General Issue: Vol. XIV, No. 2 (Winter ’22)

Article 6 guidelines on market-based mitigation completed the Paris Agreement Rulebook and provided details on how to establish international compliance carbon markets based on the transaction of carbon credits between countries. In this article, the authors take stock of the new regulatory developments and assess their implications for international trade law. The authors examine the rules agreed at the latest Conferences of the Parties (COPs) to the United Nations Framework Convention on Climate Change (UNFCCC) against the reality of the fast-growing voluntary carbon market (VCM). In addition, the authors assess how far the new carbon markets space, created by the Article 6 guidelines, may pose problems of coordination and/or conflict with the rules of the World Trade Organization (WTO). Key challenges that will potentially be faced by developing countries, followed by a focus on more work to be done in this area, have also been identified by the authors. In short, the authors find that while the new rules agreed at the latest COPs in Glasgow and in Sharm el-Sheikh aim at ensuring robust accounting and high quality of carbon credits, there is the risk that they do not succeed in bringing the necessary level of convergence between Article 6 transactions and the VCM market. To the extent that the VCM is by far the fastest-growing segment of the carbon markets space, further steps are needed to ensure greater alignment with Article 6 of the Paris Agreement. The authors also find that any assessment of Article 6 transactions under WTO law is conditional upon finding that carbon credits can be characterised either as a good/product or a service. If included within the scope of multilateral trade rules, claims of discrimination and subsidisation are foreseeable, affecting not only upcoming mitigation projects but also the credits transitioning from the Kyoto Protocol (KP) regime. Obviously, the challenges highlighted in this article disproportionately affect developing countries, due to the latter hosting the mitigation activities. Further research is needed to ensure a positive-sum integration between trade and climate rules regarding market- based mitigation.

Non-participation by states in international adjudicatory proceedings is not novel. This practice has invited considerable academic scrutiny, including in recent years. The past decade has demonstrated that claims of a decline in the practice of non-participation were misguided. In fact, the inquiry now seems to have shifted from deciphering the permissibility of non-participation to assessing its legitimacy and efficacy as a strategic tool. Unfortunately, this discourse has not extended to investor-state arbitral proceedings so far. This is unfortunate given the recent re-emergence of this practice in investor-state disputes as well. This article seeks to fill this gap in literature, by examining whether non-participation is a legitimate and effective strategic tool available to states for undermining investor-state arbitral proceedings that they perceive to be without jurisdiction. Specifically, it explores whether international law imposes a duty upon objecting states to participate in investor-state arbitral proceedings. And if yes, it assesses whether a non-participating state may also convey its position to the tribunal through irregular communications. While the ultimate decision to not participate in a proceeding or communicate with the tribunal through irregular communications vests with a state, and also depends on the political considerations involved, this inquiry hopes to trigger a conversation that would facilitate this decision-making in each case.

This article addresses the measurement of market price support (MPS) under the World Trade Organization (WTO) Agreement on Agriculture (AoA) and the stance of India and many other developing countries that exception from any limit on producer support be allowed for their acquisition at administered prices of public stocks for food security purposes, known as Public Stockholding (PSH). This position has been opposed by some agricultural exporting countries and the disagreement has contributed to an ongoing impasse in WTO negotiations, including at the recent 2022 Ministerial Conference. The article argues that there are problems with the AoA’s MPS measurement and that revising the formula for the same should be considered as a way to break the impasse on public stockholding. The revised calculation would reduce the AoA MPS in many cases and bring it closer to an economic measurement of support. Thus, India and other developing countries could accept continued disciplines that would not be as onerous as with the current measurement. In short, there is fault on both sides in the PSH deadlock.

The premise of carbon border adjustment mechanisms is that imported goods should be subject to the same carbon pricing as domestically-produced goods. Adjustments are imposed to mitigate carbon leakage, understood as the relocation of production in order to avoid domestic carbon pricing. The aspiration is that domestic carbon pricing, along with the adjustment for imports, begins to reduce overall emissions, rather than merely moving emissions from one country to another. The European Union (EU) is currently advancing towards the adoption of what will be the most ambitious adjustment mechanism of its kind. The European Parliament’s support here is conditioned on the World Trade Organisation (WTO) law compatibility, while the Commission’s proposal offers assurances to this effect. This paper focuses on this question of compatibility. It finds that the Commission’s assessment is overly optimistic at least if this is understood as indicating that the adjustment mechanism would not breach WTO law at all, rather than that the breaches would be capable of justification under the main exceptions provision.

The Dispute Settlement Body (DSB) of the World Trade Organization (WTO) is unquestionably the most elaborate rules-based system to be established in the post-World War II era, internationally. The DSB has helped maintain the smooth running of the multilateral trading body for over two decades through its ‘rule of law’ approach to dispute settlement. The Appellate Body (AB), which the WTO relies on heavily for its full functionality, is as of December 2019 not functional, which effectively deprives all Member States of their legal right to appeal the findings of a Panel’s decision. While various factors are attributable to the current impasse at the WTO vis-à-vis the AB, one underlying factor, which the authors of this article view as fundamental, is the proliferation of regional trade agreements (RTAs), which developed countries have come to strongly rely upon. This article will seek to demonstrate that there is a direct connection between i) the action of withdrawing support for the AB by the United States (US), and thereby creating a stalemate at the DSB (although being a leading/founding Member State of the multilateral trading system), and ii) the proliferation of RTAs promoted by developed country Member States (in particular, the US);1 or, in the alternative, examine the question: is there a direct connection between the RTAs of the US and the AB crisis?

The paper conducts an empirical analysis of stakeholders’ responses to the United States Trade Representative’s (UTSR) public consultation on the US-UK trade negotiations with the objective of shedding light on the efficacy of this type of mechanism for engaging stakeholders in trade negotiations. The findings reveal the limited capacity of this public consultation mechanism to reach out to the diverse range of stakeholders that are likely to be affected by trade negotiations and to take advantage of stakeholders’ input in the formulation of the USTR’s specific objectives for these negotiations. The paper suggests ways to strengthen the outreach of public consultations and the impact of stakeholders’ responses on the trade policy-making process in order to reinforce trust in the governments’ efforts to promote engagement in trade negotiations.

This paper aims to expand the environmental exception within General Agreement on Tariffs and Trade (GATT) to include limited extraterritoriality. The author poses an inquiry to ascertain whether the concept of common concern may be used for such inclusion, if one can import it into the Covered Agreements of the Marrakesh Agreement. The current environmental exception is unable to withstand the true pressure of global climate change. It leaves a World Trade Organization (WTO) Member with insufficient defence against another country’s actions harming the environment. Through evolutionary interpretation, we can align the reality of the current environmental crisis with a Member’s WTO obligations. The objective of sustainable development and the concept of common concern of humankind may be used to expand the scope of Article XX(g) through evolutive interpretation based on both ordinary meanings of a term and the living instrument approach. This style of interpretation cannot be used to infringe rights of other WTO Members. The paper, thus, advocates for a balanced approach through a limited form of extraterritoriality by expanding the scope of Article XX(g) to tackle these issues, without adding or diminishing their rights or obligations.

The global data divide has emerged as a major policy challenge threatening equitable development, poverty alleviation, and access to information. Further, it has polarised countries on either side of the data schism, who have often reacted by implementing conflicting and sub-optimal measures. This paper surveys such policy measures, the politics behind them, and the footprints they have left on the digital trade or electronic commerce rules contained in free trade agreements (FTAs). First, this paper details an understanding of what constitutes the global data divide, focusing on three components, namely access, regulation, and use. Second, the paper surveys electronic commerce or digital trade rules in FTAs to understand whether existing rules deal with the widening data divide in a comprehensive manner and, if so, how. Our primary argument is that the existing FTA disciplines are deficient in addressing the global data divide. Key problems include insufficient participation by developing countries in framing digital trade rules, non-recognition of the data divide affecting developing countries, and lack of robust and implementable mechanisms to bridge the data divide. Finally, we present a proposal to reform digital trade rules in line with best practices emerging in FTA practice and the main areas where gaps must be bridged. Our proposals include enhancing technical assistance and capacity-building support, developing a tailored special and differential treatment (SDT) mechanism, incentivising the removal of data-related barriers by designing appropriate bargains in negotiations, and boosting international regulatory cooperation through innovative and creative mechanisms.

The recent developments within the European Union (EU) with regards to foreign subsidies and the regional developments on fuel subsidies, have fuelled further the discussions on reforming the subsidization rules in the World Trade Organization (WTO). One aspect of the reform process is the categories of subsidies considered to be prohibited under the Agreement on Subsidies and Countervailing Measures (SCM), currently covering only export and local content subsidies. Hence, looking ahead this reform process, the purpose of the present paper is to analyse the legal standard of prohibited subsidies as provided for in Article 3.1 SCM, and specifically the term ‘contingent’ used in provisions 3.1 (a) and 3.1 (b). The analysis primarily focuses on the interpretation and application adopted by the WTO adjudicating bodies. The plurality of WTO case laws provides us a wide canvas on which accurate conclusions can be drawn on the scope of Article 3.1 SCM and the types of governmental interventions covered. At this point, an attempt is made to provide a more consistent interpretation of the term ‘contingent’ having in mind the customary rule of interpretation as well as the economic rationale of the existing rules. This identification mainly seeks to assemble the different pieces found in the WTO jurisprudence and the legal theory and reformulate the legal standard, proving a necessary comprehensive understanding of the rules, ahead of the reform process.

International trade has played a part in global obesity epidemic that is causing an upsurge in non-communicable diseases. To address this, governments have sought to provide consumers with more nutritional information about the food that they consume, with the aim of encouraging them to make healthier dietary choices through the use of interpretative front-of-pack (FoP) labelling for packaged food. In the same vein, India released its 2019 draft regulations on interpretative labels, which prescribed ‘RED’ warning labels for food products containing high calorie content. Although this was rejected due to a lack of industry consensus, the Food Safety and Standards Authority of India (FSSAI) is again in deliberations, which raises questions under World Trade Organization (WTO) law, particularly the Agreement on Technical Barriers to Trade (TBT Agreement).

The TBT Agreement upholds the right of member states to adopt measures required for safeguarding human, animal, or plant life at thresholds they deem necessary. As FoP labels affect domestic and imported goods alike, Article 2.1 may be invoked to ensure adherence to the national treatment and most-favoured nation principles. Similarly, Article 2.2 mandates that technical regulations cannot create unnecessary obstacles to international trade. This involves analysing the design and operation of the measure to balance the degree of contribution towards the legitimate objective and the risks of non-fulfilment. Additionally, since the regulations refer to the Indian Council of Medical Research (ICMR) guidelines for scientific threshold, the use of relevant international standards under Article 2.4 becomes relevant.

Based on the TBT analysis, the article concludes with a recommendation to adopt a mandatory framework of health star ratings, while balancing trade liberalisation and members’ rights to regulate consumer health.

​Following its February 24, 2022 invasion of Ukraine, Russia became the target of one of the broadest and deepest sanctions regimes ever imposed by the United States and its Allies. This article is a comprehensive analysis of this extraordinary regime, the responses of India and China to it, and Russia’s countermeasures. What sanctions were imposed? How were they forged? Why were they levied? What were the costs, benefits, and consequences of imposing these sanctions? These theoretical and practical questions are so important that no international trade lawyer, scholar, student, or relevant stakeholder can afford to avoid them. Indeed, this case study will endure long after the war in Europe ends.