Kim: Power and the Governance of Global Trade: From the GATT to the WTO

Soo Yeon Kim (Univ. of Maryland - Government and Politics) has published Power and the Governance of Global Trade: From the GATT to the WTO (Cornell Univ. Press 2010). Here's the abstract:

In Power and the Governance of Global Trade, Soo Yeon Kim analyzes the design, evolution, and economic impact of the global trade regime, focusing on the power politics that prevailed in the regime and shaped its distributive impact on global trade. Using documents now available from the archives of the General Agreement on Tariffs and Trade (GATT), Kim examines the institutional origins and critical turning points in the evolution of the GATT, as well as preferences of the lesser powers of the developing world that were the subject of heated debate over the International Trade Organization (ITO), which failed to materialize. Using quantitative analysis, Kim assesses the impact of the global trade regime on international trade and finds that the rules of trade forged by the great powers resulted in a developmental divide, in which industrialized countries benefited from trade expansion but developing countries reaped far fewer gains. The findings indicate that a successful conclusion to the Doha Round of the World Trade Organization (WTO) is urgently needed to mitigate the developmental divide by increasing trade between the industrialized and developing worlds.

Kim offers a timely reading of the GATT/WTO system as a way to think about how trade and globalization more broadly may be governed in this post-Cold War century, as the global economy contends with a new geopolitical configuration featuring rising powers from the developing world. Important trading nations such as China, India, and other emergent actors in the G-20 countries, Kim argues, reflect the new power politics that will shape the course of global trade governance in the years to come.

Ortino: The GATT and its Challenges at 60

Federico Ortino (King's College London - Law) has posted The GATT and its Challenges at 60. Here's the abstract:

The importance of the General Agreement on Tariffs and Trade (GATT), concluded in Geneva on 30 October 1947, applied on a provisional basis from January 1948 until December 1994 and reincarnated since the establishment of the WTO in 1995 in the GATT 1994, cannot be overstated. As it functioned as the major international ‘agreement’ and ‘institution’ at the heart of the multilateral trading system, the GATT accomplished much of its original mandate: the substantial reduction of tariffs and other barriers to trade and the elimination of discriminatory treatment in international commerce.

Scholars have described the GATT 1994 as an ‘incomplete contract’ for at least three sets of reasons. First, the GATT 1994 directly binds only certain trade policies, leaving WTO Members significant discretion over domestic regulatory and fiscal policies with a potentially high trade impact. Second, the GATT 1994 employs vaguely worded provisions, leaving the determination of the actual meaning of the agreement subject to adjudication or to further treaty negotiations. Third, the GATT 1994 includes more or less explicitly an ambitious built-in agenda with regard to the liberalisation of Members’ trade policies, conditioning the success of this agenda to Members’ ability to reach a consensus in future negotiating rounds. In this sense, the GATT 1994 is no different from most other international treaties, which suffer from similar ‘birth defects’.

The present Chapter addresses a few selected key issues stemming out of the ‘incomplete’ character of the GATT 1994, and which remain controversial. The Chapter is structured in three parts, along the lines of Mavroidis’ subdivision of GATT 1994 disciplines: (i) disciplines on ‘trade instruments’ (measures affecting importation or exportation), (ii) disciplines on ‘domestic instruments’ (measures affecting production or consumption) and (iii) disciplines on ‘state contingencies’ (specific emergencies dealing, for example, with balance of payments, currency exchange and dumping). The Chapter advances that while the GATT has, so far, accomplished a lot in terms of establishing the key principles and approaches to the regulation of trade in goods, it has still further challenges to meet in its not-too-distant future.

Folsom: Bilateral Free Trade Agreements: A Critical Assessment and WTO Regulatory Reform Proposal

Ralph Folsom (Univ. of San Diego - Law) has posted Bilateral Free Trade Agreements: A Critical Assessment and WTO Regulatory Reform Proposal. Here's the abstract:

At this writing, most-favored-nation (MFN) principles notwithstanding, every nation save Mongolia has entered into at least one bilateral or regional free trade agreement. The European Union, for example, is so heavily engaged in bilateral deals that it has MFN trade relations with only seven countries. Hundreds of bilaterals have been negotiated since the early 1990s. The apparent failure of the Doha Round virtually guarantees their dominance of international trade law and policy. This article reviews the history of bilateral and regional free trade agreements ("bilaterals"), failed attempts at their regulation under the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO), and critically assesses the significance of their proliferation for international trade law and policy. Reform of WTO jurisdiction over bilaterals concentrated in the Dispute Settlement Understanding (DSU) is proposed. Specifically, abandonment of all WTO regulation except for a Revised Transparency Mechanism (text attached) operating in conjunction with expanded DSU opportunities is suggested. A word on nomenclature: This article utilizes the term "bilateral(s)" because it best characterizes the free trade agreements that are presently sweeping the seas. Generally in GATT/WTO parlance, "regional trade agreements" (RTA) has been and continues to be employed. Those words, in my opinion, are not the best descriptors of what is happening when, for example, China and Chile, Japan and Mexico, the United States and Oman, and the European Union and South Africa agree on free trade. A variety of factors help explain why bilaterals have become the leading edge of international trade law and policy. Difficulties encountered in the Uruguay, "Seattle" and Doha Rounds of multilateral trade negotiations are certainly crucial. GATT/WTO regulatory failures regarding bilaterals have also fueled this reality. Yet these "negatives" do not fully explain the feeding frenzy of bilaterals. A range of attractions to bilaterals are also at work. For example, bilaterals often extend to subject matters beyond WTO competence. Foreign investment law is a prime example, and many bilaterals serve as investment magnets. Government procurement, optional at the WTO level, is often included in bilaterals. Competition policy and labor and environmental matters absent from the WTO are sometimes covered in bilaterals. In addition, bilaterals can reach beyond the scope of existing WTO agreements. Services is one "WTO-plus" area where this is clearly true. Intellectual property rights are also being "WTO-plussed" in bilateral free trade agreements. Whether this amounts to competitive trade liberalization or competitive trade imperialism has been provocatively explored by Prof. Bhala. Further, bilaterals are politically and economically selective. In other words they avoid not only global most-favored-nation principles, but also domestically "sensitive" areas of national politics and economics. For example, Singapore's absence of farm exports helped make it an ideal U.S. and Japanese free trade partner. The micro-sized economy of Chile contributed to its attraction as a free trade partner with Mexico, China, the European Union, the United States and others. U.S. free trade deals with Jordan, Bahrain and Oman fit economically in a similar fashion, not to mention national security objectives. Like it or not, the "spaghetti-bowl" maze of bilaterals is driven by powerful negative and positive forces. It is not only the preferred trade medium of today, but very likely the future. Already more than half of world trade is conducted under bilaterals. While international trade lawyers may celebrate full employment, it bears remembering that bilaterals are discriminatory. They could render MFN the least favored status in world trade. Such an outcome would be especially harmful to the world's poorest nations, those with whom few WTO partners seek a bilateral agreement.

New Volumes in the Max Planck Commentaries on World Trade Law

A number of new volumes have been published recently in the Max Planck Commentaries on World Trade Law (Maritinus Nijhoff Publishers):

• WTO - Trade in Services, edited by Rüdiger Wolfrum, Peter-Tobias Stoll, & Clemens Feinäugle
• WTO - Trade in Goods, edited by Rüdiger Wolfrum, Peter-Tobias Stoll, & Holger P. Hestermeyer
• WTO - Trade Remedies, edited by Rüdiger Wolfrum, Peter-Tobias Stoll, & Michael Koebele

Irwin, Mavroidis, & Sykes: The Genesis of the GATT

Douglas A. Irwin (Dartmouth College - Economics), Petros C. Mavroidis (Columbia Univ. - Law), & Alan O. Sykes (Stanford Univ. - Law) have published The Genesis of the GATT (Cambridge Univ. Press 2008). Here's the abstract:

This book is part of a wider project that aims to propose a model GATT that makes good economic sense without undoing its current basic structure. It asks: What does the historical record indicate about the aims and objectives of the framers of the GATT? To what extent does the historical record provide support for one or more of the economic rationales for the GATT? The book supports that the two main framers of the GATT were the United Kingdom and the United States; developing countries’ influence was noticeable only after the mid-1950s. The framers understood the GATT as a pro-peace instrument; however, they were mindful of the costs of achieving such a far-reaching objective and were not willing to allocate them disproportionately. This may explain why their negotiations were based on reciprocal market access commitments so that the terms of trade were not unevenly distributed or affected through the GATT.