General Issue
Vol. X, No. 2
(Winter '18)

The American and Chinese trade wars of 2018 risk undermining not only the law of the World Trade Organization (WTO), as explained in Part I, but also the democratic mandates given by parliaments when they approved the 1994 WTO Agreement. Illegal import tariffs (e.g., as imposed by US President Donald Trump) and the collective undermining of the WTO dispute settlement system run counter to the WTO principles that are incorporated into the trade laws in the United States of America (USA/US), dealt with in Part II, and in the European Union (EU), detailed in Part III. Multilevel governance of global public goods (PGs)—like the WTO trading system, which has helped lift billions of people out of poverty by promoting unprecedented economic welfare, transnational rule of law and compulsory third-party dispute settlements—cannot remain effective if citizens and democratic institutions fail to hold their governments democratically and legally accountable for violating ‘PGs treaties’ (Part IV). This contribution uses the example of the USA and the EU to argue that constitutional democracies—including Asian democracies like India, Korea and Japan—must adopt more specific trade legislations to protect the WTO legal system. Multilevel governance of transnational PGs requires empowering citizens, parliaments and courts of justice to limit populist abuses of trade policy powers to tax and restrict citizens in manifestly illegal ways that reduce general consumer welfare, non-discriminatory competition and rule of law.

The completion of the Trump Administration’s first two years is an appropriate moment to take stock of the United States of America’s aggressive international economic policies.  The Trump Administration is carrying out a new form of American rejectionism powered by four horsemen of economic instability: first, the rejection of the international rule of law; second, the rejection of open markets; third, the rejection of economic peace in favour of perpetual economic war; and fourth, the rejection of the global interest.  The analysis herein shows how these four rejectionist policies are harming the United States, other countries, and the global order.  With respect to the global order, the article focuses on the World Trade Organization (WTO), regional trade agreements, and the Paris Agreement on Climate Change, and explains how the Trump Administration is attacking these important institutions.

In doing so, the article challenges three widely-held assumptions.  First, the article shows that in several important respects, American rejectionism did not begin with President Trump but rather was rooted in the economic policies of his recent Presidential predecessors, especially President Obama.  Second, the article shows that far from being the leading scofflaw in the WTO, China is not acting nearly as irresponsibly as the United States does in its constant and flagrant violations of international trade law.  Third, the article shows that the protectionist economic policies being pursued by the Trump Administration are unlikely to generate any short term gains for the US economy, and over time such policies will exact a loss for the US and global economy. 

Several recommendations are offered for ways to improve US policies going forward.  Among them are: ceasing the US war against the WTO Appellate Body, reinvigorating international trade negotiations, working with other countries to develop rules for the transition of nonmarket economies, and seeking a critical-mass international agreement to impose carbon charges so as to internalise the costs of greenhouse gas emissions.

Water shortages and climate change are among the most serious threats facing humanity, and are of immense environmental and human rights significance. This paper addresses the efforts made to deal with these threats under international trade law, with special focus on the General Agreement on Tariffs and Trade (GATT). In the case of water, the input is ‘virtual water’, i.e., the water that is consumed during the life cycle of a good or service (development, production, transport, etc.) up to the point that it is exported.  In the case of climate change, the input is ‘embodied carbon’, i.e., the carbon that is emitted into the atmosphere during the life cycle of a good or service (development, production, transport, etc.) up to the point it is imported. 

In each case, countries are likely to increase regulation of these inputs, and may employ measures that affect international trade.  In the case of virtual water, countries will be interested in protecting their own water supply from being consumed excessively to produce goods, such as agricultural commodities, for export.  In the case of embodied carbon, countries with strict carbon emissions standards will be interested in protecting their domestic producers from competition by goods from countries with less strict, and thus less costly, carbon emissions standards, as well as in preventing carbon leakage. 

This paper analyses three possible types of control measures for each of virtual water and embodied carbon, which reveals uncertainties in the trade law analysis and demonstrates that good faith efforts to deal with water shortages and climate change might run afoul of international trade regimes, thus setting up a conflict between these areas of law.  A particularly important aspect stems from the fact that both virtual water and embodied carbon have significant human rights implications, thus raising the issue of how human rights should be treated vis-à-vis international trade. In addition to discussing that relationship, the paper identifies four jurisprudential means of avoiding regime conflict, as well as the possibility of a trade waiver for climate change.

In a span of just two decades, the World Trade Organisation (WTO) has issued a remarkable number of two hundred plus panel reports and 140 plus appellate reports. Members’ compliance pursuant to these decisions, though not perfect, has also been commendable. For such reasons, the dispute settlement mechanism (DSM) has rightly been hailed as the WTO’s ‘crown jewel’. However, in the recent past, the DSM’s mandate of promptly settling disputes within the stipulated timeframes has come under tremendous pressure, resulting in major delays. Such delays present a serious systemic issue and undermine the objective of the DSM to promptly settle disputes. This paper undertakes a detailed analysis of the delays being faced at the panel and appellate stage. It analyses the delays in issuing/circulating panel and appellate reports right from 1995 till June 2018. Apart from this, it also discusses suggestions for remedying the systemic delays, such as restructuring the panels and the Appellate Body; revising the DSU timelines; and considering retrospective and provisional remedies. The preliminary conclusions of this paper are that while there is no denying that the DSM is under significant pressure, the situation has not yet reached a full-blown crisis. In fact, delays are common across all dispute settlement mechanisms, whether domestic or international. The DSM could, however, benefit from much-needed reforms given that the demands placed on it have outgrown its original design, structure, and capacity, all of which need to be attuned to meet today’s requirements.

China’s Protocol of Accession to the WTO in its subparagraph 15(a)(ii) allowed the WTO Members to treat China as a non-market economy; however, post December 11, 2016, the situation has changed as the concerned subparagraph has expired, and thereby has created a situation of uncertainty in relation to China’s market economy status. This article will first shed light on topics such as non-market economies (NMEs) and the legal rules concerning them under the WTO regime. Secondly, it will focus on the history and evolution of the non-market economy methodologies under the national regimes of the European Union and the United States. Lastly, China’s main trading partners’ reactions to these developments post-December 2016 are discussed.This article concludes that none of the provisions in China’s Protocol of Accession makes it obligatory for the other Members to afford a market economy status to China after December 2016.

Circumvention (or evasion) of anti-dumping duties, though widely debated during the Uruguay Round negotiations, led to nothing but a three paragraph long Ministerial Decision acknowledging the problem. Nevertheless, the European Union (EU), USA and India have gone on to incorporate anti-circumvention rules in their domestic regulations. However, principally against the Free Trade Theory and leaving excessive scope for protectionist abuse, these rules seem to protect the domestic industries even from fair trade. This is especially true considering the difficulties faced in differentiating between legitimate commercial activities and intentional cases of circumvention. Apart from highlighting the potential inconsistencies of these rules with the Anti-Dumping Agreement, the present paper explores the theoretical aspects of Indian law on circumvention in detail. In the absence of any judicial interpretation on it, reference to the EU law has been made to clarify various principles considered as grey areas that are yet to be settled. This comparative analysis helps give an idea about the quantitative and qualitative tests that can be borrowed from EU jurisprudence to make the law less ambiguous. However, a better alternative might be to deal with such cases with the help of already existing anti-dumping laws and other simpler solutions. Such alternatives become especially important when the cost of protectionist abuse and the risk of protection from even ‘fair trade’ outweigh the burden of fresh investigations in the long run.

Anti-dumping duties are a payment levied by a State to counter injurious dumping. This levy is demanded when importing a product into the territory of the State. By default, one would count on that compound term to be self-explanatory. After all, an anti-dumping duty is a mandatory levy that appears to be incurred upon importation in the same way as customs, excise or other import duties. Under European Union law, their nature is different and disassociated from other types of State levies. As will be argued in this note, the currently employed definition of anti-dumping duties under European Union law may be simple but carries with it a multitude of considerations and implications. As such, and while deriving from a judgment of the year 2000, the definition remains valid until today and provides an example to other jurisdictions on how to categorise anti-dumping duties in the national system of laws.

Despite being in operation for many years, safeguard measures are still shrouded in some amount of confusion and uncertainty. Certain issues that had been lying dormant for a while have now come to the fore, thanks to the tariff war between the United States and China. This article attempts to clarify some of the dense WTO jurisprudence concerning the meaning and legality of safeguard measures, in order to distinguish the two elements as has been suggested by the WTO’s Appellate Body. It finds that while the character and purpose of a measure go to the definition of a safeguard, all other elements concern the legality of the same.