The year 2009 witnessed the rise of China as one of the major players in World Trade Organization (WTO) dispute settlement since it alone accounted for half of the fourteen new WTO disputes initiated in that year. This paper examines China’s growing involvement in major WTO dispute settlement activities and concludes that China’s participation has been a gradually evolving process. This article explains that China’s defensive and offensive positions are generally balanced and argues that China seems to approach WTO disputes on a case-by-case basis rather than by applying any preset litigation avoidance strategy. When faced with negative rulings, China has so far been quite restrained in its reactions and has generally maintained a good record of compliance, but China’s future behaviour in this regard may not always be as consistently positive. As to overall performance, this paper demonstrates that China’s record has been typical of the bigger WTO Members. Finally, it would be unfair to assess this record only with reference to the global ranking of China’s trade volumes and economic size while ignoring China’s short period of WTO membership and lack of historical experience in international dispute settlement proceedings.

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ISSN: 1011-6702
ID: TRAD2011001

With falling tariff levels, it is probably not surprising that the non-tariff area and trade facilitation, in particular, are receiving growing attention. Apart from the World Trade Organization (WTO), trade facilitation is a subject of substance within a wide range of international organizations including several United Nations (UN)-type bodies, the World Customs Organization (WCO) as well as those concerned with economic development, supply chain security, and sector-specific issues such as international transport and logistics. The resulting body of international trade facilitation instruments and initiatives, which include conventions as well as detailed technical recommendations, is extensive. This article provides a general review of key elements and topics that are associated with trade facilitation and sets them against underlying challenges and obstacles in practice as well as for research. While much of the current effort in trade facilitation begins with a top-down premise – whereby governments seek to implement international conventions and recommendations nationally – the author argues that trade facilitation is inherently an operations-focused topic and deserves to be approached from a bottom-up approach, too. Such approach not only provides a strong case for an interdisciplinary research agenda, it also brings into question whether current institutions concerned with trade facilitation have the necessary capabilities to apply themselves to the more operational aspects associated with international trade.

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ISSN: 1011-6702
ID: TRAD2011002

Linking international trade and labour standards is one of the ways to make countries comply with their international obligations to respect core labour standards. Under the European Union’s Generalized System of Preferences (EU’s GSP), trade preferences of Myanmar in 1997 and Belarus in 2006 were withdrawn for the use of forced labour and for violations of the freedom of association. This paper highlights the EU’s GSP scheme and idea of linking EU trade policy to core labour standards. Based on two case studies, we investigate the trade effects of the EU sanctions on the target country and analyse the effectiveness of the EU’s GSP sanctions. We find that using the EU’s GSP regime to sanction countries which violate the core labour standards has very limited effectiveness. However, sanctions can be an effective way to demonstrate the political commitment to a particular set of values and norms such as core labour standards. Sanctions may also deter other countries from committing violations.

If Europe must have a stronger social dimension, so should its trade policy.

– Former EU Trade Commissioner Peter Mandelson

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ISSN: 1011-6702
ID: TRAD2011003

The fragmentation of general international law is not a new phenomenon. Nevertheless, it is a sign of our era and essentially results from the legal pluralism that characterizes it. Increasing adjudication also makes the study of this concept even more fascinating. The phenomenon of fragmentation manifests itself with particular tension in international trade law. Private interests and commercial transactions can be irreversibly affected by the absence of legal security or, worse, by the existence of contradictory rulings delivered by adjudicating bodies, which constantly compete for increasing jurisdiction and thus influence. This article reviews the discussion of fragmentation of international law and critically analyses the problem of absence of coherence in regulating trade. By focusing on adjudication, permissible sources of law, and interpretation, it argues for more openness towards non-trade law when interpreting trade rules.

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ISSN: 1011-6702
ID: TRAD2011004

Transnational crime is the dark side of globalization, and States have been taking concrete steps to cope with it through the adoption of important multilateral conventions over the last decades. The World Trade Organization (WTO) cannot be a bystander in this crusade: trade and the fight against drug trafficking and money laundering should not collide. Perhaps one of the most relevant means the WTO has at its disposal to make a contribution is through the interpretation of the WTO-covered agreements. Although trade disputes related to transnational crimes are not common, a recent one, Colombia – Indicative Prices and Restrictions on Ports of Entry, had this dimension. The panel report on this case constitutes a starting point on which to draw on to ensure that WTO law aligns with general international law in the fight against transnational crime. To this end, the article suggests three main improvements to the report in Colombia – Ports of Entry. The first is to place the interpretation of General Agreement on Tariffs and Trade (GATT) Article XX(d) under these circumstances in the context of public international law. The second improvement recommendation is that of aligning the current interpretation of the two-tier test of Article XX(d) with international law in disputes of this character. The third suggestion is that of making cooperation between litigants – a widely recognized, suitable instrument in international law to address transnational offences – an attractive solution as part of the settlement of the case when the exception of GATT Article XX(d) is invoked.

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ISSN: 1011-6702
ID: TRAD2011005

Cultural products present themselves dually, as both commercial objects and assets that convey values and identity. The recently decided WTO case of China – Publications and Audiovisual Products provides an opportunity to examine the interface between the ‘specificity’ of cultural products and the ‘generality’ of trade obligations. Based on the DSB reports, this comment centres its analysis on four key issues: the UNESCO Convention as cultural defence, the application of the ‘public morals exception’ to cultural products, the distinction and overlap between cultural goods and services, and the degree to which culture can determine the ‘likeness’ between imported and domestic cultural products. This comment concludes with remarks on the case decisions, lessons China might have learned, and the necessity of reconciling free trade with cultural diversity in the context of economic globalization.

The flame knows no rest, for it lives in perpetual conflict between two opposite tendencies. On the one hand, it cleaves to its wick, drinking thirstily of the oil that fuels its existence. At the same time, it surges upward, seeking to tear free of its material tether.

– Yanki Tauber, Beyond the Letter of the Law

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ISSN: 1011-6702
ID: TRAD2011006

Members of Congress are currently threatening to enact legislation authorizing the US Department of Commerce to investigate China’s allegedly undervalued currency as a countervailable subsidy. If this happens, then China will very likely challenge the United States at the World Trade Organization’s (WTO’s) dispute settlement mechanism. This paper analyses whether a countervailing duty (CVD) applied to China’s currency regime would be consistent with the WTO’s Subsidies and Countervailing Measures (SCM) Agreement. Contrary to many commentaries, this paper concludes that, while there are several significant potential obstacles, there are in fact legitimate arguments that a WTO panel could use to uphold a US-imposed CVD on China’s undervalued currency.

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ISSN: 1011-6702
ID: TRAD2011007

World Trade Organization (WTO) dispute settlement panels have steadily taken longer to complete their work since the establishment of the WTO, but since 2005, the delays have sharply increased. The Dispute Settlement Understanding (DSU) time frames for panel proceedings are problematic in light of the time and number of parties’ submissions. However, unexpected delays in panel work have become more frequent, which, if they continue to increase at their present rate, will offset reform of DSU time frames at other stages of the procedures. This article examines the reasons why delays have occurred and considers some possible solutions.

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ISSN: 1011-6702
ID: TRAD2011008

Barriers to trade come in a variety of forms. This article examines one such barrier, export restrictions, and how it impacts trade and global supply in selected strategic metals and minerals. The metals and minerals examined in the article are of particular interest for a number of reasons: they are generally geographically concentrated in a few countries, many are used in the production of high-technology goods in strategic sectors, and there are few substitutes for these raw materials given the present state of technology. For all these reasons, importing countries are dependent on a reliable supply of these raw materials. Export restrictions may be applied for a number of reasons: protection of the environment, preservation of natural resources, protection of downstream industries, or as a response to a number of different market imperfections. This article examines the motivations for using export restrictions and finds varying impacts on trade and global supply. In one case, the export restrictions put into place did not fulfil their objective of environmental protection. In another, the presence of export restrictions in one country put pressure on other exporters to apply restrictions, suggesting the potential for competitive policy practices in restricting exports. In a third case study, export restrictions were seen to impact investment decisions by potential suppliers worldwide by introducing an added element of risk in the industry. The impact of export restrictions on strategic metals and minerals is exacerbated in many cases because producing countries have a quasi-monopoly on supply. Since these metals and minerals are essential in the production of some high-technology products and are not easily replaceable in the medium term, industry participants in some importing countries are concerned about future access at sustainable prices.

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ISSN: 1011-6702
ID: TRAD2011009

As countries around the globe introduce new strategies to address the effects of climate change on the agriculture sector, greater international coordination and discipline of these policies are increasingly important. Policies to boost renewable energy from agriculture feedstocks, for example, are widespread in the United States and the European Union (EU), despite the uncertainties concerning their impacts on commodity demand, trade flows, water use, and mitigation of greenhouse gas emissions.

This article argues that there is a relationship between market-distorting farm policies and the respective level of environmental impact. This is particularly true in the case of policies that are not decoupled from production. Because the problems involving agriculture production and trade are global and systemic in nature, WTO rules play an important role in securing that new forms of agriculture protectionism, justified by legitimate policy objectives, such as climate change mitigation and adaptation, do not jeopardize agriculture trade liberalization.

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ISSN: 1011-6702
ID: TRAD2011010

The China Auto Parts case is a historic one set in the broad context of the political economy and hard-line development policies of China. Through this case, trade policy makers in Beijing learned the lesson of the golden rule of international trade law, which is helping the Chinese Communist Party overcome domestic interest group pressure and get on with the job of reform. China could also learn that World Trade Organization (WTO) dispute settlement provides a good channel through which trade disputes among superpower countries could be solved with efficacy and alacrity. A shift toward consistent non-discriminatory behaviour will help one of the fastest-growing developing countries emerge into a responsible stakeholder on the world economic stage.

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ISSN: 1011-6702
ID: TRAD2011011

Given the recurring debate over whether China's monetary policies constitute currency manipulation actionable under the World Trade Organization (WTO) or International Monetary Funds (IMF) Agreements, a legal analysis of these possibilities is prudent. As shown in this article, China's policies do not run afoul of the Agreement on Subsidies and Countervailing measures, as they do not constitute a financial contribution under Article 1.1(a)(1) nor are they 'specific' within the meaning of Article 5. These policies are also not prohibited by General Agreement on Tariffs and Trade (GATT) Article XV, primarily because they are not covered by a proper interpretation of the scope of this Article. Finally, Article IV of the IMF Agreement is not violated because the necessary wrongful intent is not present and/or cannot be demonstrated. There is therefore no legal basis for action against China under these Agreements.

Over the past year renewed calls for China to re-value its currency against the threat of legal action have been made in legal and economic periodicals, international conferences, and, perhaps most effectively, the US Congress. Considering the dismal state of the American and indeed the world economy, such a demand is not surprising. As one of the world's largest markets, China's economic and political policies have a major impact on the global economy. If in fact the yuan - the basic denomination of the Renminbi (RMB) - is undervalued, it is generally agreed that Chinese exports would be favoured while international imports would be penalized. Thus, a strong argument exists for China to remedy this imbalance by re-valuing their currency.

Despite this, commentators overshoot the mark when they demand legal action under the Agreement on Subsidies and Countervailing Measures, GATT Article XV, or the IMF Articles of Agreement. The fact of the matter is that while a case may be made for the finding of a violation of one or more of these regimes, it is ultimately unlikely to succeed. The main reasons for this are that the relevant articles are not intended to cover a situation where a country artificially keeps the value of its currency low, and that even if they can be read to, the facts do not support the finding of a violation in this case. Moreover, assuming that a violation could be found, serious difficulties arise with regard to implementing remedies.

While there is an abundance of commentary on this issue, most authors focus on economic or political discussions and they are not necessarily incorrect for doing so. This paper, however, intends to fill the gap through an in depth analysis of whether China's policy is actionable under the Agreement on Subsidies and Countervailing Measures, the GATT, and/or the IMF Articles of Agreement. It will further be considered whether and what kind of remedies would be available in the event that a violation of one or more of these agreements is found. In the end, though, it will be seen that in this case it is better to simply let the dragon lie.

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ISSN: 1011-6702
ID: TRAD2011012

Our aim is to test the idea that the World Trade Organization's (WTO's) ability to regulate regional trade agreements (RTAs) is likely to decline with the proliferation of RTAs worldwide. According to this idea, (1) 'people who live in glass houses should not throw stones'; (2) with the proliferation of RTAs, WTO members are likely to place their interests before the interests of the multilateral system; and (3) there would be fewer WTO members demanding stricter disciplines for RTA regulation. However, our finding is that WTO members have at least continued to accord attention to the problems associated with RTA proliferation, and they continue to engage in active scrutiny of individual RTAs. We are not saying that WTO members do not act in their own interest or that they are motivated by altruism but simply that such self-interest has not prevented scrutiny of RTAs under the new transparency mechanism (TM). The proliferation of RTAs (and any felt need to protect one's 'own RTA programme') has not prevented discussion on improved disciplines. Notwithstanding the intent underlying the establishment of the TM - that is, the prevention of another impasse caused by controversy over various 'systemic issues' connected with questions of RTA compliance - WTO members continue to discuss these issues in ways that demonstrate fidelity to important questions of principle and policy. One notable development, however, has been that East Asian members are no longer seen to be as prominent in expressing a strict approach towards RTA regulation as they were a decade ago.

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ISSN: 1011-6702
ID: TRAD2011013

The dividing character of the Information Technology Agreement (ITA), separating information technology (IT) products in the list from those yet to be included, by its nature, might make the ITA stumble on the converging technology trend. The European Communities and Its Members States - Tariff Treatment of Certain Information Technology Products (hereinafter 'EC-IT Product') case has opened up Pandora's box: would original ITA products, after technological change, still be included in the ITA? In light of the terms of relevant concessions being interpreted, the Panel establishes that the ITA could be dynamic along with new technology in that the addition of new technology or features would not necessarily warrant the exclusion of the ITA products from the duty-free coverage. However, because of the limitation on the scope of coverage through terms and conditions or the use of HS interpretative rules, ITA products might be excluded as a result; this is not necessarily supportive in terms of the ITA. The author argues that the dispute settlement mechanism does not provide a satisfactory systemic solution for the ITA. In this regard, the author proposes that establishing an 'understanding' on the maintenance of product coverage of current ITA under technological change, which includes the use of 'like product' analysis and the development of an 'indicative good practices guidance', might serve as a pragmatic tool and the starting point for further discussions towards finding the 'simple, transparent, and expeditious solution' contemplated by the ITA Committee.

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ISSN: 1011-6702
ID: TRAD2011014

Proliferating free trade agreements (FTAs) in recent years may have conflicting effects on anti-dumping (AD) uses among FTA parties. On the one hand, an FTA may increase a country's AD activities to protect its domestic industries from the increased import flows from other parties. On the other hand, an FTA supposedly helps reduce the use of AD measures to accomplish the purpose of free trade. Which effects prevail can shed important lights on the question of whether an FTA can be a stumbling block or a building block.

This article examines the effects of FTAs on AD activities based on comprehensive empirical analysis. Using longitudinal data of major AD user countries from 1995 to 2009, we found that there is clearly an inverse relationship between an FTA and AD activities. This finding represents the user's tendency to trigger less AD filings against FTA membership, regardless of facing more imports from FTA partners. This article also captured dynamic FTA effects based on a series of distribution of time dummies. The estimation results from the dynamic model show that the FTA enactment year clearly has significant effect, suggesting substantial reduction of AD investigations in that year.

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ISSN: 1011-6702
ID: TRAD2011015

Cross-retaliation, where a World Trade Organization (WTO) member whose rights have been infringed under one WTO Agreement retaliates against the offending member under another WTO Agreement, is seen by some commentators as a way to counteract the deficiencies of conventional trade retaliation and mitigate the asymmetry of power in the WTO dispute settlement system. However, the potential of crossretaliation as an effective remedy remains unclear. This article argues that a credible and probable threat of cross-agreement retaliation could provide a powerful incentive for ex ante compliance. The credibility of the threat is established by reference to the WTO Agreement that is targeted. The suspension of Trade-Related Aspects of Intellectual Property Rights (TRIPS) obligations, in particular, holds great promise. The probability of the threat depends on the likelihood of the Dispute Settlement Body (DSB) authorization to suspend concessions, the outcomes of previous threats, and actions to operationalize cross-retaliation. WTO jurisprudence has fleshed out the requirements of Article 22.3 of the Dispute Settlement Understanding (DSU), allowing relatively safe assumptions as to the likelihood of DSB authorization to suspend concessions across agreements where significant economic disparities exist between the disputing parties. Previous cases featuring the threat of cross-retaliation reveal a modest influence on the policies of disputing parties. Finally, the operationalization of cross-agreement retaliation pursuant to the TRIPS Agreement is riddled with legal and policy problems, mainly in connection with the personal and territorial scopes of the suspension, the justiciable nature of intellectual property (IP) rights, the quantification of the suspension, the continuous supply of IP-dependent goods, and the consistency of the suspension with other, non-WTO international obligations. However, these problems do not prohibit developing countries from reaping the benefits of asymmetric information, so long as they create the impression of carefully structured retaliation plans that are ready to be triggered in the event of DSB authorization.

A reasonable probability is the only certainty.

Edgar Watson Howe (1853-1937)

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ISSN: 1011-6702
ID: TRAD2011016

Against the background of the debate about the impact of World Trade Organization (WTO) law on the provision of public services at the national level, this article seeks to establish whether a notion of public services has emerged under the General Agreement on Trade in Services (GATS). After outlining the role of that concept in the context of economic integration agreements in general, this article surveys GATS exemptions and regulatory provisions and argues that the GATS has, in fact, failed to develop an autonomous notion of public services. Such an 'agnostic' approach is contrasted with the 'dialectic' characterizing the European Union (EU), which, in constant dialogue with its Member States, has developed a sophisticated theoretical and regulatory framework for 'Services of General Interest (SGI)'. It is concluded that the institutional features that differentiate WTO intergovernmentalism from EU supranationalism largely account for such a conceptual cleavage.

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ISSN: 1011-6702
ID: TRAD2011017

With the adoption of a new transparency mechanism for Regional Trade Agreements (RTAs) highlighting a crucial shift from 'examination' of RTAs to their 'consideration', the World Trade Organization (WTO) dispute settlement mechanism remains the only available channel for checking RTA consistency. In practice, however, the WTO adjudicatory bodies have been reluctant to deal with this issue. This may be explained with the (1) complexity of the WTO compatibility test and (2) the lack of clarity in the WTO substantive provisions concerning regional trade. The first hurdle could be overcome with the panel's approach in US - Line Pipe supplemented by an in-depth analysis of only problematic aspects of the RTA identified by the complainant. As for the second constraint, WTO members should put more effort to complete the pending work on the clarification of 'systemic issues' or, failing that, use their exclusive power to adopt authoritative interpretations or encourage the dispute settlement bodies to fully utilize their interpretative authority under the Dispute Settlement Understanding (DSU). In addition to the 'consideration' approach, the links between notification and litigation and between the Secretariat's factual presentations and dispute settlement also have some legal implications for WTO litigation involving RTA issues.

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ISSN: 1011-6702
ID: TRAD2011018

In recent years, the European Community (EC) has concluded several trade agreements with several African, Caribbean, and Pacific (ACP) countries. These agreements, designed as a means to help eradicate poverty through trade and development, are known as Economic Partnership Agreements (EPAs) and provide ACP countries with preferential and differential trade benefits. Each agreement contains most favoured nation (MFN) clauses, providing that the EC must be accorded any more favourable treatment that an ACP country grants to certain third states not party to the EPA falling within the agreement's definition of a 'major trading economy'. These third states, or 'major trading economies', include less developed emerging economic powers. This paper examines potential challenges to the EPAs' MFN clauses, providing an in-depth factual analysis of the MFN clauses and a determination of possible ways for disputes to arise mainly under World Trade Organization (WTO) law and, to a lesser extent, within the EPA dispute resolutions provisions. The major case study is the MFN clause contained in the EC-Caribbean Forum (CARIFORUM) agreement, but the similarities in MFN provisions make the arguments generally applicable across the spectrum of EPAs concluded between the EC and ACP countries.

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ISSN: 1011-6702
ID: TRAD2011019

On 1 January 2011, a new regulation on EC Generalized System of Preferences (GSP) rules of origin came into force, ending a reform process that was initiated by the Commission Green Paper of 2003 on the future of rules of origin in preferential trade arrangements. The new EC GSP rules of origin herald a new era and set a benchmark for other preference-giving countries: they are far more liberal than the previous ones with the notable exception of fishery products and processed agricultural food. The Regulation also introduces as of 2017 a new administration of rules of origin whereby origin declarations are made upon registered exporters designation of the certifying authorities.

The aim of this article is twofold. The first is to analyse the EC reform to assess the major changes from previous rules of origin; the second aim is to briefly analyse the foundation, evidence, and studies that have underpinned such reform. It discusses the methodology used by the EC Commission and developed by the author in previous UNCTAD papers in setting a given rule of origin. The article concludes with a comparative table of old and new product-specific rules of origin outlining the major changes in key industrial sectors such as agri-food products, clothing, machineries, and electronics.

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ISSN: 1011-6702
ID: TRAD2011020

With the sharp contraction of economic activity in the wake of the global financial crisis that started in 2007, many have worried that governments around the world would resort to protectionism in a desperate attempt to mitigate the effects of the recession on their domestic economies. However, the World Trade Organization (WTO)'s 2009 assessment suggests that new protectionist measures affect a maximum of 1% of world trade in goods and services, while between November 2009 and May 2010, only 0.4% of trade was impacted by additional import restricting measures. In this article, we assess the importance of trade policy in crisis management and resolution by presenting case studies on past financial and economic crises and we investigate the main reasons for the absence of protectionism in the wake of the latest financial crisis.

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ISSN: 1011-6702
ID: TRAD2011021

The proliferation of regional trade agreements (RTAs) in the recent decades threatens the future of the multilateral trading system (MTS) because the exclusive trade preferences of RTAs, although approved under the provisions of Article XXIV General Agreement on Tariffs and Trade (GATT), are fundamentally inconsistent with a core principle of the MTS, the most favoured nation (MFN) principle, and causes discriminatory trade practices and fragmentations of trade disciplines. This paper argues that an ultimate solution will be reconciling the terms of RTAs with the core principle of the MTS by requiring extension of exclusive RTA preferences to the entire World Trade Organization (WTO) membership on an MFN basis after a certain period of time. The article also attempts to demonstrate the feasibility of the proposed solution with an application of the game theory. The article also analyses the impact of the proposed extension on the WTO system and discusses special and differential treatment (SDT) in favour of developing countries, particularly least developed countries (LDCs), in the context of the proposed solution.

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ISSN: 1011-6702
ID: TRAD2011022

As many countries move towards adopting domestic measures to mitigate the effects of climate change, there has been extensive consideration in academic literature regarding whether unilateral trade measures could be used to offset carbon leakage and competitiveness concerns in a manner that would comply with the rules of the World Trade Organization (WTO).1 However, little consideration has been given to whether such measures would be permissible under the United Nations Framework Convention on Climate Change (UNFCCC)2 and how this could affect the outcome of a WTO dispute.

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ISSN: 1011-6702
ID: TRAD2011023

In the rush to enact cap and trade, major World Trade Organization (WTO) concerns have been overlooked. These problems are not necessarily fatal, but fixing them would have political costs. Free emissions allowance rebates to trade-intensive industries represent a WTO-illegal export subsidy, which may make a US cap-and-trade system unworkable for export-dependent economies like Japan, Germany, and China. The best interim solution would be a carbon or energy tax that is imposed on imports and rebated on exports to ensure a level playing field. Such a system could be implemented under the WTO's existing border tax adjustment rules even in the absence of a multilateral climate agreement.

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ISSN: 1011-6702
ID: TRAD2011024

Is China complying with its World Trade Organization (WTO) anti-dumping (AD) commitments? The strong import competition created by the rapid opening of China's domestic market and the continued state involvement in its industry could conceivably generate domestic pressure on the Chinese government to use AD measures intensively and possibly illegally. Moreover, since its exports are a primary global target of AD actions, China might be expected to retaliate by levying questionable AD measures on imports.

Despite factors conducive to a more protectionist bias and possible non-compliance, I argue that China is not only complying with AD rules but also demonstrating domestic restraint, and to a certain extent, a pro-liberalization interpretation of the rules. This policy along with China's Doha Round negotiating proposals on AD suggests what is characterized in this article as a compliance-plus policy. The fact that China has chosen to pursue such a policy is not trivial, taking into account the more protectionist paths taken by other key WTO members. On a broader level, this case study aims at contributing to the contemporary debate regarding China's changing role in the global arena. By complying with WTO rules, China is demonstrating that it is accepting, following, and becoming increasingly vested in their maintenance.

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ISSN: 1011-6702
ID: TRAD2011025

Given the bilateral structure of the World Trade Organization (WTO) dispute settlement process, several scholars have concluded that success in the process is determined by the complainant state's ability to make a credible and potentially harmful retaliatory threat to the respondent state. Previous research has found that the trade relationship between the two states in a dispute influences the potential potency of retaliatory threats. This analysis builds off of previous studies and hypothesizes that membership in a Regional Trade Agreement (RTA) will increase a state's bargaining position and its success in the dispute process. A probit regression is used to test this hypothesis. Fifty-seven dispute settlement cases from 1995-1998 are included in the analysis. The results indicate that RTA membership does increase a state's likelihood of success in the WTO dispute settlement process, but only for the complainant state in the dispute.

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ISSN: 1011-6702
ID: TRAD2011026

Political economy theories of international trade predict the convergence of trade policy preferences between small and large exporting enterprises within a sector. However, this convergence does not generally occur in service trade, which restricts the way a service provider is allowed to supply a service across borders. By comparing the latest General Agreement on Trade in Services (GATS) offers with the new preferential services trade agreements of the 2000s, this paper explores the extent each liberalization track provides market access in modes of supply preferred by either small or large enterprises. It finds that the preferential track is more likely to level the playing field between the two.

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ISSN: 1011-6702
ID: TRAD2011027

This paper provides an introduction to the basics of European Union (EU) imports, tariffs, and tariff regimes. Firstly, it describes the inherent complexities in the EU tariff schedule and outlines the approach taken for aggregating EU tariffs from the ten-digit level to a lower level of aggregation. Secondly, the paper presents the distribution of EU imports by main partners and broad product groups under the four different statistical import regimes and highlights the importance of which statistical regime a product is classified under. Thirdly, based on a simplified classification, the paper explains the methodology behind the merger of tariff data and trade flows used to provide information on the distribution of EU import flows by import tariff regime (Most Favoured Nation (MFN), Generalized System of Preferences (GSP), and other preferential regimes. Finally, an overview of EU imports by tariff regime is presented and commented upon.

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ISSN: 1011-6702
ID: TRAD2011028

The recent emergence of Sovereign Wealth Funds (SWFs) as active and important players in international financial markets has raised a host of questions about their likely effect on markets and states. This trend is further reinforced in 2010/2011 by the fact that despite the fears and turbulences that spread all over the world in reason of the global economic and financial crisis, SWFs have blatantly retained their influence. SWFs create a regulatory and theoretical challenge because they serve two masters with very different agendas. This article is the first to explore the challenges governments face when they wish to set up an SWF. It explores determinants and policy options governments have to set up an SWF by analysing the fiscal and monetary parameters while simultaneously focusing on the regulatory determinants funds may and should comply with in order to be better accepted as international investors. The challenges are important since SWF are expected to grow in the future and might emerge as decisive investors throughout a world in crisis.

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ISSN: 1011-6702
ID: TRAD2011029

The imposition of anti-dumping measures under the World Trade Organization (WTO) rules requires three main conditions: the existence of dumping, material injury and the nexus between dumped imports and the damage inflicted to the domestic industry. One of the three possible forms of material injury is threat of injury. The threat of injury claim represents a preventive mechanism that prompts the investigating authorities to act before actual material injury is inflicted on the domestic industry. The major difficulty in assessing a threat of injury claim resides in the prospective nature of the investigating authorities' analysis. Since material injury has not yet occurred at the moment of the analysis, the investigating authorities must determine whether, based on the facts available, material injury is likely to occur in the near future. In order to prevent speculation and abuse, the WTO Anti-dumping Agreement sets forth the elements to be considered for the prospective assessment, such as an analysis based on evidence and facts, a clearly foreseen and imminent change in circumstances, and the economic factors relevant for the determination. The WTO case law adds to these rules, making it clear that the situation of the domestic industry prior to the initiation also plays a role in the prospective analysis. Nevertheless, important matters occurring in practice during anti-dumping investigations at European Union (EU) level remained currently unaddressed. The most significant is the choice of the reference period that stands as a basis for the investigating authority's analysis, cumulation of imports from several countries in threat of injury investigations and calculation of the injury margin. This article aims at addressing these issues based on a recent anti-dumping investigation finalized in September 2009, Seamless Tubes, and scrutinizes whether the European Institutions' approach in this case was in accordance with the WTO standards.

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ISSN: 1011-6702
ID: TRAD2011030

Keywords:
MFN tariffs, preferential tariffs, reciprocity, GSP JEL classification: F13,F15.

In this paper, we address the impact of Multilateral Trade Liberalization (MTL) on the preferential tariffs granted by the European Union (EU), which is one of the largest traders and one of the biggest contributors to MTL. We empirically address two important questions. First, if the Most Favoured Nation (MFN) tariff for a product is higher, does it lead to a higher or lower preferential tariff? Second, with the EU being a large trading partner in such agreements, does reciprocity matter for giving meaningful preferential access? For a given MFN tariff, we model the preferential tariff with a simple linear functional form. We draw three important conclusions. First, the products that are highly protected do not get high preferential access even at the regional level. Second, reciprocity plays only a limited role in granting better preferential access. Third, the generalized system of preference (GSP) preferences matters when the EU negotiates with the developed partners, but it does not matter when it negotiates with the developing partners.

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ISSN: 1011-6702
ID: TRAD2011031

Keywords:
Services, trade in services, preferential trade agreements, General Agreement on Trade in Services, multilateral trading system JEL classification: F10, F13, F15, L8

This paper takes stock of the forces that lie behind the recent rise of preferential agreements in services trade. Its initial focus is with a number of distinguishing features of services trade that set it apart from trade in goods and shapes trade liberalization and rule-making approaches in the services field. The paper then documents the nature, modal, and sectoral incidence of the trade and investment preferences spawned by preferential trade agreements (PTAs) in services. It does so with a view to addressing the question of how preferential the preferential treatment of services trade is. Finally, the paper addresses a number of considerations arising from attempts to multilateralize preferential access and rule-making in services trade.

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ISSN: 1011-6702
ID: TRAD2011032

It is an accepted view in the trade policy literature that those who lose from external trade are much more easily mobilized politically than those benefiting from it. As a consequence, the argument goes that there is an overrepresentation of protectionist interests in the political arena and a persistent pressure on policymakers to shield their markets from foreign competition. However, I argue that under certain circumstances, importdependent firms may very well be able and willing to mobilize politically and defend their anti-protectionist trade interests in the political arena. I will use the recent European Union (EU) anti-dumping case against Chinese and Vietnamese shoes to illustrate my argument.

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ISSN: 1011-6702
ID: TRAD2011033

The educational market has grown in size with more exporters entering the field to satisfy growing demand worldwide. The education sector today truly operates in a global context with institutions, programmes, and people supplying services across borders at an unprecedented scale. Yet, one of the anomalies of the education sector is that, despite the rapid internationalization of education services, limited progress has been achieved in trade negotiations. Education services remain one of the least committed sectors under the General Agreement on Trade in Services (GATS), as well as in Preferential Trade Agreements (PTAs). Firstly, this article reviews the factors behind the growth in trade in education services, particularly at the tertiary level. These include a combination of demographic changes, technological developments, national development goals, and governmental reforms to the funding and provision of higher education. Secondly, it argues that trade policy and negotiations need to wake-up to the global nature of the education sector and address the complex international trade and regulatory challenges. That would not only better reflect the reality on the ground but, through the formulation of negotiating positions, also ensure an informed debate of efficiency and equity considerations.

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ISSN: 1011-6702
ID: TRAD2011034

Keywords:
China, GMS, Trade, Investment JEL Classification: F13, F14, F15

The objective of this article is to understand why the Chinese firms are investing outside China and how China stands to gain from this decision. For our analysis, we consider the case of China's trade and investment relation in the Greater Mekong Subregion (GMS). We find that a reason for the Chinese firms to invest in the GMS has to do with higher domestic input cost as well as to evade protectionist measures in the United States and the European Union (EU). As to how China stands to gain, it is largely explained through elements of complementarities in trading and investment relationship.

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ISSN: 1011-6702
ID: TRAD2011035

This article analyses the economic merits of the factual right of governments to interpose themselves as political filters ex ante of potential World Trade Organization (WTO) disputes. As analysed in this article, the current state of WTO law regarding the initiation of dispute settlement proceedings undermines the longterm objectives in pursuance of which states join trade agreements like the WTO Agreement in the first place. This article proposes the creation of an independent prosecution department within the WTO Secretariat, with an exclusive right to initiate dispute settlement proceedings. Without the existing discretionary filtering power, WTO membership would constitute a more credible commitment by governments that they wish to tie their hands in order to better resist domestic lobbying from powerful, importcompeting, industries, giving in to which might maximize the government's short-term political welfare but would be contrary to society's long-term interest in free trade.

[T]he true purpose of international [trade] negotiations is arguably not to protect us from unfair foreign competition, but to protect us from ourselves.

Paul Krugman

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ISSN: 1011-6702
ID: TRAD2011036

Copyright © 2011 Kluwer Law International
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ISSN: 1011-6702
ID: TRAD2011037

Copyright © 2011 Kluwer Law International
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ISSN: 1011-6702
ID: TRAD2011038

The World Trade Organization (WTO) is the busiest state to state court nowadays. It is a rarity in international relations since it includes compulsory third-party adjudication and a permanent second instance court. This paper aims to shed light on the actual use of the system by WTO Members. We divide WTO Members into five distinct groups and evaluate their participation in terms of which agreements they invoke as legal benchmark to challenge practices by other WTO Members, the identity of panelists chosen, their percentage of wins and defeats, etc. The time span for our statistical observations extends from the advent of the WTO 1995 to end of 2010.

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ISSN: 1011-6702
ID: TRAD2011039

Trade barriers in the form of export restrictions imposed on various food products and natural resources have been subject to extensive public attention. A notable illustration of the growing importance of export restrictions was the establishment of a panel by the World Trade Organization (WTO) Dispute Settlement Body (DSB) in December 2009 to examine complaints brought by the United States, the European Union (EU), and Mexico concerning China's export restriction policies. While export restrictions undermine the stability of the multilateral trading system by distorting global markets, the WTO law regulating this field arguably represents a case of 'under-regulation' or 'regulatory deficiency'. Hence, stricter WTO regulation in this area of apparently large 'policy space' is needed. However, various reform proposals submitted to the WTO face strong opposition mainly from developing countries. In this context, this article attempts to illustrate how a sufficiently 'differentiated' reform agenda on export restrictions could help maintain the stability of the multilateral trading system while addressing the legitimate concerns of developing countries.

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ISSN: 1011-6702
ID: TRAD2011040

Research on the relationship between democracy and trade has so far neglected multilateral negotiations and more generally the content of trade agreements, in particular the market access bindings undertaken by countries. This article finds that more democratic countries undertake greater market access commitments under the multilateral General Agreement on Trade in Services (GATS). I argue that non-democratic regimes take fewer commitments, because these reduce their discretion in granting rents to ensure the support of small groups. In contrast, for democratic regimes, commitments that lock-in levels of access have lower costs because voters generally do not favour increased protectionism. Democracies also have greater incentives to take commitments since they signal good economic policy-making to voters. Moreover, the article finds that endowments have a direct impact on commitments. I argue that greater human capital endowments translate into greater pressures from industry groups for international commitments. The empirical analysis provides support for these propositions. The analysis also suggests that economic size and regulatory capacity are positively linked to GATS commitments.

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ISSN: 1011-6702
ID: TRAD2011041

This article examines the effects of over 250 preferential trade agreements (PTAs) on trade flows distinguished into parts and components (PCs) and final goods in production networks for the period of 1979-2008. The gravity equation estimates suggest that the concurrent year effects of PTA formation on trade in PCs are not seen, while they have the positive impact on trade in final goods. Rather, it is found that PTAs have positive and perversive effects on both types of trade flows in six and nine years after the PTA formation.

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ISSN: 1011-6702
ID: TRAD2011042

This article looks at the General Agreement on Trade in Services (GATS) footnotes as a separate sequence, in terms of both form and substance. In terms of form, the current interpretative approach towards these footnotes, which overlooks their separation from the relevant GATS Articles, is questioned. In terms of substance, interpretative patterns that may be anticipated to appear in future GATS cases are illustrated, based on the analysis of current jurisprudence.

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ISSN: 1011-6702
ID: TRAD2011043

Recent scholarship raises a number of questions about how countries at different income levels use the World Trade Organization's (WTO's) Dispute Settlement Understanding (DSU). It is generally accepted that countries with large trade volumes will use the DSU more than smaller economies. It stands to reason that developed countries would also be faster to participate in dispute settlement processes after acceding to the WTO Agreement. This article shows that economic development status does not explain the speed at which members engage in dispute settlement following accession. In fact, there is less uniformity in the pace at which members undertake dispute settlement than might be expected given the global divisions of wealth, access to information and availability of legal talent.

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ISSN: 1011-6702
ID: TRAD2011044

Through preferential free trade agreements (FTAs), the United States seeks to secure concessions in sectors, such as cultural and audiovisual services, from which to set precedents for its next trade liberalization endeavours. Insisting on wide-ranging liberalization and predictable, clearly defined trade rules, the United States has used a top-down or negative list approach. Hence, sectors and measures, in the fields of services and investment, not specifically excluded are covered by liberalization commitments. On the other hand, states are encouraged to use a wide array of financial and regulatory instruments in the pursuit of cultural policies under the 2005 United Nations Educational, Scientific and Cultural Organization (UNESCO) Cultural Diversity Convention, which the United States has strongly opposed for its potential trade-restricting effects. In view of the deadlock in current multilateral trade negotiations, the hortatory character of the provisions of the Convention, and the US stance on the treatment of cultural goods and services in international economic exchanges, US FTAs are to prove the main source of legal constraints as to states' ability to pursue cultural policies.

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ISSN: 1011-6702
ID: TRAD2011045

Copyright © 2011 Kluwer Law International
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ISSN: 1011-6702
ID: TRAD2011046

Copyright © 2011 Kluwer Law International
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ISSN: 1011-6702
ID: TRAD2011047

Copyright © 2011 Kluwer Law International
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ISSN: 1011-6702
ID: TRAD2011048