The trade of intermediates now accounts for a growing share of global trade. In this highly fragmented global production system, any change in tariff rates can generate a higher impact than that of initial direct tariffs. To assess the impact of tariffs on global value chain participation, this study uses value-added trade statistics and cumulative tariff rates for 12 sectors from 168 countries for the years 1990–2015. The visual inspection suggests that initial tariffs result in higher tariff rates (almost 14%) due to a knock-on impact along with supply chains. The main empirical finding is that both faced and imposed tariff rates have significant negative impacts on sectoral global value chain participation. The effect is also persistent in the analysis if we employ cumulative tariff rates. Apart from these policy determinants, sector- and country-level endowments, such as higher relative length, capital intensity, foreign direct investment stock, and human capital appear to be the major drivers for higher total, forward, and backward global value chains participation. Even if our main results are robust, there are also some distinctions in the effects of tariff rates depending on the country- and sector-level heterogeneities. In a policy-related debate, given the cascading impacts of these liberalization initiatives, autonomous, regional, and global liberalization efforts are critical for all sectors to reap the benefits from the global production system.

The numbers do tell a story: 2022 was the year with the fewest disputes ever submitted to the WTO. The possibility to appeal into the void must have a played a role, dis-incentivizing potential complainants from formally submitting disputes. Appeal into the void? This requires some explanation.

In response to the invasion of Ukraine, the EU and most other advanced economies imposed extensive sanctions on Russia, intending to harm its production capabilities and hinder its economic activities by restricting its access to international trade and financial markets. This paper develops an empirical framework based on the synthetic control method to assess the impact of the war and the following sanctions on bilateral and sectoral exports to Russia almost in real time. The war and the following sanctions reduced aggregate exports to Russia by a third between March and December 2022, with the effects being stronger for sanctioning countries than for non-sanctioning ones, albeit with substantial country-level heterogeneity within each group. Exports to Russia in high-tech sectors – relatively more targeted by trade sanctions – have been disproportionately affected.

This article examines imports by Swedish firms and the utilization of the tariff preferences offered by the EU–South Korea Free Trade Agreement. To benefit from tariff preferences, the importer must make a formal request to use the preferences and also document the origin of the imported products (with a certificate of origin provided by the foreign exporter). This may be costly, and some importers choose to pay import tariffs even when tariff preferences are available. Hence, the preferences are not fully utilized. Using a detailed firm–transaction level data set on Swedish imports from South Korea, we analyse the determinants of preference utilization and how firms learn to use preferences. The results show that preference utilization is strongly correlated with potential duty savings, which depend on the preference margin and the size of the import transaction. From a learning perspective, we find that preference utilization is closely related to the number of import transactions undertaken by the firm, suggesting a learning-by-doing mechanism. The length of time the firm has been involved in importing activities plays a smaller role.

The GATT security exceptions were practically in hibernation until recently. The recent WTO disputes panel activity concerning such exceptions is characterized by a standard of review that places the accent on ‘when’ action should be taken and not so much on ‘what’ action should be taken. We see two problems with this construction. First, the ‘when’ might be a function of privileged information that those possessing it might be unwilling to divulge in a transparent manner. Second, national security is an amorphous concept, and unless we disaggregate it, it is impossible to pronounce the appropriateness of measures adopted to pursue the underlying objective. In turn, the absence of disaggregation could lead to false positives and negatives, as the same action could be pursuing essential security or providing protection to domestic players.

Our paper sheds light on Sanitary and Phytosanitary (SPS) cooperation among trading countries. We contribute to the existing literature a data-driven analysis on the effectiveness of various forms (in monetary value, duration, and diversification) of SPS related technical assistance received by 33 countries from 1993 to 2015. The World Trade Organization's (WTO's) SPS Agreement encourages biosecurity for countries through technical assistance, to safeguard human health and productivity from contamination by biological hazards (pests, pathogens, or invasive species). Our panel model finds that WTO's SPS program encourages simultaneously agricultural trade and biosecurity. We implement a Multiple Indicator Solution (MIS) to correct bias from the endogenous technical assistance. The effectiveness of technical assistance depends on geography and the level of development among the heterogeneous countries referred to in our data. This investment in biosecurity benefits both donors and recipients of technical assistance. Based on our results donors should be encouraged to invest in countries with below average resources and abilities.

The exit of the United Kingdom from the European Union (EU) single market and customs union has adversely affected trade prospects of many developing economies that depended on the UK market for their exports. This paper investigates the impact of Brexit on African countries' exports to the UK. The comparison is based upon trade between the set of African countries which export most to the UK and the EU. It provides a quantitative assessment of the trade effect through the use of descriptive analysis and empirical estimations by employing the difference-in-difference (DID) estimation approach. The descriptive analysis finds that the share of African exports sent to the UK has declined since the Brexit announcement in 2016. The empirical estimations using the DID approach also demonstrate a drop of 20–30% in African countries exports to the UK relative to the EU-27 in this period. These results hold to a battery of robustness checks, including the use of an alternative estimation approach, varying sample size, and the use of alternative counterfactuals. We further show that the trade flows started to drop immediately after the announcement of the Brexit referendum in 2015 but the main drop came after the Brexit referendum results became evident. These findings imply the need for policy intervention and support for African countries to revitalize their trade flows and alleviate the unintended effects of this trade shock.

The global trend towards heightened protection for geographical indications (GIs) has been bolstered by the incorporation of anti-evocation provisions in various bilateral and regional trade agreements, primarily led by the European Union (EU). While these anti-evocation measures have raised GI protection to an unprecedented level, they also place limitations on the freedom of expression and competition for other market players. This article conducts a critical analysis of the necessity of those restrictions by evaluating the justifications for implementing anti-evocation protection. Specifically, the analysis centres on the formal justifications put forth by law enforcement authorities and their direct contribution to enforcement errors and inconsistencies. Furthermore, inherent limitations within these justifications are also identified. Clarifying the rationale for anti-evocation protection and establishing a clearly defined scope of protection, substantiated by sound justifications, could effectively mitigate errors and inconsistencies in law enforcement and minimize any undue impact on the public interest. Countries that have adopted or are considering adopting anti-evocation protection, following the EU's lead, should exercise caution to avoid similar pitfalls.

The Appellate Body (AB) of the World Trade Organization (WTO) has not heard an appeal since 2019. This article explores how adjudicators and member states have navigated WTO dispute settlement in this post-AB world. It begins by providing an overview of dispute settlement practice from 2020 to 2022, including by cataloguing appeals into the void, appeals to arbitration, and appeals forewent. It explains the incentives created by the lack of a functioning appeals mechanism and provides background on the alternative appeals procedure agreed to among a subset of WTO members: the Multi-Party Interim Arbitration Arrangement (MPIA). Moreover, it closely examines five WTO disputes: Colombia–Frozen Fries, Turkey–Pharmaceutical Products, EU–Steel Safeguards, Thailand–Cigarettes, and Costa Rica–Avocados. Through these five disputes, the article examines the circumstances in which members have agreed to binding appeals arbitration even absent formally committing to the MPIA, the circumstances in which members have appealed to arbitration or foregone such appeals, and whether facilitated negotiations present a workable alternative to an effective appeals mechanism. Finally, this article closely analyzes the reasoning of two appeals arbitration awards issued to date – Colombia–Frozen Fries and Turkey–Pharmaceutical Products – with a special focus on how those awards depart from AB precedent and what those departures can tell us about the current crisis.

The WTO Government Procurement Agreement (GPA) does not legally define what entities should be covered by the Agreement. However, its member Parties list their ‘covered entities’ in a series of schedules. The list approach has complicated accession negotiations and discourages Parties from providing a ‘wider’ range of entity coverage. Moreover, the list approach raises some tensions and a lack of legal certainty, especially concerning those that are not strictly ‘government entities’, such as State-owned enterprises (SOEs). This problem is exacerbated in the case of modern SOEs in developing countries, many of which can bear both public and private features. Given these conditions, the author proposes a definition of ‘covered entities’ to facilitate accession negotiations and the future expansion of the GPA. The proposal is based on a comparative study of the GPA and the EU public procurement regulations. It develops a framework by which all publicly controlled entities are presumably covered by the GPA. Nevertheless, Parties can rebut GPA obligations by proving that an entity competes with other commercial entities under normal market conditions.

To avoid penalizing exporters that already paid carbon prices, the EU Carbon Border Adjustment Mechanism credits carbon taxes and Emissions Trading Schemes in third countries. By excluding instruments of traditional regulation (e.g. emission standards) and indirect carbon prices (e.g. fuel excise taxes) from this crediting mechanism, the EU is criticized for discriminating against countries that do not follow its climate model, in breach of international trade and climate law. This article seeks to nuance this criticism by arguing that the calculation of actual emissions (instead of default values) under the EU CBAM allows exporters to reflect compliance with foreign emission standards, and thus respects states' right to pursue emission reductions through traditional regulation. However, amendments of the CBAM Regulation are necessary to recognize the positive and negative impact of indirect carbon prices on decarbonization, and the role of carbon-crediting mechanisms in equalizing carbon costs in a more flexible and equitable way.

In the recent years, there has been an upsurge in the number of countries that are mainstreaming gender equality concerns in their trade and investment agreements. These recent developments challenge the long-standing assumption that trade, investment, and gender equality are not related. They also show that gender mainstreaming in trade and investment agreements is here to stay. However, very few countries – mostly developed countries – have led this mainstreaming approach and have made efforts to incentivize other countries to negotiate gender-responsive trade and investment agreements. The majority of developing countries are yet to take their first steps in negotiating such policy instruments with a gender lens, and their hesitation can be grounded in various reasons including fears of protectionism, lack of data, paucity of understanding and expertise, and, more broadly, constraints relating to their negotiation capacity. Moreover, the inclusion of gender-related concerns in the negotiation of such agreements has deepened and widened the negotiation capacity gap between developed and developing countries. In this article, the authors attempt to assess this widening negotiation capacity gap with the help of empirical research, and how this capacity gap can lead to disproportionate and negative repercussions for developing countries more than developed countries.

This article discusses and contextualizes the very recent advancements in digital trade regulation based on the insights provided by the Trade Agreement Provisions on Electronic-commerce and Data (TAPED) dataset. Within the time frame of January 2020 to November 2023 that we analyze, digital trade negotiations have increased in preferential trade agreements (PTAs) significantly, and there has been a sharp rise in the negotiation of new types of treaties, known as ‘Digital Economy Agreements’. Beyond the critical advances in substantive rulemaking, we observe non-traditional actors stepping into the gap left by the shifting interest of traditional rulemakers to craft rules that best fit their policy priorities. Additionally, we see a broadening of topics beyond conventional digital trade matters, underscored by commitments of limited legal enforceability. The TAPED dataset has been updated to reflect these recent developments, emphasizing the importance of regular reviews to stay current and accurately inform research and policymaking in the area of digital trade regulation.

Two scholarly communities work on global trade and investment governance yet communicate little with each other. On the one hand, classic trade and investment scholarship focuses on states' foreign economic policies, trade and investment treaty programs, and participation in the World Trade Organisation. On the other hand, scholars of private and commercial law study how businesses draft and enforce the international contracts of a private law nature that ultimately constitute international trade and investment transactions. This research note seeks to raise awareness for this bifurcation of research on global trade and investment, develops a conceptual framework to better understand the role of private law in shaping trade and investment flows, and proposes a research agenda anchored in economics, political economy, and political science to advance our understanding of the role of private law in global trade and investment transactions and governance.

On 20 January 2021, a Panel of Experts constituted under the EU–Korea FTA circulated its report in a proceeding initiated by the EU raising concerns about Korea's inadequate protection of certain labour rights in Korea, and less than satisfactory efforts to ratify the fundamental ILO Conventions. Addressing a jurisdictional claim, raised by Korea in its defense, that the EU has not demonstrated that the challenged measures affected ‘trade-related aspects of labour’, the panel found that the FTA parties’ commitments to adhere to labour standards and to ratify ILO conventions are not limited to trade-related aspects of labour, and therefore there is no requirement to demonstrate that such measures should be trade related.

The panel's interpretive reasoning in arriving at this finding does not appear to sit well with the text of the FTA. Further, such an expansive interpretation could have serious systemic implications going forward. In addition to raising questions regarding the purpose and motivations behind including labour standards in FTAs, it effectively transforms the FTA into a vehicle to enforce ILO commitments and induce countries into ratifying fundamental ILO conventions. It lends credibility to a general skepticism, particularly amongst developing countries, regarding the role of labor standards in FTAs and also raises questions regarding whether FTAs constitute an appropriate forum to address and resolve concerns regarding labour reforms.

What do the provisions on the non-discrimination principle (the principles) in digital trade mean under trade agreements, especially in the absence of a clear international consensus on the subject of the principles? To answer this question, this study first identifies the issues related to the application of the principles in digital trade and presents a theoretical framework to explain how the principles can affect digital trade despite such issues. Using various data sources, such as digital trade flows, the inclusion of the principles in digital trade agreements, and digital trade barriers, we empirically test the hypotheses constructed from our theoretical framework. We find that inclusion of the principles in the trade agreements is more likely to increase digital trade flows. Moreover, though digital trade barriers decrease digital trade flows, this negative effect can be mitigated when the principles are more clearly defined in the trade agreements.

Rulemaking in digital trade is proceeding apace. Many preferential trade agreements contain dedicated e-commerce or digital trade chapters and some states have entered into stand-alone digital economy agreements. This article seeks to establish whether, and to what extent, normative change is occurring in digital trade agreements, the nature of any changes, and identify which states are acting as norm entrepreneurs. We employ a new method of legal coding, systematically comparing the nature and prescriptiveness of digital provisions in 12 trade agreements concluded between 2019 and 2023. We find evidence of substantial policy innovation, and identify Singapore as the key norm entrepreneur. A new wave of ‘Singapore-led’ agreements substantially expands the scope of digital trade, to cover areas such as digital identities, e-invoicing and e-payments, the governance of AI, and regulation of new digital technologies. Commitments are typically couched as soft rather than hard law, reflecting the nascent stages of rulemaking. Norm entrepreneurship on the part of Singapore and its allies reflects a desire to position themselves as ‘digital hubs’ in the global economy, spur rulemaking in areas where innovation is ahead of regulation, and promote digital interconnectivity at time of regulatory divergence and geopolitical rivalry.

The US–Mexico–Canada Agreement (USMCA) introduced a new compliance institution for labor rights in trade agreements: the facility-specific Rapid Response Labor Mechanism (RRM). The RRM was developed to tackle one particular thorn in the side of North American integration – labor rights for Mexican workers – as it had had detrimental, long-term political–economic consequences for the US–Mexico trade relationship. This article reviews the unique political–economic moment in the United States and Mexico that prompted the creation of this tool. It describes how the RRM works and the considerable financial and human resources the US and Mexican governments deployed to operationalize it. The article then reports a number of stylized facts on how governments used the RRM during its first three years, largely in the auto sector. It proposes paths of potentially fruitful political–economic research to aid understanding of the full implications of the RRM and concludes with preliminary lessons as well as a discussion on the potential for policymakers to assess facility-specific mechanisms for labor or other issues, such as the environment, in future economic agreements.

This article examines shifts towards onshoring pharmaceutical manufacturing, a response to the vulnerabilities exposed by the COVID-19 pandemic in global supply chains. It delves into how globalization, public policy, and geopolitical tensions have shaped pharmaceutical markets, compelling nations to seek solutions that ensure reliable medicine access and reduce dependency on foreign supplies. The study highlights disparities in regulatory oversight and geographic concentration of production, which contribute to frequent shortages, particularly of generic medicines. The pandemic intensified these issues, prompting increased state interventions and heightening concerns over geopolitical risks. As a result, onshoring efforts, often encapsulated in local content measures, have expanded, and are now driven by both economic motives and imperatives of national security and public health.

The inception of the African Continental Free Trade Agreement (AfCFTA) constitutes a major advancement in Africa's economic integration process. Diverging from what appears to be the norm in contemporary trade treaties, the agreement adopts a conditional Most Favoured Nation (MFN) clause hinged on the principle of reciprocity. Without the promise to reciprocate preferential treatment, the beneficiary state does not assume the right to demand MFN treatment. In broader discussions, this feature has been criticized for possessing the tendency to restrict trade. However, examining it in the context of Africa's trade paradigm, this paper argues that the non-automaticity of the AfCFTA's MFN clause is a cardinal feature safeguarding its existence.