under martial law; 2) targeted measures to create the most safe conditions during the implementation of phytosanitary measures measures and procedures under martial law; 3)measures aimed at implementation of separate phytosanitary procedures in relation to regulated objects, exported under the Safe Transportation Initiative grain and foodstuffs from Ukrainian ports.At the same time, there is a special legal regime in the field of phytosanitary measures calculated for the period of martial law and within 90 days (in separate cases - 6 months, one year) from the date of its termination or cancellation, and c the post-warperiod should be harmonized with the requirements of the WTO and legislation EU.

Ukraine-Russia crisis and the WTO law: Rise of security exceptions?

Ticarive ticaret–dışı çıkarlar ayrımı;uluslararası ilişkilerinköklü tartışmalarından olan siyasal ve siyasal olmayan konular arasındaki önceliğe dair tartışmanınbir yansıması olup, siyaset ve ekonomi arasındaki açığı temsil etmektedir. Bu bağlamda, güvenlik,ticaret–dışı değerlerin en önemlisidir denilebilir. GATT,ticari konuları disipline ederken âkid tarafların ticaret–dışı çıkarlarını da dikkate almıştır. Bu kapsamda, GATT kurallarına aykırı tedbirleri almaya imkân veren çeşitli istisna düzenlemelerine yer verilmiştir. Bunlar arasında ulusal güvenlik istisnaları da yer almaktadır. Güvenlik istisnaları gerek GATT gereksede DTÖ döneminde uzunca bir süre devletlerin başvurmakta ihtiyatla yaklaştıkları bir araçolmuştur. Ancak son yıllarda, uluslararası ilişkilerde artan gerginlik ortamına bağlı olarak,devletleringüvenlik istisnalarınıticaret kısıtlayıcı ulusal önlemlerin meşruiyet dayanağı olarak daha sık öne sürmeye başladıkları gözlenmektedir. Güvenlik istisnaları yakın zamanda iki DTÖ panelinde uygulama alanı bulmuştur. Bunu yenilerinin takip etmesi muhtemeldir. Özellikle, Ukrayna’da 2014 yılında başlayan siyasal gelişmeler ile ABD’de Trump Yönetiminin başta Çin olmak üzere çeşitli ülkelere karşı temelde siyasal gerekçelerle uygulamaya koyduğu ticaret kısıtlayıcı önlemler güvenlik istisnalarını ön plana taşımıştır.Çalışma, DTÖ hukukundaki güvenlik istisnalarının uygulanma koşullarınıve Ukrayna-Rusya Kirizi bağlamında gündeme gelme potansiyelini incelemekte; yöntemolarak, ağırlıkla,yasal metin analizi ve içtihad kararlarına başvurmayı benimsemektedir.

Dealing with the Challenge of Climate Change within the Legal Framework of the WTO

Although international trade and climate change regimes are two different fields of international law, they are closely interrelated. In particular, certain domestic environmental policies adopted by States may run afoul of WTO law, thereby having adverse effects on free trade. It has been claimed by critics that non-discrimination principles and subsidies regulations of WTO law constrain its Members’ ability to take certain unilateral actions aimed at climate change mitigation. According to other commentators, despite the existence of potential conflicts between UNFCCC and WTO regime, there are still synergies which can be developed to bring a greater coherence, and WTO’s multilateral framework can serve as a vehicle to facilitate targets of the Paris Agreement. This paper argues that although sustainable development is recognized by WTO regime and it leaves some scope for climate change actions, its current legal framework does not provide sufficient space for member’s regulatory autonomy in order to take national regulatory policiesAlthough international trade and climate change regimes are two different fields of international law, they are closely interrelated. In particular, certain domestic environmental policies adopted by States may run afoul of WTO law, thereby having adverse effects on free trade. It has been claimed by critics that non-discrimination principles and subsidies regulations of WTO law constrain its Members’ ability to take certain unilateral actions aimed at climate change mitigation. According to other commentators, despite the existence of potential conflicts between UNFCCC and WTO regime, there are still synergies which can be developed to bring a greater coherence, and WTO’s multilateral framework can serve as a vehicle to facilitate targets of the Paris Agreement. This paper argues that although sustainable development is recognized by WTO regime and it leaves some scope for climate change actions, its current legal framework does not provide sufficient space for member’s regulatory autonomy in order to take national regulatory policies

Pancasila Revitalization for the Enforcement of Non-Discriminatory Principle of Global Business Competition to Small Entrepreneurs

Pancasila, in the 5th precept, is social justice for all Indonesians. This means that justice that is the ideal of the Indonesian nation is justice that is socially just. The revitalization of Pancasila is the key to restoring and growing social justice in business competition in the global era for small business actors. The implementation of Pancasila revitalization of small business actors in global business competition can be done by making waivers to the Ministerial Conference to follow up on the non-discriminatory principle of business competition against small business actors to get exemptions, so that the value of social justice contained in Pancasila can be realized, especially for small business actors. The existence of the non-discriminatory principle on the implementation of Pancasila revitalization of global business competition to small entrepreneurs is still recognized for its existence, considering that there is no follow-up to the disharmony of regulations in the WTO and business competition law in Indonesia, especially regarding the application of non-discriminatory principles to business competition specifically for small business actors. The method used in this study is normative juridical with a problem approach that has the purpose and purpose of reviewing applicable laws and regulations as well as literature with a theoretical concept, then connected with the problems that are the subject of discussion discussed in this research writing.
 Keywords: Pancasila, non-discriminatory principles, global business competition, small/medium enterprises

Promoting Multilateral Resolution for Trade Disputes

ABSTRACT Developing countries tend to use multilateral dispute settlement procedures less frequently than developed countries because the former lack the requisite economic and legal capacities. However, recent studies on the WTO have found increased use of the dispute settlement mechanism by developing countries. This article argues for the importance of legal capacity in determining the use of the multilateral process, especially within the WTO. Our empirical analysis indicates that (1) prior member country experiences and (2) the availability of legal assistance from the Advisory Centre on WTO Law increase the likelihood of developing countries using the full multilateral legal procedure.

Regulating the future hydrogen trade in the EU: WTO law considerations

The concept for the extensive use of hydrogen as an energy carrier is not new but has regained traction recently. To drive the development of the hydrogen economy, national regulatory frameworks for the hydrogen economy are emerging in many parts of the world, including the European Union. The focus of this contribution is on the interaction of the emerging EU hydrogen policies and regulations with the rules of the WTO. The key finding is that conflicts between the norms of the EU and the WTO can be avoided, but policymakers need to act for this to be accomplished.

SECURING COMPATIBILITY OF CARBON BORDER ADJUSTMENTS WITH THE MULTILATERAL CLIMATE AND TRADE REGIMES

AbstractThe European Union (EU) is contemplating the adoption of a carbon border adjustment mechanism (CBAM), which would extend its domestic carbon price to emissions that are produced outside its borders but are embodied into its imports of carbon-intensive commodities. In doing so, the EU is testing the boundaries of permissible unilateral action at the interface of international climate and trade law. However, the question of whether the proposed CBAM is compatible with these two multilateral legal regimes is yet to be addressed in an integrated manner. This article seeks to fill this gap in the scholarship and makes two main arguments. First, the CBAM as presently designed does not respect the principle of Common but Differentiated Responsibilities and Respective Capabilities (CBDRRC) and needs to be adjusted through two forms of differential treatment: a full exemption for least-developed countries and Small Island Developing States and the use of CBAM-generated revenue to support decarbonisation efforts in other affected developing countries. Secondly, this CBDRRC-based differentiation should be permissible under WTO law on the grounds that it does not amount to discrimination between countries where the same conditions prevail.

The Power of the Weak in the WTO How David Overcome Goliath

It is undoubtedly accurate that there is a lack of parity in the WTO dispute system. Although the system has been lauded as being a rule-based adjudication system, developing country members and least-developed countries (LDCs) have to go to great lengths to protect their interests against a formidable trade partner. Remarkably, a few of them have successfully turned the tables with clever approaches in trade disputes against more resourceful and powerful members of the WTO. This paper adopts an exploratory qualitative research method using an in-depth analysis of six case studies of trade disputes between economies classified as “weak” against economies classified as “strong” members of the WTO. A total of 391 cases that were filed between 1995 and 2021 were first examined. Subsequently, out of 100 cases where developing countries participated in the WTO litigation as complainants, a total of 10 cases in which “the weak” member prevailed. Six cases were chosen because they explicitly illustrate how the “weak” WTO members harness their resources and unique winning tactics to overcome the “strong” WTO members’ ample supply of resources and aggressive tactics. The paper shows that governance effectiveness, influential alliances, public-private partnerships, government-NGO collaboration, engagement of academics and experts, effective use of the Advisory Centre on WTO Law (ACWL) coupled with effective leadership and clear plans were crucial for weak members' successful legal challenge at the WTO. These findings present promising tactics that WTO members could use to prevail in their trade disputes against a “stronger” WTO member. They should, at best, inspire “weak” members to overcome their hesitance to use the WTO judicial process to protect their interests either as parties or marginally as third parties. Indeed, the developing country members and LDCs have a variety of tools they can put to work when filing a dispute to help maximize the benefits and lower litigation costs. Chief among them is the AWCL. Our case analysis shows that ACWL's low cost has relatively attenuated “weak” members' legal and financial stakes associated with a trade dispute.

How Cultural Cognition Informs Differential Treatment in WTO law and the Climate Regime

How Cultural Cognition Informs Differential Treatment in WTO law and the Climate Regime

Sovereign Investors and National Security Exceptions in WTO and Investment Law

Sovereign Investors and National Security Exceptions in WTO and Investment Law

Export Rebates and the EU Carbon Border Adjustment Mechanism: WTO Law and Environmental Objections

The EU proposal for a carbon border adjustment mechanism (‘CBAM’) has triggered a lively academic and policy debate. In June 2022, the European Parliament put forward amendments regarding the potential introduction of export rebates under the EU Emission Trading System (‘ETS’) and the CBAM. This article focuses on this specific proposal, enquiring into the WTO law compatibility of ETS/CBAM export rebates. First, it enquires whether the ‘pecuniary burden’ associated with compliance with the CBAM would qualify as a ‘charge’ that is ‘equivalent to an internal tax’ and that is ‘imposed consistently with Article III:2 GATT’. Second, it suggests that the ‘pecuniary burden’ associated with compliance with the ETS/ CBAM is unlikely to qualify as an adjustable product tax; the analysis draws on a close examination of relevant provisions in the General Agreement on Tariffs and Trade (GATT) 1994 and the Agreement on Subsidies and Countervailing Measures (‘SCMA’). Finally, the article develops some brief considerations on the detrimental environmental effects of export rebates. As the article concludes, the regulatory design of the CBAM is not perfect; export rebates, however, would make this scheme considerably worse. Carbon Border Adjustment Mechanism, Carbon Border Measures, Export Rebates, Border Tax Adjustment, Tax, Charge, GATT 1994, Agreement on Subsidies and Countervailing Measures, Emission Trading System

China and the WTO, Redux: Making Sense of Two Decades of Membership

2021 marked the twentieth anniversary of China entering the WTO. Those first two decades have been far from smooth with multiple trade tensions arising between China and other members, both within the WTO and beyond. This article uses the twenty-year milestone as an opportunity to assess China’s role within the global trade system and the impact it has had on broader trade relations. We argue that while there are areas of China’s trade-related practices that are worrying and present severe challenges to the system, claims that it is consistently behaving outside of the WTO’s established rules and norms are exaggerated. While China is certainly using all the latitude available within the rules and is at times transgressing WTO law, its behaviour remains similar to that of other great powers within the system and is consistent with what is expected within any inherently competitive system wherein conflict and contestation are normal features of engagement. WTO, China, trade

A Fairer Governance of High Sea Fishing through a Systemic Interpretation Approach

The regulation of high sea fishing would not be successful without cooperation among the states in the current international society, without a world government. However, the ongoing quest for cooperation in the field of fishery governance focuses too much on the unilateral responsibility of a state to cooperate with a RFMO, overlooking the responsibility of state parties of an RFMO or the state seeking to regulate IUU fishing. This essay reveals that the equitable consideration of fishery governance is sometimes prejudiced in the name of conservation. Fishery governance involves food security, employment, free trade, and the environment. An ideal regime of high sea fishing is expected to balance the conflicting values and bring an end to the fragmentation of international law. The systemic interpretation approach, which is based on Article 31, paragraph 3(c) of the Vienna Convention on the Law of Treaties, contributes to a fairer governance of high sea fishing. Such an approach revives the obligation of the state to cooperate in the fishery sector by referring to external legal sources, including human rights laws, WTO laws, and environmental laws.

Bringing Trade and Environmental Norms Together: The Case of the WTO Fisheries Subsidies Negotiations

Abstract Protecting the environment is not a new topic in international trade law. The growing environmental impacts of globalization have made protecting the environment an increasingly pressing issue. In fisheries subsidies negotiations since 2001, WTO members have attempted to introduce environmental norms into the existing trade law framework. After examining the draft text and the Fisheries Subsidies Agreement, this article finds it difficult and inappropriate to assess and regulate purely environmental issues through the lens of trade agreements, particularly the SCM Agreement. The draft text and the Agreement reveal conflicts with the basic concepts, principles, and framework of WTO law and do not ensure effective conservation of fisheries stocks. Based on these findings, this article argues that, as much as the conservation of fish stocks is imperative, it should be done in a manner consistent with the basic framework of international law and international trade law.

Playing the Game: The EU’s Proposed Regulation on Foreign Subsidies

The objective of ‘level playing field’ has become increasingly more present in international trade affairs. The European Union (EU) has recently embarked on a quest to promote and protect the level playing field within and outside the borders of the internal market. The most recent manifestation of this objective is the regulation of foreign subsidies, i.e., subsidies provided by non-EU countries to undertakings operating within the EU. The European Commission issued its proposal for a new Regulation with the goal of tackling distortions to the level playing field caused by foreign subsidies. The present article introduces the major concepts of the Proposal and provides a comparative analysis with EU State Aid law and the WTO Subsidies and Countervailing Measures (SCM) Agreement. Further, it pursues an economic analysis of the anticipated impact of the Proposal with a view of examining whether the Proposal is capable of addressing global distortions caused by foreign subsidies and ensure a level playing field. Lastly, the article examines the compatibility of the Proposal with Article 32.1 of the SCM Agreement. Trade Remedies, WTO Law, Subsidies, Treaty Interpretation, EU Law, International Trade Law