Course Notes International Trade and Investment Law
Class 1
Questions
- What is the role of the WTO in international trade?
- What is the historical background and economic rationale of the WTO and the WTO Agreements?
- What is the organisational structure of the WTO?
Reading
- Mavroidis, pp. 1-54
Cases
- Appellate Body Report, US – Gasoline
LECTURE NOTES
- Social dilemmas - protectionism a considerer choice
- Increasing market access, but -
- Distributional dilemma
- Value dilemma
- State goals dilemma
- Choices for individuals
- As consumer
- As worker
- As member of economic class
- As resident of community
- As citizen
- Personal values
- Changing shape of global trade
- 1992 - e.g. north america - asia, north america - EU significant trade
- 2014 - world trade more multidimensional e.g.:
- Developed and developing europe - important trade
- North america - trade flows more dispersed
- World trade remains highly concentrated
- Small group of ‘connected’ countries dominate world trade
- China and India - biggest world economies by 2050
- One belt one road (OBOR) initiative
, - Chinese plan to dominate world trade
- Infrastructure to reach critical markets
- WTO Economic Rationale
- Economic theory is the basis for WTO law
- Comparative/absolute advantage
- Protectionism/special interest groups
- Terms of trade/prisoner’s dilemma
- (nuanced by Blanchard)
- Embedded liberalism?
- The Advent of GATT (General Agreement of Tariffs and Trade) 1947
- Bretton Woods Institutions 1944
- International Monetary Fund
- International Bank for Reconstruction and Development (now the World Bank)
- And what about beggar-thy-neighbour policies?
→ ITO/Havana Charter
- Prep Conference London 1946, New York 1947, Geneva 1947
- GATT 47 was conceived as an interim Agreement, pending entry into force ofITO, no status
of international organization
- Entry into force only by means of Provisional Protocol of Application (PPA), later Protocols of
Accession
- WTO goals
- Raising standards of living
- Ensuring full employment, growing volume of real income and demand, and increasing
production
- Allowing for sustainable development
- Function
- Facilitative function: facilitates the negotiation and conclusion of commercial agreements
- Constraint function: spurs compliance and policies or restraint by Members with an evolving
code of trade conduct
- Diffusion of influence function: offers to smaller Members a first-rate opportunity to
influence, depending on their bargaining power, the regulation of international trade
- Promotion of interaction function: promotes trade growth, diminishing at the same time the
inherent systematic uncertainty through the development of a system for resolving and
avoiding trade disputes
- WTO structure
- 3 basic components
- Members
- Secretariat
, - Judiciary with standing appellate body
- Powers unevenly distributed (member-driven organisation)
- WTO members
- Members compose the main Legislative, Executive, and Judicial Bodies
- 4 Roles of Members
- Ministerial Conference
- General Council
- Dispute Settlement Body
- Trade Policy Review Body
- Secretariat
- Headed by General Director
- Chosen by Ministerial Conference
- Term determined by MC
- Chooses Secretariat staff
- Staffed by International Civil Servants
- Loyalty is with Organization, not with home country
- Oversees administrative functioning of WTO
- Possesses “Organizational Memory”
- Assists dispute settlement panels
- Membership
- 2 types of WTO membership → Articles XI and XII WTOA
- Original Membership (Art. XI)
- Membership through accession (Art. XII)
- Membership gained but not automatic
- 2 aspects
- Fulfilling criteria of membership
- Completing process of accession
- Membership not limited to ‘States’
- “States Plus” (EU)
- “States Minus” (Hong Kong, Taiwan)
- Decision making
- By 3 agents
- Ministerial conference
- General council
- Dispute settlement body
- Typically by consensus even if the WTOA provides otherwise
- Voting Procedures
- One Member, One Vote with the exception of EC
- EC - as many votes as Member States in WTO
, - The DOHA Round
- Ministerial Conferences Seattle (1999) fails
- Ministerial Conference Doha (Qatar) December 2001: Launch of DDA
- Ministerial Conference Cancun (2003) fails
- Ministerial Conference Hong-Kong (2005)
- July Packages (2006 and 2008)
- 2 Geneva MCs
- Room for optimism? The Bali package and the plurilaterals (multinational legal or trade
agreement between countries)
- The trade facilitation agreement (2017) and the Nairobi package
- The Buenos Aires MC
- The e-commerce launch of negotiations in Davos (2019)
- The 16-member interim appeal mechanism (Davos 2020)
- Pledge for reform in the MC Outcome Document (2022)
- New agreements on fisheries subsidies (2022), on investment facilitation (2024)
- Contemporary problems
- Little interest in additional market access after Uruguay Round (Agriculture, NAMA,
Services)
- Single undertaking backfired: deadlock in one area led to comprehensive failure
- Remaining relevant!
- Recovery after a pandemic
- Addressing food security amidst a war
- The boundaries of securitization of economic policy (geoeconomics)
- WTO dispute settlement reform
- PTAs continue to grow
- CPTPP
- Japan-EU
- CETA
- RCE
- Status of Private Sector and NGOs
- Main beneficiaries of WTO rules and commitments are consumers and the private sector
(traders, companies)
- Non-Governmental Organizations
- Lobbying in trade negotiations
- Rights and obligations are derived
- Role in dispute settlement (amicus curiae; public hearings)
- Sources of WTO law
- Authoritative (3.2 DSU)
- Texts of the Agreements
Class 1
Questions
- What is the role of the WTO in international trade?
- What is the historical background and economic rationale of the WTO and the WTO Agreements?
- What is the organisational structure of the WTO?
Reading
- Mavroidis, pp. 1-54
Cases
- Appellate Body Report, US – Gasoline
LECTURE NOTES
- Social dilemmas - protectionism a considerer choice
- Increasing market access, but -
- Distributional dilemma
- Value dilemma
- State goals dilemma
- Choices for individuals
- As consumer
- As worker
- As member of economic class
- As resident of community
- As citizen
- Personal values
- Changing shape of global trade
- 1992 - e.g. north america - asia, north america - EU significant trade
- 2014 - world trade more multidimensional e.g.:
- Developed and developing europe - important trade
- North america - trade flows more dispersed
- World trade remains highly concentrated
- Small group of ‘connected’ countries dominate world trade
- China and India - biggest world economies by 2050
- One belt one road (OBOR) initiative
, - Chinese plan to dominate world trade
- Infrastructure to reach critical markets
- WTO Economic Rationale
- Economic theory is the basis for WTO law
- Comparative/absolute advantage
- Protectionism/special interest groups
- Terms of trade/prisoner’s dilemma
- (nuanced by Blanchard)
- Embedded liberalism?
- The Advent of GATT (General Agreement of Tariffs and Trade) 1947
- Bretton Woods Institutions 1944
- International Monetary Fund
- International Bank for Reconstruction and Development (now the World Bank)
- And what about beggar-thy-neighbour policies?
→ ITO/Havana Charter
- Prep Conference London 1946, New York 1947, Geneva 1947
- GATT 47 was conceived as an interim Agreement, pending entry into force ofITO, no status
of international organization
- Entry into force only by means of Provisional Protocol of Application (PPA), later Protocols of
Accession
- WTO goals
- Raising standards of living
- Ensuring full employment, growing volume of real income and demand, and increasing
production
- Allowing for sustainable development
- Function
- Facilitative function: facilitates the negotiation and conclusion of commercial agreements
- Constraint function: spurs compliance and policies or restraint by Members with an evolving
code of trade conduct
- Diffusion of influence function: offers to smaller Members a first-rate opportunity to
influence, depending on their bargaining power, the regulation of international trade
- Promotion of interaction function: promotes trade growth, diminishing at the same time the
inherent systematic uncertainty through the development of a system for resolving and
avoiding trade disputes
- WTO structure
- 3 basic components
- Members
- Secretariat
, - Judiciary with standing appellate body
- Powers unevenly distributed (member-driven organisation)
- WTO members
- Members compose the main Legislative, Executive, and Judicial Bodies
- 4 Roles of Members
- Ministerial Conference
- General Council
- Dispute Settlement Body
- Trade Policy Review Body
- Secretariat
- Headed by General Director
- Chosen by Ministerial Conference
- Term determined by MC
- Chooses Secretariat staff
- Staffed by International Civil Servants
- Loyalty is with Organization, not with home country
- Oversees administrative functioning of WTO
- Possesses “Organizational Memory”
- Assists dispute settlement panels
- Membership
- 2 types of WTO membership → Articles XI and XII WTOA
- Original Membership (Art. XI)
- Membership through accession (Art. XII)
- Membership gained but not automatic
- 2 aspects
- Fulfilling criteria of membership
- Completing process of accession
- Membership not limited to ‘States’
- “States Plus” (EU)
- “States Minus” (Hong Kong, Taiwan)
- Decision making
- By 3 agents
- Ministerial conference
- General council
- Dispute settlement body
- Typically by consensus even if the WTOA provides otherwise
- Voting Procedures
- One Member, One Vote with the exception of EC
- EC - as many votes as Member States in WTO
, - The DOHA Round
- Ministerial Conferences Seattle (1999) fails
- Ministerial Conference Doha (Qatar) December 2001: Launch of DDA
- Ministerial Conference Cancun (2003) fails
- Ministerial Conference Hong-Kong (2005)
- July Packages (2006 and 2008)
- 2 Geneva MCs
- Room for optimism? The Bali package and the plurilaterals (multinational legal or trade
agreement between countries)
- The trade facilitation agreement (2017) and the Nairobi package
- The Buenos Aires MC
- The e-commerce launch of negotiations in Davos (2019)
- The 16-member interim appeal mechanism (Davos 2020)
- Pledge for reform in the MC Outcome Document (2022)
- New agreements on fisheries subsidies (2022), on investment facilitation (2024)
- Contemporary problems
- Little interest in additional market access after Uruguay Round (Agriculture, NAMA,
Services)
- Single undertaking backfired: deadlock in one area led to comprehensive failure
- Remaining relevant!
- Recovery after a pandemic
- Addressing food security amidst a war
- The boundaries of securitization of economic policy (geoeconomics)
- WTO dispute settlement reform
- PTAs continue to grow
- CPTPP
- Japan-EU
- CETA
- RCE
- Status of Private Sector and NGOs
- Main beneficiaries of WTO rules and commitments are consumers and the private sector
(traders, companies)
- Non-Governmental Organizations
- Lobbying in trade negotiations
- Rights and obligations are derived
- Role in dispute settlement (amicus curiae; public hearings)
- Sources of WTO law
- Authoritative (3.2 DSU)
- Texts of the Agreements
