General Issue
Vol. IX, No. 2
(Winter '17)

70th Anniversary of the GATT

Roy Santana

30 October 1947 marks the 70th anniversary of the conclusion of the negotiations for a “General Agreement on Tariffs and Trade” which became the cornerstone of the multilateral trading system and “provisionally” governed international trade for almost 50 years.Considered the largest trade negotiation of its time, the negotiations were concluded in little over six months thanks to a series of innovative approaches, bold decisions, and a colossal effort by those involved.Surprisingly, not much has been written on the manner in which these negotiations took place, the political events that shaped them, nor the personalities involved, all of which have remained largely ignored by the specialised text books. Based on primary sources and prior work of historians, this paper describes the overall political environment and major political events that shaped the negotiations, as well as the hard political decisions that had to be taken in order to close the deal. Emphasis is placed on the clash between the United States and the United Kingdom concerning the elimination of British Imperial Preferences. The paper also describes the legal and practical hurdles that negotiators had to overcome in order to provisionally apply the GATT, including determining the type of legal instrument that would be used and who could sign it.

Trans-Pacific Partnership Agreement: A Commentary on Developing/Developed Country Divide and Social Considerations

Yong-Shik Lee

The Trans-Pacific Partnership Agreement or “the TPP” is one of the largest Regional Trade Agreements (RTAs) signed by eleven countries in the Asia- Pacific region. It is unique in the composition of its membership; half of its membership is comprised of developing countries, and the other half, developed countries, which is unusual for large-scaled RTAs such as the TPP. This diverse composition creates an inevitable developed/developing country divide in the TPP with respect to the effect of its terms on the trade and development interests of the participating countries. Building on the author’s previous works, this article discusses the impact of several key TPP provisions along this developing/developed country divide, provides a commentary on the gains and trade-offs for developing countries, and proposes ways to achieve a balance between the interests of developing and developed-country members. The TPP also has social implications for its member states, which has caused the President of the United States, Donald Trump, elected by support of the working class who perceived the existing trade agreements as a threat to their economic positions, to withdraw the United States from the TPP. This article also examines these social issues.

Sustainable Development and the Commodities Challenge: The Eventual ‘Greening’ of the World Trade Organization?

Gregory Messenger

Comprehensive and concerted action by the international community is required to achieve the Sustainable Development Goals (SDGs) set out in the United Nation’s 2030 Agenda. Yet, the 2030 Agenda is largely silent on a number of key issues of relevance to international regulation, most notably the impact of commodities on sustainable development. This article identifies the central role that trade in commodities plays in sustainable development while outlining the inherent tensions within the fragmented international regulation of commodities’ trade. This article looks at the World Trade Organization (WTO) as a site of innovative global governance in tackling the impact of one commodity–fish–examining how the international community and the WTO have been shifting the narrative in meeting the SDGs from one of overlapping or conflicting regimes to cooperative governance.

The 'Politicization' of the EU Development Policy

Peter Hilpold

The European Union (EU) and its Member States (MS) have a long tradition in development cooperation. They have largely shaped international development cooperation as we know it today. Development cooperation has always (also) been a “political” instrument, but in the last few years the “politicization” of development cooperation has gained enormous momentum. This article explains that this “politicization” means the strengthening of value orientation, particularly in the sense that development cooperation is also an instrument to reinforce the respect for human rights, basic democratic principles, the rule of law and broader societal needs such as environmental protection. This does not mean that development as such is to be attributed a secondary role or that it is instrumental with respect to the other values or goals mentioned. It is rather the case that a proper definition of development must integrate all these values and goals as otherwise it will not be effective. A holistic vision is required. It will be shown that the EU had to go a long way to come to these conclusions and that they have been achieved by intense dialogue with international institutions, in particular within the realm of the United Nations.

Re-Assessing Mineral Export Restraints as Industrial Policy Instruments: What Role, if Any, for the WTO Subsidy Law?

Ilaria Espa

This article takes stock of the legacy of some new generation WTO disputes relating to trade and environment, specifically with a view to explore whether and, if so, to what extent export restrictions could be effectively dealt with under the WTO Agreement on Subsidies and Countervailing Measures (ASCM) when used as industrial policy measures. The article discusses the cases where such restrictions subsidise industries that utilise raw materials of mineral origin and operate in the renewable energy sector. After discussing the shortcomings of WTO disciplines on export restrictions (which emerged after the China – Raw Materials and China – Rare Earths cases), the article reviews economic and legal arguments in favour of treating export restrictions, more generally, and mineral export restraints, more specifically, under the ASCM. It argues that at least under certain conditions the ASCM may be better placed from a regulatory point of view to govern trade instruments of an industrial nature that de facto operate as subsidies, such as export restrictions, especially in light of the inconsistencies of current WTO rules on export duties. It discusses whether the approach espoused by the Appellate Body in Canada – Renewable Energy may grant any flexibility to “green” industrial policy instruments and questions whether mineral export restraints may directly benefit from the partial carve-out built in by the WTO adjudicators.

Political Economy of Climate, Trade and Solar Energy in India

Vyoma Jha

The Jawaharlal Nehru National Solar Mission (NSM) is one of India’s flagships programs to drive efforts on climate change mitigation and has been the subject of a long-standing trade dispute with the United States (US) at the World Trade Organisation (WTO). The dispute arose over India’s use of local content requirements (LCRs) – a policy measure that typically mandates a certain percentage of goods used in the production process to be sourced locally – within the NSM. In the backdrop of India’s target to increase solar power capacity to 100 gigawatts (GW) by 2022, this paper presents a socio-legal perspective on whether and how dispute settlement in the WTO impacts India’s ambitious solar energy goals. Relying on the literature on fragmentation in international law and international political economy of energy, this paper applies a political economy lens on the solar trade dispute between India and explores: the political economy of LCRs within India’s solar policy; the main drivers and underlying politics of the solar trade dispute between India and the US; and the effect of the WTO ruling on regulatory governance of solar energy in India. To do this, the paper relies on a two-pronged qualitative research approach: first, a series of several semi-structured interviews with Indian public officials and relevant stakeholders; and second, an in-depth media discourse analysis of the coverage on the solar trade dispute in leading Indian news outlets with a view to supplement the normative claims emerging from the qualitative interview data.

Three Viewpoints on China’s Non- Market Economy Status

Ritwik Bhattacharya

On December 15, 2016, China requested for consultations with the United States and the European Union, regarding their continued use of special methodologies in the calculation of normal value, based on the Non-Market Economy [“NME”] status of China. Whether other countries are entitled to continue treating China as an NME depends on the interpretation of a sunset clause in China’s Accession Protocol [“AP”]. As the WTO gears up for a long-drawn dispute about China’s status, the author attempts to test the legal basis of China’s claim. After providing a brief background of the conditions under which China acceded to the WTO, the author examines the three viewpoints that have been adopted by commentators towards the question of China’s NME status. The “magic deadline viewpoint” argues that China will acquire a Market Economy Status [“MES”] automatically after 15 years of the AP coming into effect. The “business as usual viewpoint” posits that there is no change in China’s NME status. The “shifting the burden of proof viewpoint” argues that China does not acquire a MES automatically, but the burden of proving its continued NME status shifts to the importing country. The author finally concludes that the third viewpoint i.e. shifting the burden of proof offers the most persuasive interpretation of China’s AP, in consonance with the rules of treaty interpretation under the Vienna Convention on the Law of Treaties.

Renewable Energy and Article III: 8(a) of the GATT: Reassessing the Environment-Trade Conflict in Light of the ‘Next Generation’ Cases

Aditya Sarmah

Renewable energy has emerged as a popular way to balance environmental concerns with the duty of states to provide their citizens with access to electricity. states have attempted to improve their domestic capabilities in relation to the generation of renewable energy to achieve this. A popular method to attain this goal has been to allow foreign investment in the energy sector, but with an important caveat: that of a mandatory minimum requirement of local content. This “green industrial policy” often falls foul of countries’ trade obligations under the WTO regime and has led to states filing disputes challenging these measures before the WTO. This article seeks to highlight how these cases have been adjudicated. It will focus on how these cases are significantly different from the “classic cases” on trade and environment. The analytical emphasis of this article is on Article III:8(a) of the GATT 1994, how the WTO has adjudicated cases relating to this provision and how it ought to take the debate forward.