WTO Rules Research Articles

Сельскохозяйственное страхование с государственной поддержкой и правила ВТО: проблемы соответствия

Сельскохозяйственное страхование с государственной поддержкой и правила ВТО: проблемы соответствия

State-aid programs of BRICS countries: Сase of transport equipment trade

State aid or subsidy programmes are a common practice of developed and developing countries to support national companies. Despite the fact that they are strictly regulated by the WTO rules, BRICS countries actively apply this measure, even though they announce the path to liberalization and trade cooperation. The aim of the paper is to reveal the distinguishing features of such programs in the BRICS in the field of trade in transport equipment. The methodology is based on a cross-country comparative analysis and case studies. The authors firstly explain the controversy in theoretical approaches to state aid policy analysis. Secondly they identify the peculiarities of non-tariff measures applied by BRICS and the role of state aid. And, finally, the paper presents the specific case studies in transport equipment trade. The authors conclude that the effectiveness of subsidies in the transport sector is not so obvious, as the dynamics in imports and exports of relevant products depends on various external factors. Nevertheless, the application of state aid in the industry leads to more favourable environment for national producers. State aid programmes, in most cases, do not comply with the WTO regulations, that implies trade distortion and could provoke trade disputes. The BRICS countries should strengthen the monitoring of these programs and focus on the opportunity of applying horizontal rather than vertical subsidies.

The Cost of Non-Europe, Revisited

In this paper we quantify the Cost of Non-Europe, i.e. the trade-related welfare gains each country member has reaped from the European Union. Thirty years after the terminology of Non-Europe was used to give estimates of the gains from further integration, we use modern versions of the gravity model to estimate the trade creation implied by the EU, and apply those to counterfactual exercises where for instance the EU returns to a normal, shallow-type regional agreement, or reverts to WTO rules. Those scenarios are envisioned with or without the exit of the United Kingdom from the EU (Brexit) happening, which points to interesting cross-country differences and potential cascade effects in doing and undoing of trade agreements.

Over the cliff edge and on to the rocks below

▀ If Brexit negotiations were to break down, the UK would face a significant increase in trade disruption from March 2019, even if it were able to put some basic trading arrangements in place. In a scenario where key sectors face extra friction, we find that the level of UK GDP would be 2.0% – or £16bn in cash terms – lower at the end of 2020 compared with our baseline. The impact on the remaining EU countries, including Ireland, would be much smaller. ▀ This article focuses on what a cliff‐edge Brexit means for trade costs and prices. This is only part of the equation – such a scenario would also influence supply chains and migration, while there is also potential for policymakers to mitigate some of the negative effects via looser policy. ▀ The notion that the UK could simply walk away from Brexit negotiations and rely on WTO rules to trade with the world is deeply flawed. The UK would need to re‐establish more than 750 very complex international arrangements just to maintain the status quo. We expect only the most critical issues – such as air travel – to be resolved by March 2019. Exporters also face a substantial increase in non‐tariff barriers. ▀ A breakdown in talks would also see both sides levying tariffs on imports from each other from March 2019, raising the cost of importing UK goods into the EU by 3.5% and by 3.1% for goods imported into the UK from the EU. For the UK, this will apply to roughly 60% of its goods exports and imports, but for all EU countries except Ireland the share would be less than 10%. ▀ The additional trade frictions would knock around 1pp a year off UK GDP growth in 2019 and 2020, resulting in a period of very weak growth. And the risks to this scenario are skewed to the downside – a slump in confidence or failure to establish the necessary customs infrastructure in time could easily generate a worse outcome

Правила СОТ щодо сприяння торгівлі: базові елементи концепції

The present article provides the review of the main elements of the concept of trade facilitation, implemented in the WTO Agreement on Trade Facilitation. The proper interpretation and understanding of principles and ideas, utilized in the process of drafting of this Agreement is very important for its effective implementation. That principles gain additional meaning for such countries as Ukraine, so far the trade facilitation comprises the integral part of general course of reforms to crate more friendly environment for doing business, that have been started in the recent years. The connections between the idea of trade facilitation and the concept of global governance and the main tendencies of establishing global standards of public administration are determined. The emerging of hybrid and private regulating bodies with respect to the trade facilitation standards are highlighted. A multilevel system for the implementation of this Agreement at the global, regional and bilateral levels is characterized. With this respect the Agreement on Trade Facilitation leaves a wide discretion for national governments to chose the particular ways and means to implement its provisions. The classification of border and customs procedures and formalities that are the objects of measures for trade facilitation is presented. That classification include such regulating spheres as: revenue, security, environment and health, customer protection, trade policy. Besides the specific field of trade facilitation is simplification of data submission and exchange between private entities and state authorities. The main indicators of the implementation of trade facilitation measures, in particular, direct and indirect trading transaction costs, are analyzed. The levels of such costs and possible benefits from the implementation of the WTO rules on trade facilitation are determined.

Quantifying the Termination of NAFTA

This paper quantifies the trade and economic impacts of the US terminating its NAFTA commitments under three alternative scenarios: NAFTA lapses with all three trading relationships reverting to WTO rules; NAFTA lapses but Canada and the United States retain bilateral free trade under the Canada-US FTA (CUSFTA); and Canada and Mexico trade remains under their bilateral NAFTA commitments. The impacts are evaluated using a computable general equilibrium model and takes into account the implications of imposing new tariff walls and removing the services and investment commitments under the NAFTA.

State Control and the Effects of Foreign Relations on Bilateral Trade

Do states use trade to reward and punish partners? WTO rules and the pressures of globalization restrict states’ capacity to manipulate trade policies, but we argue that governments can link political goals with economic outcomes using less direct avenues of influence over firm behavior. Where governments intervene in markets, politicization of trade is likely to occur. In this paper, we examine one important form of government control: state ownership of firms. Taking China and India as examples, we use bilateral trade data by firm ownership type, as well as measures of bilateral political relations based on diplomatic events and UN voting to estimate the effect of political relations on import and export flows. Our results support the hypothesis that imports controlled by state-owned enterprises (SOEs) exhibit stronger responsiveness to political relations than imports controlled by private enterprises. A more nuanced picture emerges for exports; while India’s exports through SOEs are more responsive to political tensions than its flows through private entities, the opposite is true for China. This research holds broader implications for how we should think about the relationship between political and economic relations going forward, especially as a number of countries with partially state-controlled economies gain strength in the global economy.

China's Litigation on Non-Market Economy Treatment at the WTO: A Preliminary Assessment

As promised, China brought a WTO dispute against the US and the EU respectively regarding their antidumping laws, which continue to authorise the application of the so-called non-market economy (NME) methodology. This case was initiated one day after the expiry of paragraph 15(a)(ii) of China’s WTO Accession Protocol on 11 December 2016. Through a preliminary analysis of China’s claims in the request for consultation with the EU, this paper argues that the expiration of paragraph 15(a)(ii) has terminated the right of WTO Members to use surrogate prices or costs for price comparison in antidumping actions against China solely based on their national market economy criteria. The use of surrogate prices or costs must now comply with the relevant WTO rules applicable to all WTO Members. On this basis, the challenged EU measure is likely to be found WTO-inconsistent. Towards this end, WTO Members may continue to label China as an NME for political or other reasons under their national laws. However, whatever this label may entail, it no longer justifies the application of the NME methodology.

Let’s get Ready for ‘No Deal’

A ‘no deal’ scenario, in which the UK simply leaves the Single Market and Customs Union in 2019, does not have to be the ‘catastrophe’ that many fear. There would be some new barriers to trade with the EU, but these should be manageable. On the upside, the UK would be able to crack on with its own trade deals with the rest of the world, cut tariffs on imports unilaterally, review EU regulations, and save straightaway on contributions to the EU budget. The biggest risks may be in areas such as financial services and aviation, which are not covered by WTO rules. But the UK and the EU could simply agree to continue the current arrangements here separately from the Article 50 process. It may well be better to have a short transition to smooth all this out, followed swiftly by a comprehensive free trade deal. Nonetheless, a clean break in 2019 could still be the next best outcome.

Revolutionary Cuba and the GATT/WTO System

Cuba was a charter signatory of the GATT, transitioning to WTO membership in 1995. After its 1959 revolution, it sought to achieve economic independence from the US, and traded mainly outside GATT rules, in barter arrangements with the Soviet Union and later with Venezuela. This article investigates why Cuba chose to remain in the GATT and WTO as a centrally planned economy. GATT and WTO documents reveal that Cuba sought to gain influence among developing countries as a critic of existing trade rules and negotiations, while attempting to retain or seek new rules-based multilateral channels of market access. Yet Cuba has not been able to avoid dependence on major trading partners and a limited range of exports, as the collapse of the Soviet system, and the political deterioration in Venezuela led to major declines in Cuban exports and economic crisis. However, Cuba has begun to diversify its exports and expand its trade partnerships, and its trade interests now align more closely with WTO rules and negotiating agendas. Cuba will, however, need to implement domestic reforms and increased openness to global markets in order to realize the economic benefits of WTO membership.

China’s Litigation on Non-Market Economy Treatment at the WTO: A Preliminary Assessment

As promised, China brought a WTO dispute against the US and the EU respectively regarding their antidumping laws, which continue to authorise the application of the so-called non-market economy (NME) methodology. This case was initiated one day after the expiry of paragraph 15(a)(ii) of China’s WTO Accession Protocol on 11 December 2016. Through a preliminary analysis of China’s claims in the request for consultation with the EU, this paper argues that the expiration of paragraph 15(a)(ii) has terminated the right of WTO Members to use surrogate prices or costs for price comparison in antidumping actions against China solely based on their national market economy criteria. The use of surrogate prices or costs must now comply with the relevant WTO rules applicable to all WTO Members. On this basis, the challenged EU measure is likely to be found WTO-inconsistent. Towards this end, WTO Members may continue to label China as an NME for political or other reasons under their national laws. However, whatever this label may entail, it no longer justifies the application of the NME methodology.

The Impact of Off-Farm Income on Food Expenditure

South Korean agriculture has been based on small, labor intensive and owner-operated farms, and the agricultural market is considered to be vulnerable to the opening of global trade led by large-scale producers under new WTO rules. Smallholder farm households, which are very common in South Korea, usually maintain a portfolio of income sources, with off-farm income being a major component. Off-farm income affects the availability of cash to make on-farm investments (land, fertilizers and pesticide, and farm equipment), family living expenses―food security, and adoption of appropriate technologies. Using farm household level data from three surveys, this study assesses the impact of off-farm income on food consumption expenditures by South Korean farm households. Results suggest that by receiving off-farm income―or engaging in off-farm work―their food consumption expenditures increase by 0.07%. Furthermore, public subsidies received by farm households are used to increase food consumption. Findings here also suggest that both farm and off-farm incomes can contribute to better food security.

Trade Measures for Regulating Transboundary Movement of Electronic Waste

International trade in used electrical and electronics equipment (UEEE) provides an avenue for socio-economic development in the developing world and also serves as a conduit for transboundary dumping of waste electrical and electronic equipment (WEEE) also referred to as electronic waste or e-waste. The latter problem arises from the absence of a regulatory framework for differentiating between functional UEEE and junk e-waste. This has resulted in both functional UEEE and junk e-waste being concurrently shipped to developing countries under the guise of international trade in used electronics. Dealing with these problems will require effective regulation of international trade in UEEE from both exporting and importing countries. Although, the export of e-waste from the European Community to developing countries is currently prohibited, significant amount of e-waste from the region continue to flow into developing countries due to lax regulatory measures in the latter. Hence, there is need for a regulatory regime in developing countries to complement the prohibitory regime in the major e-waste source countries. This paper proposes trade measures modelled in line with WTO rules which could be adopted by developing countries in addressing these problems. The proposed measures include the development of a compulsory certification and labelling system for functional UEEE as well as trade ban on commercial importation of UEEE not complying with the said certification and labelling system. The paper then goes further to examine these proposed measures in the light of WTO rules and jurisprudence.

Post Brexit Uk- EU Trade Under WTO

This paper aims to point out the scope of some of the key challenges and the complexities that the UK will face with regard its trade with EU under the WTO rules, till a future relationship agreement or FTA is reached. The paper starts with setting the scene by exploring the brief history of UK joining the EU and then provide a clear picture of the trade relationship between EU and UK since then. Then it will discuss the trade deals that the UK could refer to. It then moves on to provides a detailed legal analysis of UK’s membership in the WTO, and will establish that UK already possess all the rights and obligations under specific agreements such as GATT, GATS and GPA. It will further establish that UK already has its Schedules under the EU’s Schedules and post Brexit, UK will need to extract the same from the EU’s Schedule and continue its trade even if the same is not certified by WTO members, unless there is a dispute settlement establishing differently. After establishing how UK can trade under the WTO rules after Brexit, the paper will move on to discover the procedural and practical difficulties that UK might face while trading with the EU under the WTO rules. It will discuss the issues of getting consensus in the WTO trading system, the trade impacts and the problems of sharing or determine its subsidies, TRQs, and accession in various WTO agreements. Overall, this paper aims to understand the UK-EU trade under the WTO regime in order to enable UK government to minimise trade disruption and also negotiate a better trade agreement.

Russian Gas Dual Pricing Consistency with WTO Law: A Question That Might Have Been Answered

Russia sells its gas domestically at a price lower than the one used for the exported gas, creating the so-called situation of “dual pricing”. This difference leads to lower prices for final products that use gas as an input, which consequently pose competition problems for products originating in other Members. The purpose of the present thesis is to answer whether the practice of gas dual pricing in Russia’s case is WTO consistent. Based on the historical background, the thesis concludes that the status of dual pricing is not expressly enshrined in WTO law and it is unlikely that it will be soon. Moreover, by analysing Russia’s accession commitments and its national legislation it reaches the conclusion that gas dual pricing will not end in the near future. Since dual pricing is not expressly prohibited in WTO law, the thesis further analyses the consistency of Russian gas dual pricing with the WTO subsidies rules. It concludes that the specificity requirement that a subsidy has to comply with is not present. Moreover, where for the specificity requirement to be overcome there are other requirements that can pose hurdles for a subsidy to be found. Short after its accession Russia commenced three cases against anti-dumping measures imposed by the EU and Ukraine on the Russian products that used cheaper gas. By using the recent reasoning of the AB in EU – Biodiesel, a case that can provide with answers to dual pricing consistency with anti-dumping law, the thesis anticipates that anti-dumping measures imposed by the EU and Ukraine will be found in violation of anti-dumping rules. Even though Russian gas dual pricing is found consistent with subsidies and anti-dumping rules, the thesis concludes that the question of its compatibility with WTO law should not be considered fully closed, because of the discontent of other Members that can be manifested in legislative proposals for changes in WTO rules, and also because of the possibility of other existing provisions to be invoked by the affected Members.

Comment le TTIP s’articulerait-il avec le droit de l’OMC ?

Cet article examine la manière dont le TTIP, s’il entrait en vigueur, interagirait avec les règles de l’OMC. Une première section se focalise sur les relations entre les États-Unis et l’Union européenne. Elle examine en particulier les clauses du TTIP qui régissent ses relations avec certaines des règles de l’OMC. Cinq catégories sont proposées, selon l’objectif que ces clauses poursuivent. Cette section traite ensuite des interactions entre les mécanismes de règlement des différends, en décrivant comment le TTIP réglemente le choix de la juridiction saisie et comment il s’inspire de règles ou de problématiques débattues à l’OMC. La seconde section envisage la question du point de vue des États tiers au TTIP, et en particulier les États qui ont conclu un accord commercial avec les États-Unis et/ou l’Union européenne.

Appellate Body Report on EU-Biodiesel: Further Thoughts on The Issue of 'Particular Market Situation'

China’s unique economic system poses increasing challenges to the world trading system and attracts growing academic and policy debates. WTO members have frequently resorted to antidumping measures in dealing with price distortions caused by Chinese government influence in the economy. The Appellate Body’s decision in the recent EU – Biodiesel dispute starts to remove the flexibility of condemning state intervention and price distortions under the WTO Anti-Dumping Agreement through antidumping measures. This decision, read with the relevant WTO jurisprudence on the “ordinary course of trade” test and subsidies, suggests that price distortions resulting from state intervention should be addressed under other WTO rules. Therefore, it is necessary for WTO members to shift their focus to, and explore the capacity of, the other rules to overcome the challenges arising from China’s state capitalism.

The Southern African Development Community Trade Legal Instruments Compliance with Certain Criteria of GATT Article XXIV

Article XXIV of the General Agreement on Tariffs and Trade (GATT) lays down the legal principles with which regional trade agreements have to conform. Based on these principles, WTO members have the mandate to determine the legality of Regional Trade Agreements (RTAs) under the GATT. Article XXIV permits both regional and bilateral preferential trade agreements leading to the formation of customs unions and free trade areas, and seeks to integrate them in the multilateral trading system envisioned for the world. SADC is an RTA created under this Article. Notwithstanding the controversies surrounding the provisions and interpretation of Article XXIV, this paper seeks to establish the extent to which the SADC Protocol on Trade and free trade area comply with WTO rules. An analysis of selected Article XXIV provisions and the SADC Trade Protocol provisions will be undertaken in trying to establish this compliance.

Research on the Realistic Obstacles and Countermeasures of the Intellectual Property Barrier in China

Under the trend of economic integration and WTO rules, the new trade barriers are gradually replacing the traditional form, which has become an important means to adjust the trade interests of governments and multinational corporations. As one kind of emerging trade, intellectual property is produced by international law and domestic law. It has the legitimacy, and it has the characteristics of invisible, time and region. The in this paper based on the basic characteristics of the intellectual property barriers, from the domestic intellectual property legislation, their consciousness of intellectual property protection, intellectual property core competitiveness, processing trade benefit distribution, multinational corporation intellectual property rights, intellectual property rights barriers to the respondent and other aspects analysis the China dealing with intellectual property barriers existing problems, and proposes some corresponding countermeasures from macro level, middle level and micro level.

The Systems of Technical Barriers to Trade of China and Mexico under the Framework of WTO

In 2009, a financial crisis swept the globe and the world economy entered the “Severe Winter Period” causing a significant decline in spite of the international trade or the transitional capital flow. In order to deal with the crisis, all countries issued a series of policies in an attempt to stimulate the economy into its recovery while, at the same time, they implemented a variety of trade measures, among which, Technical Barriers to Trade (TBT) was one of the main ones since it was focused in the protection of domestic economy, one aspect that has become a major obstacle for the recovery of the global economy, and the proposition of submitting the international trade system, whose main contents include a multilateral trading system and the rules of WTO, to a severe test. China and Mexico are both emerging economies affected by other countries’ TBT measures, especially China, who became one of the main victims of the current round of trade protectionism. Taking base on the analysis of the current global tbt status and the regulations of the wto, the research will compare similarities and differences of tbt systems between China and Mexico, making recommendations to both nations in order for them to cope with the trade protectionism impact currently prevailing in the world.