After three decades of companionship, investment protection rules and trade agreements are heading for a divorce. Investment chapters have been included in preferential trade and investment agreements (PTIAs) since the late 1980s, but they have recently come under fire. The U.S. administration considers privately enforceable investment protection obligations as an unwanted incentive to offshore American jobs, and the EU Commission seeks to omit them to benefit from the accelerated ratification process reserved for trade agreements that fall under exclusive EU competency. After decades of coexistence, investment protection rules and trade agreements are thus likely to go their separate ways. This chapter empirically evaluates the impact of their thirty-year companionship to assess the implications of their looming split. It finds that investment chapters remain little more than a bilateral investment treaty plugged into a trade agreement. PTIAs and self-standing investment treaties do not vary systematically in investment protection content, and the wider trade agreement context does little to affect the interpretation of investment rules in PTIAs. In spite of their coexistence in the same treaty, there is thus little evidence of cross-fertilization between trade and investment protection rules in PTIAs. This absence of normative convergence suggests that their looming split merely formalizes the continuous normative distinction between trade liberalization and investment protection.

The chapter focuses on the WTO’s current crisis, most visibly manifested in the forced vacancies on the Appellate Body and the foreseeable disappearance of what used to be described as the “jewel in the crown” of the WTO. Hahn is of the opinion that this crisis will only be ended, if the members can agree on a number of reform steps relating to the broader governance of the system. The author predicts that without those changes, the organization will wither away like a picture of Dorian Gray. Hahn describes the different issues that need to be addressed that range from privileging a multi-speed WTO, the status of developing countries, the intellectual property approach by China as well as changes in anti-dumping and anti-subsidy laws.

International migration is a relative newcomer on the “trade and” agenda and has hitherto received relatively little attention in trade and migration studies alike. The inclusion of labour migration as one essential mode of cross-border trade in services, so-called Mode 4 in the GATS, opened the agenda for more far-reaching developments at the level of regional and bilateral free-trade agreements . This chapter shows that this deepening of the trade-migration nexus is intricately linked to power shifts in the global economy and the rise of regionalism. For the international trade regime in 2025, this means that, in combination with the ongoing power transitions, the trade-related mobility agenda is likely to expand beyond what the former sponsors of the GATS agreement, the European Union (EU) and the United States, originally intended.

Skepticism on the benefits of free trade and globalization has been on the rise in several Western economies, which poses major challenges to firms in these countries. In this chapter, we first explore the roots and the multiple faces of this backlash. We then discuss what we can learn from existing literature on corporate political activity (CPA) in such a changing context, where anti-globalization sentiment and the threat of trade protectionism have become a political reality. We also present findings from our study on the responses of trade-dependent companies to rising protectionism in the European Union. A key finding is that there is a high level of consensus among EU trade associations that trade protectionism is a threat and, although individual companies have been passive so far, trade associations had a mandate to lobby against it. Finally, we discuss how the engagement of trade-dependent firms may change depending on how the political context evolves by presenting three possible scenarios for the future.

This chapter takes stock of the dense network of trade agreements in services that has evolved in the East Asian region, and considers some of its prospects in the wake of the withdrawal of the United States from the TPP negotiations. Perhaps surprising for a region associated with booming economies, trade agreements in Asia have not always been driven by economic considerations. At the same time, it remains unclear if services trade has been as much a factor in trade agreement formation as in other regions. Based on DESTA data, the chapter shows that services trade (at least in its cross-border and consumption abroad modes) and PTA formation go hand-in-hand in Asia as well, even though the panoply of agreements remains divided by two different and possibly incompatible approaches, as some countries prefer positive lists and others prefer negative lists. With the United States choosing to withdraw from regional PTA projects for the time being, the positive-list approach looks to be the most common in the near future, while liberalization prospects may be limited.

The total share of foreign direct investment (FDI) flows to least developed countries (LDCs) remains very low and is often focused on resource extraction. Whereas most studies have focused on host countries’ measures to attract FDI, this chapter instead focuses on what the development partners of LDCs can do to promote and facilitate more quality and sustainable FDI to LDCs, either directly or indirectly. Direct support measures support outward FDI, such as financing programs and risk management instruments. Indirect support include support for improving the investment climate or the negotiation of international investment agreements. This chapter suggests certain avenues and likely scenarios that assist the customizations of home country measures (HCMs) to work for LDCs. For example, while it is laudable that home country governments support their firms to invest in LDCs, this may distort competition among foreign investors but also domestic firms in the similar sector. Support measures can also be designed conditional upon investor’s compliance with certain criteria of sustainable and responsible investment, such as technology transfer, climate protection, and respect for human rights.

This chapter first characterizes the fundamental purposes of the WTO and trade agreements, which should be viewed as much broader than trade liberalization. It then presents the major challenges that the trade system now faces. Special emphasis is paid to technological change since the WTO was created in 1995, namely, the development of global value chains. Finally, the author contends that trade agreements, in response, must be designed and conditioned upon social policy commitments. They should include, or be conditioned upon, agreements that cover: coordinated tax policy to combat harmful tax competition, tax avoidance, and tax evasion; domestic social security and job retraining, supported by trade adjustment commitments; labor protection; protections against social dumping; and accommodation of industrial policy experimentation for development. It will not be an easy process to reconceive trade agreements to better ensure social inclusion through these means, but the current system otherwise could unravel.

International migration is a relative newcomer on the “trade and” agenda and has hitherto received relatively little attention in trade and migration studies alike. The inclusion of labour migration as one essential mode of cross-border trade in services, so-called Mode 4 in the GATS, opened the agenda for more far-reaching developments at the level of regional and bilateral free-trade agreements . This chapter shows that this deepening of the trade-migration nexus is intricately linked to power shifts in the global economy and the rise of regionalism. For the international trade regime in 2025, this means that, in combination with the ongoing power transitions, the trade-related mobility agenda is likely to expand beyond what the former sponsors of the GATS agreement, the European Union (EU) and the United States, originally intended.

This chapter investigates the overlapping nature of investment governance, in which BITs and PTAs encode common commitments toward the protection and liberalization of investment. It advances the scholarship on regime complexity, in which non-hierarchical and overlapping institutions regulate investment. The study examines common institutional design across PTAs and BITS, while recognizing that the broader investment regime complex includes legal precedents set through dispute settlement at the WTO and ICSID. Utilizing an original data set of investment provisions in PTAs and for BITS data provided by UNCTAD’s International Investment Agreements (IIA) project, the analysis examines how these two international agreements have co-evolved in terms of institutional design in guiding principles, scope, and enforcement. The hypothesis is that these two types of agreements are largely complementary, where PTAs emphasize liberalization of investment in tandem with other trade-related provisions, and BITs emphasize the protection of investments and investor rights. The results of principal component analysis of provisions in PTAs and BITs support the hypothesis of complementarity. Additional analyses also show that investment provisions in PTAs draw heavily from those of BITs, but BITs draw less from PTAs.

This chapter sketches future scenarios of TRIPS implementation in developing countries by looking at past experience and current trends, and by comparing historical and cross-country patterns. The chapter focuses on the three largest emerging economies - Brazil, India, and China (BICs) - because they have the highest potential to shape the intellectual property regime. The chapter finally draws some lessons from these previous experiences to suggest what the likely positions of the BICs will be on TRIPS implementation up to 2025.

Sixty-two percent of the 162 preferential trade agreements (PTAs) signed between 1945 and 1989, and 81 percent of the 654 post-1990 PTAs, include at least one clause on a non-trade issue (NTI). Using a novel dataset that covers 262 data points on NTIs in 644 PTAs,shows three major trends of NTIs in trade deals: first, the NTIs agenda is broadening, with ever more aspects included in trade agreements. Modern PTAs move beyond clauses on national security, a general call on environmental protection, and labor rights. Instead, these progressive agreements cover aspects ranging from gender to waste management, to the fight against terrorism. Second, the style of regulating such issues converges. No longer are there different approaches to deal with NTIs in PTAs. Now, the gold standards seem to be the installation of a court system dealing with potential NTI violation and combining this with a formal dialog between policy makers and domestic stakeholders on NTIs. Third, developing countries have been catching up and increasingly commit to NTIs. The proliferation of NTIs in PTAs is likely to continue, where societal pressure is prone to push this process even further.

Preferential trade agreements (PTAs) cover a much wider diversity of environmental clauses than World Trade Organization (WTO) agreements. Which PTA environmental clauses could be multilateralized and included in the WTO rulebook? This chapter compares five different scenarios for the potential multilateralization of PTA environmental clauses: (1) The “routine scenario” combines the most frequent clauses, (2) the “consensual scenario” includes the clauses accepted by a high number of WTO members, (3) the “trendy scenario” includes the most popular clauses in recent times, (4) “the power-game scenario” combines the clauses that are jointly supported by the United States and the European Union, and (5) the “appropriate scenario” is a compilation of the clauses typically included in large membership agreements. This chapter compares and contrasts the implications of each scenario and identifies their common ground. Although each scenario represents an ideal type unlikely to materialize, the comparison offers insights into how the multilateral trading system could be developed to improve the integration of environmental concerns.

This chapter shows that the rules of origin, which are meant to protect against the trans-shipment of foreign goods in free trade areas, are instead being used to promote particular industries. Strict rules of origin add to production costs by forcing firms to use more expensive parts and pay administrative costs. They also prevent firms from exporting to markets governed by different trade agreements and disproportionately hurt small firms. The ongoing renegotiation of NAFTA highlights the potential to expand the use rules of origin as a form of trade protection. The WTO currently has only limited disciplines on rules of origin. Clear and enforceable international regulations would help thwart the spread of complex rules.

In recent years, the negotiation of various trade agreements, such as the TPP, TTIP and CETA, has been accompanied by a large public backlash. Are we observing a paradigm shift in public perception of world trade or just temporary shifts in public support for the global economic order that oscillate around a more or less steady level? This chapter provides an overview of the major determinants of support for or opposition against PTAs and discusses how much room to maneuver policy makers have in designing such agreements. Furthermore, we discuss what policy makers can do to increase support for such agreements. We thereby focus on framing strategies and provide an analysis of which types of arguments are conducive to increase support for PTAs and how individuals process such information. This allows us to construct different future scenarios for policy makers to better align the negotiation and design of future trade agreements with the demand of their constituencies.

After three decades of companionship, investment protection rules and trade agreements are heading for a divorce. Investment chapters have been included in preferential trade and investment agreements (PTIAs) since the late 1980s, but they have recently come under fire. The U.S. administration considers privately enforceable investment protection obligations as an unwanted incentive to offshore American jobs, and the EU Commission seeks to omit them to benefit from the accelerated ratification process reserved for trade agreements that fall under exclusive EU competency. After decades of coexistence, investment protection rules and trade agreements are thus likely to go their separate ways. This chapter empirically evaluates the impact of their thirty-year companionship to assess the implications of their looming split. It finds that investment chapters remain little more than a bilateral investment treaty plugged into a trade agreement. PTIAs and self-standing investment treaties do not vary systematically in investment protection content, and the wider trade agreement context does little to affect the interpretation of investment rules in PTIAs. In spite of their coexistence in the same treaty, there is thus little evidence of cross-fertilization between trade and investment protection rules in PTIAs. This absence of normative convergence suggests that their looming split merely formalizes the continuous normative distinction between trade liberalization and investment protection.