Abstract
The multilateral trading system is faltering. The WTO’s leadership is at its lowest point. There is no visible sign that this global hemorrhage will cease any time soon. This is not just about a surge of global protectionism. It is a serious blow to rule of law and global governance. For instance, demise of the multilateral trading system may delay, frustrate or even derail efforts to establish a multilateral system under rule of law in other sectors of the international community. Consider recent initiatives in the international investment sector. Discussions to pursue global competition regulation may become ever more elusive. New norms to cover artificial intelligence and digital economy may be another victim, all having seen the fall of a once-dominant global multilateral regime on trade. In a sense, global rule of law may fade and lose its relevance gradually. The WTO and its Members should be aware that what is at stake is not simply trade liberalization. It is the 73-year accumulation of global efforts to establish a truly multilateral system. The global trade regime with its multilateral structure is a vital asset of the global community. What is in danger is not merely goods or services trade—it is rather global governance based on rule of law.
Professor of Law at School of Law, Seoul National University in Seoul, Korea.
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Lei (2017).
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For example, in 2015, the EU proposed to reform international investment agreements and investor-state dispute settlement proceedings (ISDS proceedings). Cf. European Commission (2015) Commission Proposes New Investment Court System for TTIP and Other EU Trade and Investment Negotiations. Press Release, 16 September 2015, http://trade.ec.europa.eu/doclib/press/index.cfm?id=1364. Woods (2019).
- 6.
Sornarajah (2016).
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UNGA Future Work in the Field of Dispute Settlement: Reforms of Investor-State Dispute Settlement (ISDS). UN Doc. A/CN.9/917 (20 April 2017), https://documents-dds-ny.un.org/doc/UNDOC/GEN/V17/023/69/PDF/V1702369.pdf?OpenElement. paras 63–66; Leventhal AG (2018) The 2018 Proposals for Amendments of the ICSID Rules: ICSIC Enters the Era of Trump, Populism, and State Sovereignty Am S In L 22(15)The UNCITRAL’s Working Group III completed its most recent discussion in October 2019. Cf. UN Information Service (2019) Successful conclusion of the UNCITRAL meeting in Vienna on the reform of investor-State dispute settlement (ISDS). UNIS/L/285 (21 October 2019), http://www.unis.unvienna.org/unis/en/pressrels/2019/unisl285.html.
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United Nations Conference on Trade and Development (2017), p. 6.
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Howard (2018), pp. 15–43.
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Yannaca-Small C (2006) Improving the System of Investor-State Dispute Settlement: An Overview, OECD Working Papers on International Investment No. 2006/1 https://www.oecd.org/investment/internationalinvestmentagreements/40079647.pdf. pp. 185–186.
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Pauwelyn (2014), p. 378. Pauwelyn stated “first, unlike, for example, UN, WTO or EU law, FIL is not organized around a single multilateral treaty or central international organization. Instead, FIL is heavily decentralized and composed of a multitude of bilateral, regional and multilateral treaties (BITs, North American Free Trade Agreement (NAFTA), FTAs, the European Energy Charter Treaty (ECT) etc.) … and a diversity of arbitral institutions … and domestic courts and investment agencies, without central authority.”
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Zang (2018), pp. 33–61.
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Bown CP (2016) Mega-Regional Trade Agreements and the Future of the WTO. Council on Foreign Relations Part of Discussion Paper Series on Global and Regional Governance, 26 September 2016, https://www.cfr.org/report/global-order-and-new-regionalism. p. 5: Bown stated “Unfortunately, while the WTO membership appears to increasingly recognize that some problems associated with RTAs will plague the multilateral system, the WTO has taken few concrete steps thus far to address the competition introduced by RTAs.”
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New Zealand Foreign Affairs & Trade, Comprehensive and Progressive Agreement for Trans-Pacific Partnership, https://www.mfat.govt.nz/en/trade/free-trade-agreements/agreements-under-negotiation/cptpp-2/.
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United States Trade Representative, United States-Mexico-Canada Agreement, https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement.
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Cf. Howard (2018), pp. 36–38.
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Wolff (2001), pp. 417–426.
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Bacchus (2018b).
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For instance, the EU’s proposal to reform the international investment system includes many aspects from the WTO system. Cf. European Commission (2016) Transatlantic Trade and Investment Partnership: Trade in Services, Investment and E-Commerce, Chapter II – Investment. Commission draft text TTIP – investment, 12 November 2016, http://trade.ec.europa.eu/doclib/docs/2015/september/tradoc_153807.pdf. Article 9(12) and 10(12).
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Cf. Bacchus J (2018) Might Unmakes Right – The American Assault on the Rule of Law in World Trade. CIJI Papers No. 173, May 2018, https://www.cigionline.org/sites/default/files/documents/Paper%20no.173.pdf. pp. 8–13.
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Malmström C (2015) Proposing and Investment Court System. Commission and Its Priorities Blog Post, 16 September 2015, https://ec.europa.eu/commission/2014-2019/malmstrom/blog/proposing-investment-court-system_en. The European Trade Commissioner, Ceclia Malmstrõm, proposed that the EU takes on the leadership of developing a more concrete system: “What has clearly come out of the debate is that the old, traditional form of dispute resolution suffers from a fundamental lack of trust. However, EU investors are the most frequent users of the existing model, which individual EU countries have developed over time. This means that Europe must take the responsibility to reform and modernise it. We must take the global lead on the path to reform.”
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Brown and Kolb (2018).
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Durusoy et al. (2015), pp. 57–68.
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Zhan (2017), p. xii. Zhan stated “Old treaties abound: more than 2,500 IIAs (International Investment Agreements) in force today (95 per cent of all treaties in force) were concluded before 2010. Old treaties “bite”: as of end-2016, virtually all known ISDS cases were based on those treaties. And old treaties perpetuate inconsistencies: their continued existence creates overlaps and fragmentation in treaty relationships and poses interaction challenges.”
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Bacchus (2018b), p. 10. Bacchus stated “Absent progress within the WTO system, the alternatives are more bilateral, regional, and mega-agreements on trade made outside the sheltering legal framework of the WTO among the more ambitious members. Already, hundreds of trade agreements have been concluded outside the WTO—the vast majority of them since the start of the deadlock in the Doha Development Round.”
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Baldwin (2016), p. 95; Winters LA (2015) The WTO and Regional Trading Agreements: Is it all for Multilateralism? EUI Working Papers No. 94, 23 December 2015, https://cadmus.eui.eu/bitstream/handle/1814/38266/RSCAS_2015_94.pdf?sequence=1&isAllowed=y.
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Brewster (2019), pp. 61–66.
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Ahmed et al. (2016), p. 657.
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Menon V (2019), 74th UNGA Debate: Nationalism or Multilateralism? RSIS Commentary No. 217, 30 October 2019, https://dr.ntu.edu.sg/bitstream/10356/136617/2/CO19217.pdf.
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Tocci (2018), p. 1.
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Linn (2018), pp. 86–113.
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Haley JA (2017) How the WTO Can Stand Up to Nationalism. CIGI Articles, 14 December 2017, https://www.cigionline.org/articles/how-wto-can-stand-nationalism.
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Hoekman B, Bluth C, Esche A (2018) Revitalizing Multilateral Governance at the World Trade Organization/ Council for Global Problem-Solving, October 2018, https://www.cgp-council.org/wp-content/uploads/2018/10/Revitalizing-Multilateral-Governance-at-the-World-Trade-Organization.pdf.
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Beverelli C, Neumüller S, The R (2015) Export Diversification Effects of the WTO Trade Facilitation Agreement”, FIW Working Paper No. 137, https://www.econstor.eu/bitstream/10419/121140/1/N_137.pdf.; International Centre for Trade and Sustainable Development (2017) WTO’s Trade Facilitation Agreement Takes Effect. Bridges, 23 February 2017, http://www.ictsd.org/bridges-news/bridges/news/wtos-trade-facilitation-agreement-takes-effect.
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Lu (2015), p. 83.
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Ghosh (2010), pp. 419–455; Francois JF (1999) Maximizing the Benefits of the Trade Policy Review Mechanism for Developing Countries: prepared for the World Bank Institute, February 1999, http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.202.3877&rep=rep1&type=pdf.
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Francois (2002), p. 312.
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Meagher N (2018) Representing Developing Countries before the WTO: the Role of the Advisory Centre on WTO Law (ACWL) (May 2015) Robert Schuman Centre for Advanced Studies Research Paper No. RSCAS PP2015/02; Bown and McCulloch (2010), pp. 58–59.
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Nottage H (2009) Developing Countries in the WTO Dispute Settlement System. GEG Working Paper No. 2009/47, January 2009, https://www.econstor.eu/bitstream/10419/196308/1/GEG-WP-047.pdf. Rockfall Lekgowe G (2012) The WTO Dispute Settlement System: Why it doesn’t Work for Developing Countries? 24 April 2012, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2045470.
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Wolff (2001), McRae (2004), pp. 4–5; Garrett G, Smith JM (2002), The Politics of WTO Dispute Settlement UCLA Occasional Paper Series, 31 July 2012, https://escholarship.org/content/qt4t4952d7/qt4t4952d7.pdf.
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Johannesson (2018).
- 46.
White & Case LLP (2014).
- 47.
Hudec (2000), p. 345.
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Torres RA (2012) Use of the WTO Trade Dispute Settlement Mechanism by the Latin American Countries – Dispelling Myths and Breaking Down Barriers. Staff Working Paper ERSD-2012-03, February 2012, https://www.wto.org/english/res_e/reser_e/ersd201203_e.pdf., pp. 14–16; Wolff (2001), p. 423.
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World Trade Organization, Understanding on Rules and Procedures Governing the Settlement of Disputes, https://www.wto.org/english/docs_e/legal_e/28-dsu_e.htm. Article 5.
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Ibid.
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Free Trade Agreement between the Republic of Korea, of the one part and the European Union and its Member States, of the other part (entered into force on 1 July 2011), Annex 14-A; Free Trade Agreement between the Government of the Republic of Korea and the Government of the People’s Republic of China (entered into force on 20 Dec 2015), Article 20.5, para 4.
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Lee, J. (2020). What Can We Learn from Our Struggling Cousin?: Recent Discussions on Reform of International Investment Law and Investment Dispute Settlement Proceedings. In: Lewis, M.K., Nakagawa, J., Neuwirth, R.J., Picker, C.B., Stoll, PT. (eds) A Post-WTO International Legal Order. Springer, Cham. https://doi.org/10.1007/978-3-030-45428-9_9
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