General Issue
Vol. X, No. 1
(Summer '18)

Conflict Resolution in a Changing World Order

Marike R.P. Paulsson

“Oh! Blessed rage for order, pale Ramon,

The maker’s rage to order words of the sea,

Words of the fragrant portals, dimly-starred,

And of ourselves and of our origins,

In ghostlier demarcations, keener sounds.”

Judge Crawford thus described the rule of law, international law and the world order of our era. In these times of Brexit, ISIS, Nexit, Frexit, and Trump, our world order is in a state of crisis. The world at large has hit the panic button rather than “Keeping Calm and Carrying On”. That panic might lead to a self-fulfilling prophecy with parties moving their conflict resolutions (whether arbitration, conciliation or mediation) elsewhere, but where? Prophecies are already being made about Asia on the rise. Where does Latin America stand in a world that was long dominated by the Old West? A crystal ball could hardly have predicted the Trump and Brexit era that we live in. States attempt to anticipate a future with this newfound reality. Canada is revising the relevance of the WTO when the future of NAFTA is up in the air and Mexico has recently ratified the ICSID Convention: perhaps, on the one hand, to encourage foreign investors to look to Mexico as a thriving place for FDI and, on the other, anticipating collaboration with trading nations without the NAFTA. While the Old West is juggling to grapple with its current reality, Asia continues to be on the rise with its One Belt & One Road initiative. In addition, it seems that Brexit has not impacted the attractiveness of London as a primary arbitral seat. The US, however, has many challenges to address. Some of these challenges are related to the Trump administration, like the impact that recent immigration policies will have on the US as a seat. In addition, unrelated to the geopolitical changes, the US courts have increasingly rendered questionable decisions under the 1958 New York Convention on the Enforcement of Foreign Arbitral Awards. The PEMEX decision - enforcing an annulled award - came with harsh criticism leaving appellate judges in Mexico feeling slapped on the fingers. At the same time, the decision jeopardizes the principle of international comity.[2] Perhaps the Trans-Pacific Partnership is dead with the geopolitical developments in the US; perhaps States will look to BITs and regional treaties more than multilateral treaties; and perhaps the future of investor-state dispute settlement will rest on commercial diplomacy, especially with the PR crisis that international arbitration finds itself in.  

Will the Price Ever be Right? Carbon Pricing and the WTO

Rohinton Medhora & Maria Panezi

Since the creation of the GATT and later WTO, the global trade governance system has served multiple related purposes – the reduction of tariffs and other trade barriers, the creation of norms around international trade, and dispute resolution. Climate change provides an opportunity to extend the role of norms in global trade governance, because of the central role that carbon pricing plays in reducing emissions. For carbon pricing to be effective and not lead to a “race to the bottom”, it has to be applied across all trading countries at a similar level. We show that a system of carbon taxes and border carbon adjustments (BCAs) that equalizes the price of carbon across all traded goods and services is compatible with the letter and practice of the WTO. In fact, given the inherently global nature of climate change, such a system will only function if it is centered within the multilateral trading system. Thus a global institution is used for the purpose global institutions are created for – enabling the production of a global public good, a cleaner environment.

Regionalism in a Multilateral Trading System: Legal Interplays between the Eurasian Economic Union & the WTO

Elke Hellinx

This paper explores the relationship between the Eurasian Economic Union (EAEU) and the WTO, and identifies some of the legal obstacles to their effective co-existence. In doing so, the paper touches upon ways in which membership of the EAEU may interfere with that state’s position within the WTO and with its obligations under the WTO Agreements. By using selected examples, it illustrates that the legal relationship between the EAEU and the WTO is an ambiguous one, and one which deserves special attention.

Starting point of this paper is a short overview of how regional trade agreements fit into the WTO structure in a general sense. It then discusses the process of deepening economic integration in the EAEU and the legal mechanisms through which Eurasian states have previously attempted to integrate trade with their partners in the region. A short stop will also be made at the institutional structure of the EAEU. The main body of the study delves into some of the legal interplays between the WTO and the EAU. It concludes with some thoughts and considerations as to whether the EAEU can be a building block for the WTO’s project of multilateral trade liberalisation. 

In Search of the Final Frontier – An Analysis of the Extraterritorial Effect of International Trade Measures from a Jurisdictional Perspective

Marieke Koekkoek

In this paper an approach to the assessment of permissible extraterritorial effect of international trade measures is proposed in which the law on jurisdiction is central. A changing reality has altered the thinking about concepts typically related to the law on jurisdiction. The ever emerging threat of climate change, the simultaneous developments of globalization and increasing nationalism, the introduction of new technologies; it is these changes that have affected the interpretation of concepts such as state sovereignty, coercion and proportionality. In turn, it is to these changes that WTO law has to adapt to remain relevant and legitimate. At the same time, it is fundamental to uphold the unique characteristics of WTO law. Principles such as the regulatory autonomy of the Members and non-discrimination cannot be discarded for the benefit of jurisdictional analysis. Here it will be shown that the introduction of the ‘new’ interpretation of the ‘old’ principles related to the law on jurisdiction allow for a customized analysis of the extraterritorial effect of international trade measures. WTO law is the lex specialis within which the assessment of legality of a trade measure falls. However, the analysis of the permissibility of the extraterritorial effect of the measure should be executed under the lex generalis of the principles of jurisdiction as they exist in customary international law. It is proposed that framing the legal issues in jurisdictional terms will in particular benefit the discussion on the relationship between trade and non-trade related concerns in WTO law.

The Old Sheriff and The Vigilante: World Trade Organization Dispute Settlement and Section 301 Investigations into Intellectual Property Disputes

Zachary Harper

The current systems available for addressing unfair trade practices involving intellectual property are ineffective. While the World Trade Organization’s dispute settlement process suffers from issues relating to monitoring and compliance when dealing with application of laws,  the domestic process for resolving trade disputes, Section 301, suffers of unilateralism that is  not supported by the international community. The current accusations by the United States that China is stealing intellectual property presents an opportunity to reconsider the issue of intellectual property dispute settlement. Ideally, both unilateral and multilateral methods of dispute settlement should be utilized. Alternatively, a new method of intellectual property dispute settlement, being bilateral negotiations, may be considered.

The Role of WTO in Sustainable Development Governance Revisited

Soo-Hyun Lee

International legal mechanisms in trade dispute resolution, such as the instruments of the WTO, must now, more than ever, take into consideration a wider range of interests that may very well complicate procedural aspects of the rule of law in trade disputes. Institutions such as these must continue to adapt as new conditions and variables present themselves, responding to cross-disciplinary iterations of justice such as environmental or socioeconomic justice between state and non-state actors. To that end, revisiting the role of the WTO requires a re-examination of its governance role in sustainable development as it relates to international trade. More jurisprudential encounters between international trade policy and climate change policy would bring these two estranged fields into a more predictable and meaningful union. This paper provides a legal basis and economic rationale for the calculation of a dumping margin that accounts for high-emissions production methods, which provide a summative discount to cost with government support, herein labelled the “tCO2e/t-s Adjusted Dumping Margin”. This paper identifies anti-dumping measures with the carbon-adjusted dumping margin as an ideal tool for addressing the sustainable development challenges presented by the Chinese iron and steel industry, not only because of the proven macroeconomic and firm-level influences of anti-dumping measures on export-oriented firms that benefit from industrial policy (or a lack domestic regulation), but also because of its firm-level impacts. In terms of the anticipated benefits for the Chinese iron and steel industry, one finds that should the proposed carbon-adjusted dumping margin be applied, the resultant anti-dumping duty imposed on steelmakers using high tCO2e/t-s blast furnace (BF) to basic oxygen furnace (BOF) steel casting processes will increase the ex-factory price up to the extent that it deviates unfairly from the average price of BF-BOF. This lays the road for more ambitious goals, such as minimum environmental standards of steel production set by the importing country imposed by ADMs