Neither Constitution Nor Contract: Understanding the WTO by Examining the Legal Limits on Contracting Out through Regional Trade Agreements (original) (raw)
Related papers
Dispute Settlement Regimes Intermingled: Regional Trade Agreements and the WTO
Journal of International Dispute Settlement, 2010
The field of international trade law, often highlighted for its unity and the strength of its dispute settlement and remedies systems, is itself no stranger to the phenomenon of the so-called ‘proliferation’ of dispute settlement mechanisms. Regional trade agreements (RTAs) are increasingly prevalent and set up more and more solid and far-reaching dispute settlement systems, some of which are likely to come into direct contact with the multilateral system of the World Trade Organization (WTO). This article focuses on one particular type of such interaction between RTAs and the WTO: how should we address the issue of a trade countermeasure taken in the context of an RTA when such retaliatory action can be considered a breach of a WTO rule?A proper answer to this question requires an analysis of the flexibilities provided by the General Agreement on Tariffs and Trade and General Agreement on Trade in Services exception provisions allowing Members to maintain certain RTAs and of the nature of countermeasures often explicitly authorized by RTA dispute settlement mechanisms. The range of issues, relevant international law rules and potential solutions discussed are set to become only more pertinent both within the changing field of international trade law and, as international legal regimes become more robust and increasingly come into contact with one another, in contemporary international law in general.
Regional Trade Agreements Under GATT 1994: An Exception and its Limits
In this chapter, the authors examine the nature of the exception for regional trade agreements (RTAs) under Article XXIV:5 of GATT 1994. This exception, which aims to maximize the internal trade-liberalizing effects of an RTA while minimizing its external trade-restricting effects, applies specifically to measures adopted upon the formation of customs unions and free-trade areas. It can be used to justify a departure from other provisions of GATT 1994 (such as the obligation to provide most-favored-nation treatment to all WTO Members under Article I) and, in certain circumstances, the provisions of other WTO agreements. However, the exception is subject to detailed conditions. In particular, in broad terms, the restrictions that parties to an RTA impose on trade within the RTA must be eliminated, while restrictions on trade outside the RTA should not be higher than before the RTA was formed. In the case of a customs union, external trade restrictions should be substantially harmonized. In determining whether a given RTA meets these conditions, several questions arise, many of which are yet to be fully explored in dispute settlement or resolved by negotiation among the WTO Membership.
Paper - Living without the Appellate Body
The Appellate Body has asserted extensive authority over the rules governing global trade relations, proclaiming its ultimate authority to determine the prevailing interpretation of the rules of the World Trade Organization (WTO) as well as to control the extent to which extra-WTO norms can validate deviations from WTO rules. Its dominance over the trade regime is now threatened by two developments: the multiplication, sophistication and increased significance of regional trade agreements and the crisis over Appellate Body appointments. Examining these developments, this paper argues that the Appellate Body’s ‘hegemonic authority’ over the trade regime could be replaced by ‘fragmented authority’, with various adjudicators making decisions independently without possibility to refer divergences to a centralizing authority. The continued coherence of the trade regime may depend on the ability of trade adjudicators to establish ‘network authority’, providing the interpretive community that operates the trade regime with security and predictability as regards the application of norms. Three elements may be key for this: references in regional trade agreements to WTO rules and jurisprudence, the predisposition of adjudicators to pursue coherence and follow past decisions, and the existence of repeat players in trade adjudication who are themselves Members of this interpretive community.
SSRN Electronic Journal, 2000
The Brazilian Tyres case that was adjudicated by both MERCOSUR and WTO dispute settlement bodies illustrates the issues raised by multilevel judicial governance. The relationship between regional and global trading systems has become increasingly complex, raising the question whether Article XXIV GATT is still sufficient. Similarly, the way Article XX GATT is applied to balance trade and non-trade issues is increasingly disputed. Underlying these issues are more fundamental aspects of delivering justice while at the same time preserving the world trading system.
Staff Working Paper ERSD-2013-07, WTO Economic Research and Statistics Division, Geneva
Regional trade agreements (RTAs) have become an indelible feature of the international trading landscape. Most, if not all, RTAs contain provisions that establish procedures for resolving disputes among their signatory members. Yet, the design and functioning of these dispute settlement mechanisms (DSMs) and, more specifically, how they differ from the WTO dispute settlement system remain relatively unexplored. Existing academic literature has primarily focused on the narrow issue of jurisdictional conflict between DSMs of RTAs and the WTO dispute settlement system. Literature mapping out and classifying systematically the DSMs of RTAs is more limited. This research paper goes beyond considering the issue of jurisdictional conflict between the multilateral and "regional" regimes. We map out the DSMs in RTAs that have been notified to the WTO and were in force at the end of 2012, and consider a typology of these DSMs based on their nature and design. We also use the data obtained from our mapping exercise in two ways. First, we identify trends and patterns of use, either regionally or by individual countries, of the different types of DSMs in RTAs. Trends are analysed in relation to five key factors: (i) evolution over time, (ii) level of economic development, (iii) regional characteristics, (iv) level of integration (partial scope agreement, free trade agreement or customs union), and (v) configuration (bilateral or plurilateral). Second, we undertake a "nuts and bolts" analysis of the DSMs of RTAs by examining their approach to various issues in international dispute settlement. Our aim is to draw conclusions about the extent to which the predominant type of DSM in RTAs has features that are different from those of the WTO dispute settlement system.
European Journal of International Law, 2008
trade should also be conceived as a specifi c type of social interaction. The scarcity of sociological analysis in contemporary IEL literature does not diminish the infl uence of social factors that are active in the under-explored layer of the international economic arena. Sociological analysis may recast well-known dilemmas in a different manner and generate insights regarding better legal mechanisms for coping with modern challenges faced by IEL. These properties of sociological analysis are illustrated in this article, which addresses one of the most challenging dilemmas in current IEL literature: the relationship between the World Trade Organization (WTO) and regional trade agreements (RTAs). The underlying argument of this article is that the economic dimension of RTAs is overlaid with a sociological dimension. Consequently, the global/regional debate is analysed with new conceptual tools: sociological theories, mainly the structural-functional perspective, the symbolic-interactionist approach, and the social confl ict perspective. The core sociological theories lead to different conceptions of IEL and different interpretations of existing WTO legal provisions regarding RTAs. This article argues that while each of the above sociological approaches underscores certain signifi cant aspects of the global/regional debate, the symbolic-interactionist perspective should generally serve as a point of departure for law-and policy-making in this sphere. This approach suggests that the relevant WTO legal rules should be interpreted in a liberal manner.
This paper faces the question whether the relationship between the WTO and Regional Trade Agreements (RTAs) would be better qualified as a question of interrelation between different sources of international law (custom and treaty) rather than as a matter of compatibility or conflict between treaties. Initially, this idea was stimulated by the factual remark that RTAs quite systematically diverge from the requirements of GATT Article XXIV and other similar WTO provisions. In a strict international law perspective, to widen the inquiry necessarily means answering the question whether non-compliant State practice could be viewed as a tacit performance of an international custom and not simply as a generalized behaviour being wrong under WTO law. On the basis of a historical overview of the main theories developed over this topic in the past century, the present analysis elaborates the argument of a customary "regional exception" and prospects the existence, in the international trade relations, of an unwritten right or freedom to prefer, i.e. a right or freedom to conclude RTAs and, of course, to continue to take part in these preferential arrangements. It is also quite possible that, as such a custom crystallized before the advent of the GATT 1947 and Article XXIV has always been inoperative, there has been a sort of continuum in the transition from the pre-to the post-GATT period and, hence, that GATT Article XXIV did not properly fall into desuetude. On the practical side, the real dynamics of the WTO-RTAs' relationship are characterised by a somewhat anarchical situation where it is not the WTO which determines and enforces the legitimacy of the RTAs but it is the RTAs themselves which determine the degree of their adherence to the WTO law, through their concrete autonomous behaviour. This phenomenon might be explained, from an international law general perspective, as being the practical consequence (and a presumption) of the interrelation between a treaty (WTO) and a custom (the RTAs), that is between two different sources which can reciprocally derogate from each other.
With the creation of the World Trade Organization (WTO) in 1995, the pyramidal design of the international trading system placed multilateralism at the top of the pyramid, regionalism/bilateralism in the middle, and the domestic trade and economic policies of WTO Member States at the bottom of the pyramid. This article questions whether this vertical structure is still the case today, given the tremendous proliferation of regional trade agreements (RTAs) in recent years and the fact that the WTO is losing its centrality in the international trading system. The thesis of this article is that the multilateral trading system's single undertaking is no longer feasible, hence affirming RTA proliferation as the modus operandi for trade liberalization. This article also argues that RTA proliferation implies the erosion of the WTO law principle of non-discrimination, which endangers the multilateral trading system. RTAs can help countries integrate into the multilateral trading system, but are also a fundamental departure from the principle of non-discrimination. This raises the question of whether RTAs are a building block for further multilateral liberalization or a stumbling block.
With emerging new Regional Trade Agreements (RTAs) and the stagnating of the Doha Round negotiations, the conflict of overlapping laws and jurisdictions between WTO tribunals and those of RTAs has become an important issue. That conflict should be addressed multilaterally and regionally. The examination of the DSU shows that the WTO treaty negotiators did not perceive potential conflicts of jurisdictions with RTAs. Since there is no general rule of primacy between WTO norms and those of RTAs, it has been suggested that the DSU (Dispute Settlement Understanding) should be amended and that under certain conditions choice of forum and/or exclusive forum clauses of RTAs could lead a panel to suspend jurisdiction until the issue has been cleared. This article points out that conflicts of laws and jurisdictions should constantly be borne in mind while setting up RTAs. Moreover, a forum selection rule might not always be sufficient to prevent conflicts of jurisdictions. If there are norms in an RTA that address matters differently from the WTO-covered agreements, an effective remedy under the RTA is especially crucial for those rights to be enforceable. If those norms are not contrary to Article XXIV of the GATT, Article V of the GATS and * Graduate of the LL.M. Programme on International Legal Cooperation (PILC) at the Free University of Brussels (VUB); contact: timgraewert@gmail.com.