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Next-Generation Agreements and the WTO

Published online by Cambridge University Press:  01 July 2022

Kathleen Claussen
Kathleen Claussen*
Affiliation:
University of Miami School of Law, Coral Gables, FL, USA
*
Email: [email protected]
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Abstract

This paper reviews the trade agreement landscape and argues that the conventional understanding of trade agreements as encapsulated in the WTO Agreements is now outdated. This misperception about trade agreements is not just an institutional insufficiency. Concentration on those agreements has led many practitioners and commentators to underestimate the variable texture of the global trade agreement fabric. But these shortcomings have not inhibited states from concluding innovative alternatives to regulate and manage the cross-border movement of goods and services. As this paper shows, trade-related agreements that do not fit the perceived traditional mold have proliferated. Given these advances, more policy and scholarly attention is required. Accordingly, this paper serves as a roadmap for the accommodation of trade agreements within the WTO and as an agenda for additional research.

Keywords

Trade agreementsTrade-plusTransparency
Type
Original Article
Information
World Trade Review , Volume 21 , Special Issue 3: WTO at a Crossroads: The WTR 20th Anniversary Issue , July 2022 , pp. 380 - 388
Copyright
Copyright © The Author(s), 2022. Published by Cambridge University Press

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References

1 See, e.g., A. Mattoo et al. (eds.) (2020) Handbook of Deep Trade Agreements. World Bank Group; Acharya, R. (ed.) (2016) Regional Trade Agreements and the Multilateral Trading System. Cambridge University PressGoogle Scholar.

2 Each of these positions was articulated and then made prominent already in 1993 by J. Bhagwati, ‘Regionalism and Multilateralism’, in J. de Melo and A. Panagariya (eds.), New Dimensions in Regional Integration. Cambridge University Press.

3 See WTO Secretariat (1995) ‘Regionalism and the World Trading System’, Appendix Table 1. See ‘Overview of Developments in International Trade and the Trading System’, WTO News, 1 December 1995, www.wto.org/english/news_e/pres95_e/ov11.htm#Back%20to%20Top.

4 Regional Trade Agreements, supra note 1. These break down into 320 agreements notified under GATT Article XXIV, 188 notified under GATS Art. V, and 61 notified under the Enabling Clause. Ibid.

5 General Agreement on Tariffs and Trade, 30 October 1947, 61 Stat. A-11, 55 U.N.T.S. 194, Art. XXIV.

6 I do not discuss here plurilateral agreements concluded under the auspices of the WTO. Those agreements have recently grown in importance for rule development within the WTO, however, and also merit additional attention. For an important overview of plurilaterals, see Lamp, N. (2016) ‘The Club Approach to Multilateral Trade Lawmaking’, Vanderbilt Journal of Transnational Law 49(1), 7–55Google Scholar.

7 While this term is used by many, it can also be confused with preference programs which I do not discuss here.

8 Free Trade Agreements, Office of the United States Trade Representative, https://ustr.gov/trade-agreements/free-trade-agreements (last visited 1 November 2021).

9 See WTO, ‘Regional Trade Agreement Database, Results for European Union’, http://rtais.wto.org/UI/PublicSearchByMemberResult.aspx?MemberCode=918&lang=1&redirect=1 (last visited 1 November 2021).

10 See African Union, CFTA, https://au.int/en/cfta (last visited 1 November 2021).

11 Free Trade Agreements, Asian Regional Integration Center, https://aric.adb.org/fta (last visited 1 November 2021).

12 Ibid.

13 See, e.g., those sources cited in notes 1 and 2.

14 See J. Bhagwati (1995), ‘US Trade Policy: The Infatuation with Free Trade Agreements’, in J. Bhagwati and A.O. Krueger (eds.), The Dangerous Drift to Preferential Trade Agreements. Washington, DC: AEI Press.

15 To name one: the same labor obligations in the Trans-Pacific Partnership Agreement form part of the Canada–EU Comprehensive Economic Trade Agreement. What is more surprising, however, is the appearance of US-initiated language in agreements between states neither of which shares an FTA with the United States. For instance, the same labor chapter language from TPP appears also in the EU–Vietnam Free Trade and Investment Protection Agreement.

16 See, e.g., K. Claussen (2019) ‘Revisiting the Multilateral Trading System: Anatomy of the WTO Impasse’, ASIL Proceedings 112, 315 (hereinafter Claussen, Impasse).

17 United States–Mexico–Canada Agreement, agreed 1 October 2018, entered into force 1 July 2020.

18 See J. Biden (2019) ‘Responses to United Steelworkers’, Federal Candidate Questionnaire, USW Voices (17 May 2020), www.uswvoices.org/endorsed-candidates/biden/BidenUSWQuestionnaire.pdf.

19 ‘Can Mercosur Reverse Decades of Backsliding?’, The Economist, 27 March 2021.

20 Compare K.A. Shaw (2021) ‘China is Racing Ahead to Lock-in Asian Trade: Time to Worry’, Barron's, 3 December 2021, www.barrons.com/articles/china-rcep-trade-deal-51638479544?tesla=y (arguing that the United States ought to (re-)join Comprehensive and Progressive Trans-Pacific Partnership Agreement) with D. Henig (2021) ‘Perspectives: The World Trading System Is No Longer Subject to Universally Agreed Rules’, Borderlex, 1 December 2021, https://borderlex.net/2021/12/01/perspectives-the-world-trading-system-is-no-longer-subject-to-universally-agreed-rules/ (arguing that more agreements create suboptimal economic outcomes).

21 ‘Memorandum of Understanding for the Exchange of Information on Exports of Fresh Tomatoes between the Secretariat of Economy of the United Mexican States and the Department of Commerce of the United States of America’, 19 and 23 August 2013.

22 This agreement is available at www.seco.admin.ch/seco/en/home/Aussenwirtschaftspolitik_Wirtschaftliche_Zusammenarbeit/Wirtschaftsbeziehungen/Technische_Handelshemmnisse/Mutual_Recognition_Agreement_MRA0/MRA_Schweiz_EU.html (last visited 1 November 2021).

23 See, e.g., Testimony of US Trade Representative Robert Lighthizer, House Ways & Means Comm., 17 June 2020,www.c-span.org/video/?473040-1/house-ways-means-committee-hearing-trade-policy.

24 See K. Claussen (2022) ‘Trade's Mini-Deals’, Virginia Journal of International Law 62, 315.

25 The recent US–Japan trade agreement is among the exceptions. Members held a robust discussion about the deal's WTO compliance at the WTO RTA Committee.

26 See generally T.C.I. Klett and O.R.S. Oswald (2018) ‘Free Trade Agreements as BRI's Stepping-Stone to Multilateralism: Is the Sino–Swiss FTA the Gold Standard?’, in W.Z.I. Alon and C. Lattemann (eds.), China's Belt and Road Initiative. London: Palgrave Macmillan.

27 See J.T. Gathii (2011) African Regional Trade Agreements as Legal Regimes. Cambridge University Press, 67–68 (describing how African trade agreements also facilitate water governance, among other policies). The AfCFTA does not include the expansive set of commitments that characterize the deep and comprehensive commitments now common in the mega-regionals. Gathii argues that this omission indicates the absence of popular support in some African countries for such extensive commitments in intra-African trade.

28 I note that despite this title, many agreements of the type I discuss are not recently concluded. Trade-related agreements such as those described here have been in place for decades but only recently have come to the fore.

29 Kerry Chase catalogs these views, K. Chase (2006) ‘Multilateralism Compromised: The Mysterious Origins of GATT Article XXIV’, World Trade Review 5(1), 1–30.

30 General Agreement on Tariffs and Trade, 30 October 1947, 61 Stat. A-11, 55 U.N.T.S. 194, Art. XXIV.

31 Chase, supra note 29, at 2–3.

32 Ibid.

33 J.H. Jackson (1993) ‘Regional Trade Blocs and the WTO’, World Economy 16, 121–131.

34 Ibid., at n.9, citing the Understanding on the Interpretation of Article XXIV of the General Agreement on Tariffs and Trade, Dunkel Draft, at pp. U1-4. C.P. Bown, A. Sykes, and R. Staiger (2017, ‘Multilateral or Bilateral Trade Deals? Lessons from History’, in C.P. Bown (ed.), Economics and Policy in the Age of Trump. London: CEPR Press) note that after concluding a series of trade agreements in the 1930s and 1940s, the United States did not negotiate others until the mid-1980s.

35 Appellate Body Report, Turkey – Restrictions on Imports of Textile and Clothing Products, WT/DS34/AB/R (adopted 19 November 1999).

36 See, e.g., G. Shaffer (2006) ‘The Challenges of WTO Law: Strategies for Developing Country Adaptation’, World Trade Review 5(2), 177–198.

37 World Trade Organization (1995) Regionalism and the World Trading System. Geneva: World Trade Organization, 63.

38 See Claussen, Impasse, supra note 16.

39 ‘Transparency Mechanism for RTAs’, World Trade Organization, www.wto.org/english/tratop_e/region_e/trans_mecha_e.htm

40 See K. Claussen (2022) ‘Missing Deals: Transparency in Foreign Commercial Lawmaking’, Columbia Law Review 122 (forthcoming) (discussing the transparency problems with trade agreements in the United States).

41 ‘Regional Trade Agreements’, World Trade Organization, www.wto.org/english/tratop_e/region_e/region_e.htm (last visited 21 October 2021).

42 Claussen, supra note 40.

43 Debra Steger made a similar point in what was then ‘next generation’ agreements in 2012. See D.P. Steger (2012) ‘Institutions for Regulatory Cooperation in “New Generation” Economic and Trade Agreements’, Legal Issues of Economic Integration 39, 109.

44 Harlan Cohen discusses these dynamics as cyclical. See H.G. Cohen (2018) ‘Multilateralism's Life-Cycle’, American Journal of International Law 112, 47.

45 Alter and Raustiala helpfully lay the groundwork for issues of regime complexity in recent years. See K.J. Alter and K. Raustiala (2018) ‘The Rise of International Regime Complexity’, Annual Review of Law and Social Science 14, 329.

46 See generally Ovádek, M. and Willemyns, I. (2019) ‘International Law of Customs Unions: Conceptual Variety, Legal Ambiguity and Diverse Practice’, European Journal of International Law 30, 361–389CrossRefGoogle Scholar.