The Common Law of International
Trade and the Future of the World
Trade Organization
Thomas Cottier
CIGI Campus Auditorium, Waterloo Canada
February 3, 2016
6/22/2015
World Trade Institute Berne
1
6/22/2015
World Trade Institute Berne
2
Perceptions and Realities
• Doha Development
Agenda stalling with
minor results in December
2015 (Nairobi)
• Forum Shifting to PTA in
particular TTIP, TTP,
RCEP
• Multipolar World
• WTO and multilateralism
increasingly perceived
irrelevant
6/22/2015
• No major protectionism
during and after Financial
and Debt Crisis 2007-2014)
• New WTO Members (128 to
162)
• Central Role of WTO
Dispute Settlement (more
than 500 disputes registered
since 1995)
• WTO Law is the Foundation
of all modern RTAs
World Trade Institute Berne
3
The Common Law of
International Trade
• RTAs all structured on the basis of WTO law
disciplines
• Shared values and principles
• Core legal concepts of tariffs, QRs, non-discrimination
(national treatment) and exceptions
• Structure of agreements follow WTO law
• WTO-plus and sometimes WTO-minus
• Introduction of new areas (e.g. labour, environment,
competition, investment, TK protection)
6/22/2015
World Trade Institute Berne
4
Dialectical Relationship
• Multilateralism and Preferentialism mutually
supportive over time:
– 1883 and 1886 IPR Conventions (Paris and Berne)
based upon set of bilateral agreements
– GATT 1947 based upon US Reciprocal Trade
Agreements
– Preferential Trade in Services based upon 1995
GATS Agreement
– TTIP /TTP/RCEP: Future Multilateralization in
WTO to be expected (2020-2030)
6/22/2015
World Trade Institute Berne
5
A Comparative Approach
•
•
•
•
•
•
The experience of Roman Law and the Glossatores
The formation of the Common Law
The process of modern codification in Civil Law
Modern federalism
The evolution of EU Law
All depending on strong central legal institutions,
scholarship and civil society support
6/22/2015
World Trade Institute Berne
6
PTA Institutions
• With the exception of the European Union,
CU and PTAs show weak institutional
frameworks
• Lack of central bodies and secretariats
• Lack of dispute settlement experience and
experienced infrastructure
• Mainly model of ad hoc arbitration (e.g.
TTP chapter 28)
6/22/2015
World Trade Institute Berne
7
Splendid Isolation
• PTAs not well connected and concerted
• Jurisdiction limited to specific agreement,
subject to Article 31 VCLT interpretation
• Conflicting rules create difficulties for
regulating “behind the border issues”
• For example: GI protection in Canada in the
quadrangle of TRIPs, NAFTA, CETA and
TTP)
6/22/2015
World Trade Institute Berne
8
Towards a World Trade Court
• From Fragmentation to Coherence
– Art. 3.2 DSU and the status of non-WTO law in
dispute settlement
– Potential of Article 25 DSU (Arbitration)
– Expanding the jurisdiction of the WTO to
Preferential Trade Agreements
– Institutional implications and cost structures
6/22/2015
World Trade Institute Berne
9
Monitoring Existing Agreements
in the WTO
• The evolution of the common law of international
trade calls for stronger institutions beyond dispute
settlement:
• Proactive role of the WTO Secretariat in monitoring
existing agreements
– TPRM
– Dispute Settlement: A voice for the Secretariat and
enhanced transparency
– Guardian of the system: right to lodge consultations and
complaints against failing members
6/22/2015
World Trade Institute Berne
10
Future Negotiations
• Due to decline of traditional MFN, market access
negotiations will continue to take place in preferential fora
and settings
• Negotiations on non-tariff barriers depend upon market
size and spill-over effects
• CETA, TTP, TTIP
• Preferential negotiations excluded areas which would
deploy free rider effects (e.g. disciplines on domestic
support)
6/22/2015
World Trade Institute Berne
11
Unique Selling Propositions
• WTO member need to focus on USPs of multilateralism
and related Organisations:
– Multilateral Know-how and expertise of the WTO
– Trade Community in Geneva and NGOs
– Areas with MFN and strong spill-over effects:
• Conditions of competition (subsidies, IPRs,
competition policy)
• Technical regulations, food standards, domestic
regulation of services
6/22/2015
World Trade Institute Berne
12
Farewell to Trade Rounds
• With market access (tariffs, QRs) and services dealt
with mainly preferentially, the rationale for trade
rounds no longer exist
• Instead: Sectorial negotiations and on-going quasi
legislative processes (building upon past
experience: Financial Services, Telecom, GPA,
Access to Essential Drugs)
• Integrated approach covering goods, services,
investment, competition, government procurement
(e.g. climate change mitigation and adaption)
6/22/2015
World Trade Institute Berne
13
Potential Sectors
• Energy:
– Agreement on Electricity
– Agreement on Fossil Fuels
• Agreement on Extracted Minerals
• Agreement on Specific Services, e.g:
– Civil Aviation (Airlines)
– Maritime Transports
– Disciplines on Economic Migration beyond GATS
• Need to develop close working relationship with
specialised international organizations
6/22/2015
World Trade Institute Berne
14
Horizontal Issues
• Trade Remedies for goods and services
(unfair competition approach) for dumping
and subsidization
• Trade and Investment
• Trade and Competition Policy (Anti-trust)
• Institutional issues: role of secretariat,
extending jurisdiction to RTAs, cooperation
with other IOs
6/22/2015
World Trade Institute Berne
15
Modifying Consensus Diplomacy
• The shift to PTAs is partly caused by rigidity
within WTO talks
• Return to WTO talks requires more flexible
attitudes
• Diplomacy should adopt consensus-minus as
established under DSU and/or weighted voting
• Formally blocking consensus should be subject
to vital interests, reasoned statements and need
to confirmation upon cooling-off
6/22/2015
World Trade Institute Berne
16
Conclusions
• Integrated approach to trade regulation:
towards a common law and the role of
academic research and teaching
• Need to strengthen central institutions, in
particular WTO monitoring and dispute
settlement: extending jurisdiction to RTAs
• Sectorial negotiations
• Qualified consensus
6/22/2015
World Trade Institute Berne
17
Thank you for your attention
thomas.cottier@wti.org
18 Journal of International Economic Law 320 (2015)
6/22/2015
World Trade Institute Berne
18