General Issue
Vol. III, No. 2
(Fall '11)

The delicate balance between the demand and supply of natural resources is likely to be affected by the increase in population and the needs of emerging nations. China’s de facto embargo on rare earths in 2010 has brought these issues to the forefront of WTO jurisprudence. The dispute initiated by the US, E.U. and Mexico led to the Panel holding that the Chinese restrictions were contrary to the GATT prohibition on export controls. Part I of the article introduces the various facets of the dispute against the background of WTO principles regarding export controls. Part II of the article discusses the legality of export controls under GATT and the exceptions to the rule of prohibition of export controls. The facts of the Chinese rare earth minerals dispute, the questions of law involved, the discussions adopted by the Panel and the decision regarding the legality of such measures are analysed in Part III of the article. The Panel held that the Chinese measures were inconsistent with Article XI:1 and that the justifications under Article XI:2(c) as well as Article XX: (b) and (g) could not be upheld. Part IV examines the key themes present in the dispute and also summarily scrutinizes the supplementary questions involved. More specifically, it deals with the question of whether a Member can resort to Article XX: (b) and (g) to control the production of natural resources and impose export quotas on them. Part V offers a conclusion with regard to the formulation of certain principles regarding export controls and the role of the WTO in implementing them.

This article explores the international right of development, as expressed in the design of new trade-based international investment agreements (IIAs). The article shows that, hitherto, development has figured mostly in investment arbitration primarily through “jurisdictional gatekeeping” (what is designated to refer to issues involving access to dispute resolution procedures under the ICSID Convention). As this article shows in Parts I and II of this article, recent investment arbitrations in the past decade have turned on the issue of how to reconcile and interpret the meaning of “investment” within Article 25 of the ICSID Convention with the effect of the pro-development language in the Preamble to the ICSID Convention. While the Salini test will remain a much debated approach in international investment interpretation, the main subjective difficulty in elevating development to a condition or criterion for investment treaty coverage is that the international right of development is itself a dynamic concept, with equally divergent methods for assessing “contributions to economic development”. The inherent fluidity of the concept of development, coupled with the absence of any language within Article 25 of the ICSID on the international right to development, further supports the view that the Convention did not intend to impose development contributions as a strict condition or mandatory criterion before gaining access to ICSID jurisdiction.

Rather than focus on the problematic uses of the international right of development in jurisdictional gatekeeping, this article draws attention to the actual nature of the international right to development and its implementation, which has less to do with justiciability (or adjudicated remedies) and more to do with the direct implementation and supervision of States. The practicable development-oriented innovations in new trade-based IIAs, such as the COMESA Common Investment Agreement, the ASEAN Comprehensive Investment Agreement, and the ASEAN-China Investment Agreement, appear to align more closely with the actual nature of the right to development. These particular types of IIAs, which often form part of a complete trade cooperation package, operationalize the international right of development through: (1) permissible differentiation or graduated implementation of host State obligations, taking the host State’s stage of economic development into account; (2) transparency obligations and information exchanges between treaty partners; (3) joint investment promotion activities by treaty partners; and (4) coordinated institutional mechanisms that enable host State participation and access in monitoring treaty interpretation and any investment-related rulemaking. These phenomena demonstrate a marked paradigm shift towards a more effective deployment of the international right of development in international investment rule-making.

​Over the last decade, investor-state arbitration tribunals have shown more willingness to provide non-disputing parties with some possibility to participate through written amicus briefs. However, amicus participation is not a panacea to cure all of the existing shortcomings in investment law as regards transparency and access to justice. In fact, amicus has not yet been recognized as a right and is still subject to a series of limitations, all of which restrict its effectiveness. This article argues that such restrictions should be tempered in the case of indigenous peoples, in the light of their distinct cultural identity and the right to self-determination. To avoid the defenselessness of indigenous peoples and potential areas of overlap with their human rights, this article proposes the incorporation into international arbitration of the procedural institution of “intervention”−as opposed to amicus−from municipal law.

The most flattering statement regarding the Doha Round is that there is a lot of uncertainty surrounding its fate. The Doha Round, as originally designed and understood, is not an option anymore. Although a formula has been found to keep the ball rolling, at this stage it is impossible to predict what direction it will take. There exists a lack of leadership to conclude the round and it suffers from inherent birth defects. This absence of a conclusion might send the wrong message at a moment when the WTO is emerging as the only genuine forum of multilateral cooperation. Though this is not the first trade round in the history of the multilateral trading system and definitely not the only one that is taking longer than planned to complete, it is the first time that the round risks being ditched altogether. In all previous rounds, which were essentially ‘business’ deals, trading nations managed to come up with an agreement in the end. This is the first time that they have announced ‘we do it for development’, and they now risk delivering nothing. Something has got to give at this stage, and we are running out of time as far as options regarding ‘deliverables’ are concerned. The accent has correctly been placed on priority issues for the bottom billion. The WTO, even if this effort succeeds, will have to face some tough tests in the near future arising from issues which were not at all addressed during the Doha Round.

Ever since the World Trade Organization (WTO) came into being, there has been much academic debate as to whether efficient breach of WTO rules is, or should be, encouraged under the provisions governing WTO dispute settlement. This article argues that, although the WTO’s dispute settlement mechanism has not been designed to encourage efficient breach, the existing system accommodates, de facto, temporary non-compliance. By operating at least temporarily as a system of ‘breach and pay’, the current design of the WTO’s dispute settlement mechanism fulfils a crucial role as a systemic safety valve for rare scenarios where WTO Members find it impossible to comply with the DSB’s recommendations and rulings within the ‘reasonable period of time’ as determined according to Article 21.3 of the DSU. This article takes a fresh look at the underlying nature of entitlements under WTO law and their respective protection before proceeding to a review of the existing avenues for both intra- and extra-contractual flexibility under the WTO legal framework. It also explains why economic efficiency should properly be viewed as being a merely subsidiary factor under the current design of the WTO’s dispute settlement mechanism and elaborates what this implies. This review supports the conclusion that the WTO legal framework provides WTO Members with a balanced compromise between legal security and flexibility, with reputational concerns acting as the key incentive towards compliance. It is this compromise between legal security and flexibility which ensures that sovereign states remain willing to give up large parts of their freedom of action in trade matters by adhering to the WTO in the first place, and participate in future rounds of trade liberalization. In light of the analysis provided in this article, any calls for equipping the WTO’s dispute settlement mechanism with tougher sanctions appear misguided.

In 2008 and 2009, customs officials in the European Union, alleging patent infringement detained and seized generic medicines in transit from India to Brazil. The two countries requested consultations through the World Trade Organization’s Dispute Settlement Understanding based on alleged violations of the Agreement on Trade-Related Aspects of International Property Rights and other international agreements. These disputes are different from all prior ones—they are premised upon the claim that the EU violated the TRIPS agreement through the use of its border measures that went beyond the TRIPS minimum standards, rather than claiming that the other country did not meet those minimum obligations. They also show how developed countries seek to enact such intellectual property standards outside the WTO and limit global access to medicines. This note examines how developing countries can use the DSU to challenge these restrictions, and pursue policies that promote global access to medicines.