Just as it had in several recent similar disputes, the Panel in China–Autos found several of the challenged issues WTO-inconsistent. We believe virtually all of the deficiencies noted by the Panel could be easily addressed with minor changes to MOFCOM practices. The real significance of this dispute lies in what it tell us about the larger trade policy dance between the US and China. On the one hand, with the series of related WTO disputes the US has demonstrated that China must comply with WTO rules. The more vexing challenge, however, is the apparent tit-for-tat motivation for this and other recent Chinese trade policies, and on this point this dispute does little to change the calculus. The prospective nature of WTO relief makes it almost impossible for the WTO to discourage the type of opportunistic protectionist actions exemplified by this case.

Free trade agreements (FTAs) are about far more than free trade. They are about national security. A trade deal may be ambitious in liberalizing or managing cross-border flows in goods, services, intellectual property (IP), and people, but to argue for or against an FTA solely along the axis of free versus managed trade is to miss another vital purpose – the deal can, and indeed should, advance national security. This article makes two points. First, the Trans-Pacific Partnership (TPP) exemplifies the possibility of enhancing the national security the United States, through containment of China and its ruling Chinese Communist Party (CCP). Second, the debate over the definition of state owned enterprise (SOE) is one among many illustrations in the TPP of the link between national security, trade, and containment. The 12 nations negotiating the TPP were aware of this link, and deliberated the definition of ‘SOE’. The TPP excluded the Middle Kingdom from the founding members, while the founders wrote the TPP rules to bind China if it subsequently joined the deal. Chinese SOEs were of concern to them, for bona fide national security reasons, and so also were legitimate sovereign interests in providing goods and services through their own SOEs. The evaluation by America and its 11 TPP partners, as to which entities should be included in the scope of SOE disciplines led to a set of clear rules.

The EC–Seal Products dispute raises fundamental questions about the relationship between public morals and international trade. Can WTO members impose trade restrictions based on moral or ethical concerns? Under what conditions can these concerns trump existing trade liberalization commitments? The dispute was filed in 2009 by Canada and Norway against the EU, which in the same year had banned seal products from being imported and placed on its market. According to the EU, the policy was introduced in response to European moral outrage at the inhumane killing of seals. The EU seal regime included a series of exceptions. In particular, it allowed imports of seal products hunted by Inuit or other indigenous communities, as well as imports of seal products processed and re-exported by EU producers. This article discusses the Appellate Body's ruling in EC–Seal Products and some of the key legal and economic issues raised by this dispute.

This paper examines the supply-side determinants of international trade in crops that are intensive in genetically modified organisms (GMOs). The theoretical framework is a variant of the Heckscher–Ohlin model, which we estimate using cross-country data for 1995 and 2010 to examine soybeans, maize, and cotton trade. The data include measures of country land endowments, which we disaggregate into GMO and non-GMO components, as well as recently released measures of GMO regulations. Findings show land endowments are a primary source of comparative advantage in GMO intensive industries before and after the advent of GMOs. Further, an increase in a country's allocation of land to GMO crops has a positive effect on her net exports in GMO intensive industries. This positive effect occurs both across countries and time. Finally, a country's GMO regulations have a negligible effect as a supply-side determinant of comparative advantage. However, a country's decision about whether to adopt GMO technologies does matter to trade. These findings are robust with respect to a variety of considerations.

The new WTO Trade Facilitation Agreement (TFA) is a significant step forward for the international trading regime, representing new hope for the relevance of the WTO.

The TFA is the first multilateral agreement since the creation of the WTO in 1995 and includes novel measures to help developing countries build capacity, while also taking into consideration regulatory concerns of WTO members through the application of the general GATT exceptions to the new agreement. While the TFA may appear narrow in scope, with regards to goods it is arguably the broadest WTO Agreement besides the GATT, since all goods that cross national borders find themselves subject to trade facilitation measures. If the TFA is properly interpreted, the combination of capacity-building measures, a focus on technological improvements and the judicious invocation of Article XX could result in a win-win situation wherein routine positive trade is streamlined, reducing time required to cross borders, while negative trade is more easily controlled and regulated at the border.

Despite regulatory questions concerning implementation, it is likely that the TFA will reduce the cost of trading across borders, while improving trade for developing countries and allowing WTO members to better control trade flows, through a combination of procedural streamlining and regulatory discretion.

The controversial gambling decision of the Appellate Body is mostly important because of examination of the nature of Access under Article XVI GATS, the relationship of that Article to Articles XIV and XVII GATS, and the parallels with Articles III, XI, and XX GATT. Notably, the Appellate Body took the position that an apparant internal regulatory measure, which, nonetheless, had equivalent effect to a zero quota, violated Article XVI GATS. A similar measure in the area of goods would have been examined under Article III GATT and require a showing of discrimination. The facts of the case would have allowed the decision to be based on Article XVII GATS. Most of this paper deals with this issue. We agree with this interpretation of Article XVI by the Appellate Body but are critical of its hermeneutics, suffering from a textual fetish and a policy phobia. Some other elements in the decision are also examined critically.

This paper addresses the dispute brought to the World Trade Organization (WTO) by Argentina concerning certain Chilean measures affecting the importation of wheat, wheat flour, oil seeds, edible vegetable oils and sugar. The complaint by Argentina challenged two types of policies – a ‘price band system’ that was applicable to four of those product categories, and safeguard measures that were applicable to three of them. The WTO panel ruled in favor of Argentina on both sets of measures. It found that the price band system violated Article IV of the Agriculture Agreement and Article II of GATT 1994. The safeguard measures, according to the panel, violated various provisions of the Safeguards Agreement, as well as Article XIX of GATT 1994. Chile elected not to appeal the panel ruling regarding the safeguard measures, but did appeal the adverse finding as to the price band system. The Appellate Body subsequently affirmed in substantial part the finding that the price band system violated Article 4 of the Agriculture Agreement, but reversed the finding of a violation under Article II of GATT 1994. Chile has since indicated an intention to comply with the ruling, and an arbitration pursuant to Article 21.3 of the DSU determined that the reasonable period of time for compliance would expire on December 23, 2003.

Since its creation, the GATT/WTO has experienced a vast number of changes, from being a small agreement with 23 contracting parties to becoming an international organization with 151 Members; from negotiations on a limited number of tariff reductions and general rules to embracing wider and more sensitive areas, such as agriculture, services, intellectual property and environment; and from a main-trading-powers' leadership to a wider participation and more balanced reflection of interests from both developed and developing countries alike. This article attempts to demonstrate the pragmatism of coalitions, as well as both the costs and benefits of creating or joining them in the current framework of negotiations in the Doha Round.

The European Union (EU) has been using economic sanctions both as a foreign policy tool and as a liberal alternative to military action. Since 2006, it has been implementing general sanctions against the whole economy of Iran, affecting their trade relations, and since 2007, following the imposition of sanctions by the UN Security Council, it has also been using smart sanctions targeting Iranian entities and natural persons associated with the country's military activities. In a nonlinear autoregressive distributed lag (NARDL) model, this paper investigates the impact of general and targeted EU sanctions against Iran on quarterly bilateral trade values between the 19 members of the euro area (EA19) and Iran between the first quarter of 1999 and the fourth quarter of 2018. In a robustness NARDL specification, trade between Iran and the 28 members of the EU is analysed. In addition, a gravity model of bilateral trade between Iran and the EU member states is run in a robustness check. The results indicate that the EU's general sanctions have strongly hampered trade flows between the two trading partners in almost all sectors, except for the primary sectors. Furthermore, our study finds that the impact of smart sanctions targeting Iranian entities and natural persons is much smaller than the impact of general sanctions on total trade values and the trade values of many sectors. Smart sanctions affect the exports of most sectors from the EA19 and the EU28 to Iran, while they are statistically insignificant for the imports of many sectors from Iran. Thus, this paper provides evidence of the motivations behind smart sanctions, which target specific individuals and entities rather than the whole economy, unlike general sanctions, which have a negative impact on ordinary people.

In this paper, we examine the theoretical rationale for WTO rules on the special and differential treatment (SDT) of developing countries. We describe a model of bilateral trade between a small country and a large trading partner, in which the small country suffers from a domestic commitment problem in trade policy. This problem arises because investors in the import-competing sector lobby the government to enact and maintain protectionist policies. We show that a reciprocal trade agreement, in which the large country lowers its tariffs conditionally on the small country doing the same, creates a ‘carrot and stick’ mechanisms that helps the small country to overcome its commitment problem. If capacity in the import-competing sector can only be reduced gradually, the agreement may need to allow the small country to delay the implementation of its trade liberalization commitments, in line with SDT provisions in the WTO. Our analysis suggests that, if reconciled with the principle of reciprocity, SDT can help developing countries to liberalize and improve their trading prospects.

Measuring trade barriers in services is complex due to all the non-tariff barriers that exist. In this paper we rely on quantity measures using gravity equation. In order to take into consideration the presence of zero flows in the database, we use a sample selection model. Then, we use the results of both stages of the model to derive tariff equivalents based on the distribution of the estimated residuals. Applying this methodology to the Eurostat database, we obtain tariff equivalents for a large number of countries and for 11 services sectors. Our main conclusions are that protection is not homogeneous among sectors for a country and that services openness is not directly linked with the level of development. Our results are robust to changes in specification, but we do find that OLS estimations overestimate the commercial openness of the countries with many zero flows.

European Union (EU) anti-dumping duties imposed on Chinese leather footwear imports led to a challenge before the WTO Dispute Settlement body. The Panel ruled that the EU's presumption that Chinese exporters are subject to economy-wide non-market-economy anti-dumping duties was inconsistent with WTO obligations. The EU declined to appeal this outcome and subsequently changed its anti-dumping regulation in response. This dispute also illustrates the rapidly changing structure of global manufacturing and how these changes can scramble the traditional political economy of import restrictions. In addition, the case highlights how EU members' positions on trade remedy actions can depend importantly on national production patterns and firms' responses to economic pressures from globalization and the further development of global supply chains.

We compute ad valorem equivalents (AVEs) for the regulation in three service sectors (i.e. fixed telecom, mobile telecom, distribution) applied by selected emerging countries. We start with qualitative information on the restrictions applied by each country in each sector; we apply a multivariate statistical approach to transform this qualitative data into a trade restrictiveness synthetic index (STRI). In a second stage, we estimate the average impact of STRI on price–cost margins. In the third stage, this impact is used to calculate the AVE of the STRI estimated in the first step. It is shown that the STRI has a significant effect on the price–cost margins of the individual firms only when controlled for Regional Trade Agreements and exception to the MFN clause in the considered sector. Lastly, we compute tariff equivalents for the STRIs previously calculated using the estimated impact. More than half our AVEs are larger than 50% and one AVE out of six is above 100%.

China's unique economic system poses increasing challenges to the world trading system and attracts growing academic and policy debate. WTO members have frequently resorted to antidumping measures in dealing with price distortions caused by the Chinese government's influence on the economy. The Appellate Body's decision in the recent EU–Biodiesel dispute starts to remove the flexibility of condemning state intervention and price distortions under the WTO Anti-Dumping Agreement through antidumping measures. This decision, read with the relevant WTO jurisprudence on the ‘ordinary course of trade’ test and subsidies, suggests that price distortions resulting from state intervention should be addressed under other WTO rules. Therefore, it is necessary for WTO members to shift their focus to, and explore the capacity of, the other rules to overcome the challenges arising from China's state capitalism.

WTO panels are often called upon to decide overlapping claims based on different WTO agreements. One such dispute was the EC–Asbestos case where claims were made under both GATT 1994 and the Agreement on Technical Barriers to Trade (TBT). This paper examines whether the Appellate Body's refusal in that case to examine Canada's TBT claims was justified. The conclusion reached is no, based on the principle jura novit curia, the general prohibition on non liquet and the WTO case law on judicial economy. In addition, the paper examines when two WTO norms must be seen as ‘in conflict’. It argues in favour of broadening the current definition of conflict and clarifies the consequences of a norm being lex specialis.

The present article examines what influence various domestic constituents exert on the negotiating positions member states adopt in WTO trade rounds based on a survey of national delegations to the WTO. The findings show that in both developed and developing countries, a broad array of governmental and non-governmental actors substantially shape trade policy-making. At the cost of those ministries traditionally in charge of trade policy-making, many domestic constituents have increased their influence since the conclusion of the Uruguay Round. This leads to a discussion of the problematic implications of these developments towards more participatory trade policy-making for WTO negotiations.

Can a WTO Member discriminate against foreign suppliers of services located in jurisdictions that refuse to share information with a government to permit it to determine if its nationals engage in tax evasion? Does it matter if the Member uses standards developed by an international body as the criterion for deciding whether to impose measures? In Argentina–Financial Services, the WTO Appellate Body held that services from jurisdictions that share financial tax information may be different from services provided by jurisdictions that do not cooperate in supplying such information. It overruled a Panel finding that measures to increase taxes on financial transactions with non-cooperative jurisdictions were discriminatory. We argue that the AB reached the right conclusion on the basis of the wrong arguments; that it missed an important opportunity to clarify what WTO Members are permitted to do to enforce their domestic regulatory regimes; and increased the scope for confusion and future litigation by considering that the likeness of services and service suppliers may be a function of prevailing domestic regulatory regimes.

CHARNOVITZ: The Appellate Body's decision in the Tariff Preferences case demonstrates the value of a second-level review of panel decisions. Notwithstanding the composition of the panel – which was as highly qualified, balanced, and diverse as any panel could possibly be – the panel issued a decision that met widespread disapproval. In what is probably a record for third-party support of the plaintiff, eight countries asked the Appellate Body to reverse key points. Happily, the Appellate Body did reverse many of the troubling holdings in the panel report. Unhappily for the world community, the Appellate Body did not have an opportunity to review the panel's interpretation of GATT Article XX, which (like many previous panels) has chiseled away at vital exceptions.

The success of existing GATT/WTO safeguard or flexibility provisions to sustain long-run liberalization stems from their procedural criteria (e.g., transparent and participatory decisions to impose new import restrictions) overcoming their suspect economic criteria (e.g., injury). The proposed SSM includes no procedural and minimal notification requirements. It would expand by arithmetic formulas the bounds within which a Member might unilaterally impose new import restrictions. Simulations indicate that the formulas provide a poor guide for policy – they would (a) allow an import restriction more often in situations when it is not beneficial than when it is, and (b) in situations in which an import restriction would help, they more often ban it than allow it. If procedural requirements are out – i.e., developing Members insist on a ‘usable’ safeguard – then the simple rule ‘bound rates may be exceeded for a maximum of [x] tariff lines at any one time’ is better economics than the proposed price and volume triggers. (No economic criteria are better than bad economic criteria.) Each Member would have the flexibility to change its lists of Special Products and Sensitive Products, there being a limit on the numbers of products on the lists at any one time.

In 2009, the United States imposed additional tariffs for a three-year period on imports of automotive tires from China under a special-safeguard provision included in China's Protocol of Accession to the WTO. China challenged the measure in the WTO. The case marked the first WTO dispute in which a challenged safeguard was upheld by the Appellate Body; the first in which an accession protocol was used successfully as a defense; and the first that China lost as a complaining party. It also was noteworthy in that the safeguard was sought by a labor union, not the domestic industry. This paper reviews the WTO Appellate Body's findings and discusses a number of the legal and policy implications regarding China's Accession Protocol, the Safeguards Agreement, and WTO accession law, as well as economic aspects of the case.