The European Union (EU) often conditions preferential access to its market on compliance with Non-Trade Policy Objectives (NTPOs), including human rights and labor and environmental standards. In this paper, we first systematically document the coverage of NTPOs across the main tools of EU trade policy: its (association and non-association) trade agreements and Generalized System of Preferences (GSP) programs. We then discuss the extent to which the EU can use these tools as a ‘carrot-and-stick’ mechanism to promote NTPOs in trading partners. We argue that, within trade agreements, the EU has limited scope to extend or restrict tariff preferences to ‘reward good behavior’ or ‘punish bad behavior’ on NTPOs, partly because multilateral rules require members to eliminate tariffs on substantially all trade. By contrast, GSP preferences are granted on a unilateral basis, and can thus more easily be extended or limited, depending on compliance with NTPOs. Our analysis also suggests that the commercial interests of the EU inhibit the full pursuit of NTPOs in its trade agreements and GSP programs.

This article examines the social challenges posed by the data-driven economy, their implications for international trade law, the current trade negotiating context involving distinct models advanced by the United States, European Union, and China, and a way forward that can both enhance trade and regulatory efficacy. It examines seven interrelated risks. They are the rise of ‘winner-take-all’ companies; social control through public and private surveillance; social polarization; premature deindustrialization; national security threats; cybersecurity risks; and threats to personal privacy. In response to these risks, the article contends that trade agreements should be deferential to national regulation, while supporting mechanisms for regulatory learning and adaptation. In this spirit, the article advances a governance framework that goes beyond ‘liberalization' and that foregrounds the importance of building resilience and engaging in regulatory problem solving.

This article introduces a special issue that examines the effects of strategic competition on the future of the global trade regime. We argue that traditional work in economics and the current set-up of global economic regimes ignores economic statecraft as a key element in understanding trade conflict. Specifically, we outline three examples of contemporary economic statecraft – industrial policy, trade restrictions, and new investment rules – that have been used to block foreign direct investment on the basis of national security claims. Based on this analysis, we explore how the WTO and other economic regimes might address the global economic governance of economic statecraft. In concluding, we outline the theoretical and empirical work in the subsequent case studies that examine the use of economic statecraft in the United States, China, India, Japan, and South Korea.

The rise and proliferation of private standards have been recognized in international trade law, and various concerns have been raised. Existing literature analyses how the World Trade Organization (WTO), particularly the SPS (Sanitary and Phytosanitary) Committee and the TBT (Technical Barriers to Trade) Committee, have responded (or cannot respond) to the proliferation of private standards. This paper goes one step further by focusing specifically on the meta-regulatory function performed by regional and international organizations other than the WTO. This paper sheds light on three types of governance techniques that can serve as meta-regulatory activities in relation to private standards by regional and international organizations: (1) governance by delegation; (2) governance by information; and (3) governance by soft law. This paper analyses features of these governance techniques and considers the relation between these governance techniques and the WTO's approach.

After almost two decades of dealing with asymmetric threats, America's strategic focus on technological superiority carefully honed during the Cold War, began to fracture, eroding its military and economic advantage. But China's recent emergence as a credible geopolitical rival has reinvigorated US efforts to sustain high-tech leadership as the basis of its military primacy. At the center of these efforts are the defense and defense-related agencies of the national security state (NSS) whose mission is to dominate the new technological frontiers of military power and achieve future competitive advantage. Alongside the quest for breakthroughs in foundational technologies, NSS agencies are seeking to correct long neglected deficiencies in advanced manufacturing, by rebuilding the industrial ecosystem's supply chains depleted after decades of offshoring. With this suite of initiatives, the US is following a course of action more consistent with the exercise of (economic) statecraft than industrial policy. However, unlike its authoritarian rival, the US faces the challenge of having to balance security imperatives with commercial interests and, not least, having to contend with a dysfunctional and maladapted presidency.

The Belt and Road Initiative (BRI) has brought with it an unprecedented number of agreements. BRI agreements consist of primary agreements (particularly MOUs) and secondary agreements (like performance agreements). They are a distinct, landmark feature of the BRI. Focusing on primary agreements and their close link with secondary agreements, this paper explores the following questions: What are the legal status and characteristics of primary agreements? Why are they adopted by China? What challenges do they face? BRI primary agreements can be regarded as a form of soft law, but that repurposes soft law characteristics for project development rather than rule development. BRI primary agreements have the following unique characteristics: (i) minimal legalization, (ii) a coordinated, project-based nature, and (iii) a hub-and-spoke network structure. While BRI primary agreements benefit from the advantages of soft law (e.g., reduced contracting costs, flexibility), they face challenges including those concerning underlying interests and their effectiveness.

This paper assesses key issues in the dispute over the United States’ claim that for certain grains China exceeded its limits on domestic support under the Agreement on Agriculture (AoA) during 2012–2015. The panel first determined that the base years for the reference price in calculating China's market price support were 1996–1998, rather than 1986–1988 as stipulated in the AoA, and that production in the geographic regions where the support programs operated, not the smaller quantities purchased at administered prices, constituted eligible production. The panel then found China had exceeded its limits in each of the four years for wheat, Indica rice, and Japonica rice. The possibility was left open that a government can determine eligible production by setting maximum purchases at support prices in its regulatory framework. China used this option to claim that its programs for 2020 implemented the recommendations and rulings of the DSB. We argue that use of outdated fixed external reference prices to measure the price gap and to define eligible production by limits on purchases, distance calculation under the AoA from economic support measurement. The measurement issues compound the discord among Members over levels of agricultural support.

Chapter 23, exclusively dedicated to labor protection, has been widely described as one of the most distinctive features of the new US–Mexico–Canada Agreement (USMCA). This paper challenges the current narrative surrounding the USMCA by critically analysing Chapter 23 of the agreement, looking at the legal innovative design of its substantive commitments of labour protection and their enforceability. In light of this objective, a comparative analysis will be conducted. The provisions of Chapter 23 USMCA will be compared with labour provisions in previous US Preferential Trade Agreements (PTAs), namely, the NAFTA side agreement on labour rights and the TPP. Second, a comparative analysis will be conducted comparing USMCA Chapter 23 with labour provisions in EU Trade Agreements negotiated with USMCA parties. The paper demonstrates that although the USMCA does not radically innovate from the level of substantive labour protection reached in recent US and EU PTAs, the enforcement mechanism in the USMCA is significantly strengthened, with controversial and innovative features.

Technical Barriers to Trade are on the rise at a time when the ghost of protectionism looms large across the world economy. They are allegedly trade restrictive and some of them are more burdensome than others, particularly to foreign suppliers. The leading question of this study is who embraces technical barriers to trade better than others and why. This study examines how different countries have reacted to the REACH regulations of the European Union and what factors have motivated some, if not all, of them to harmonize their domestic policies with REACH regulations. With a random-effects ordered logistic regression analysis, this study finds strong statistical support for two out of three diffusion mechanisms – that is, transnational communication and competition pressure for exports market. The causal relationship between intergovernmental institution and the level of harmonization is found statistically insignificant. These findings imply that technical regulations, if understood correctly through communication and/or motivated by strong commercial incentives, can create upward pressure for global regulatory harmonization.

In 2004, Morocco, Tunisia, Egypt, and Jordan signed the Agadir Agreement (AA), a free trade agreement with intention of encouraging closer cooperation in trade. The AA came into force in 2007 and relies on the EU's rules of origin. Contrary to existing explanations, which suggest that the little impact of the AA on intraregional trade is a result of the local political elites in the agreement and of weak state institutions, this article amends the concept of isomorphic mimicry to shed some light on the ineffectiveness of the AA. It claims that instead of acting as a vehicle for regional integration, the AA generated two capability traps: premature load bearing and the reproduction of the structural weaknesses of Arab Mediterranean economies. As a result, the AA does not act as an instrument of intraregional cooperation and inclusive growth.

The paper examines the global and regional implications of China's revitalized state capitalism model through the sectoral lens of the Chinese automotive industry, which stands at the intersection of both traditional and green industrial policy. At the multinational level, China skillfully facilitates local policy implementation that creates excess capacity by propping up local and national champions through convenient compliance with the WTO. At the bilateral level, China closely links purchasing and coercive diplomacy with protections for Chinese players both at home and abroad. Key endeavors like the Belt and Road Initiative open up overseas markets to develop global champions and secure foreign footholds for Chinese champions. Additionally, China's increasing reliance on exclusionary diplomacy provides political justifications to discriminate against foreign competitors within the Chinese market while moving forward with industrial upgrading of domestic players. When linked together, these factors – all byproducts of China's approach to state-led capitalism – combine to explain China's efforts to create a race to the top.

We look at the effect of the WTO on stabilizing international trade using both a fixed-effects and an event study approach. Our results show that WTO members experience lower trade volatilties in a predictable and integrated system. In addition, we focus on the trade volatility comovement among countries in a multilateral framework. Previous research has mainly focused on WTO membership in a bilateral trade framework, which only allows interactions between two trade partners without considering any possible influence from other countries. A bilateral trade framework does not fully capture the effect of WTO membership, nor does it investigate why the multilateral platform of the WTO should exist. With a unique setup estimating interactions among multiple trading dyads, we find strong evidence supporting positive correlation or comovement of trade volatilities across trading pairs. Such a comovement appears much stronger among WTO members than between WTO and non-WTO members. Due to the feedback mechanism among dyads in a multilateral framework, such as the WTO, bilateral trade stability may further stabilize the global trade. Our results remain robust to a battery of sensitivity checks.

The US complaint about Chinese tariff-rate quotas (TRQs) on certain grain products helps illustrate several key issues in US–China trade relations and the effectiveness of WTO disputes. First, do international obligations based on transparency and fairness work in relation to an authoritarian country not known for the rule of law domestically? Second, can there be a disconnect between the legal aspects of a dispute and the underlying economic interests, with a DSB ruling sometimes not leading to improved trade flows? And third, given the bilateral trade war and ‘phase one’ trade deal between the United States and China, has the WTO been superseded in this trade relationship? This paper summarizes the facts and law of the China–TRQs dispute, and examines each of these questions in that context.

The WTO SPS Agreement sets a framework of rules that encourages harmonization through international standards. However, there is a lack of empirical research at the macro-level on how such international standards affect trade flows. This study conducts a general impact analysis on one of the most widely used food-related international standards in the world, the ISO22000, accounting for the different product types and country groups. The Codex Alimentarius Commission, one of three sister organizations of the SPS Agreement, notably participated in developing this standard that is based on its Food Code, harmonizing the Hazard Analysis and Critical Control Points (HACCP) and Good Manufacturing Practice (GMP). This study employs recent developments in using the gravity model, along with uniquely employed additional specifications to enhance further the reliability of the estimates. Results show that ISO22000 diffusion negatively affects the exports of processed products that are the major export goods of developed countries. Primary and semi-processed products that compose the majority of developing country exports are not significantly affected, providing evidence against the concerns for the compliance burdens of developing countries when being certified to the standard. The burdens may depend more on the degree of processing of the exported goods rather than on a country's development status.

In order for one Member to implement trade remedies against another, it must be satisfied that the harm to its domestic industry was the result of imports, rather than some other factor(s). In order for a Member to be satisfied in this way, it must perform both: (1) a causal link analysis, and (2) a non-attribution analysis. In interpreting the relevant provisions concerned with the causal link and non-attribution analysis, the Appellate Body (AB) has consistently found that injury to the domestic industry need not be the product of imports alone – that is, it may be the result of a combination of imports and other factors. Accordingly, many commentators have queried the utility of separating imports from other causal factors at the non-attribution stage. This article argues that these two apparently contradictory positions may be reconciled if they are interpreted such that the causal contribution from imports must reach a minimum threshold, whilst also providing some tolerance for other factors. This article argues in favour of using econometric tests as a means of measuring and separating the causal contributions of imports vis-à-vis other factors and allocating responsibility to each. The article concludes by proposing a three-step non-attribution and causal link analysis.

This article examines how Japan has adapted economic statecraft to serve changing strategic aims through case studies of trade arrangements, official development assistance, and dual-use technology. After World War II, Japan continuously adapted these economic tools to pursue shifting non-economic goals related to international reintegration, comprehensive security, human security, and traditional security. More recently, in response to escalating US–China strategic competition, Japan has employed economic statecraft to simultaneously reduce international instability and to counter China in targeted ways as part of a broader hedging approach. First, Japan has attempted to bolster multilateral trade arrangements amid a volatile policy environment, while also using them to both engage and counter China. Second, Japan has used official development assistance to stabilize and build defense capacity in Asian countries facing pressure from China. Third, Japan has increasingly militarized its dual-use technologies to enhance its ability to respond to Chinese activity in outer space.

This article focuses on the manner in which the US identifies the exchange rate and macroeconomic policies of its key trading partners and the policy advice it gives to them, when according to the US set criteria the trading partner's exchange rate and macroeconomic policies contribute to the US trade deficit. The article focuses on the US apparatus that is set in two different pieces of US legislation concerned essentially with currency manipulation mainly from the perspective of the WTO and IMF legal regimes. The paper concludes that although the US regime concerns currency manipulation, and is implemented to address a compliance void under the IMF and WTO procedures, it is flawed and that the Reports prepared under the US legislation are not qualitatively enlightening.

The recent WTO dispute case, Korea–Import Bans, and Testing and Certification Requirements for Radionuclides, illustrates complex legal issues and significant political implications associated with the regulatory autonomy of a sovereign country under the WTO Agreement on Sanitary and Phytosanitary Measures (SPS Agreement). There has been constant tension between the sovereign right of a WTO member state to determine its own appropriate level of protection (ALOP) and the regulatory constraints imposed under the SPS Agreement to prevent abuse and disguised trade protection. The case emerged from this tension and raises questions on the extent of the regulatory autonomy in the application of an SPS measure. This article addresses these questions and examines the criteria for the qualitative standards for the ALOP, the question that the Appellate Body decision did not fully resolve. The criteria for the qualitative ALOP standards affect the regulatory autonomy significantly under the current SPS rules as they determine the manner and the extent to which a Member may meet the sensitive public interests in the application of an SPS measure. The article proposes a rational basis test to restrain abuse of SPS measures while preserving the regulatory autonomy protected under the SPS Agreement.

Typically, the WTO Arbitrator, when charged with evaluating the permissible level of countermeasures (suspension of concessions), has chosen a counterfactual state of the world where the challenged (illegal) measure has not been adopted at all. The Arbitrator then would calculate the trade lost because of the adopted (illegal) measure, and thus, decide on the level of permissible countermeasures. In US–Washing Machines (Article 22.6-US), deviating from this custom, the Arbitrator adopted a different counterfactual, assuming that the complainant had adopted a different, ‘reasonable’ measure. The Arbitrator then evaluated the trade lost based on the distance between the adopted (illegal) and the ‘reasonable’ measure and calculated the level of countermeasures. In this paper, we explain the multitude of perils facing dispute settlement if this approach is adopted in future disputes. We also advance a few thoughts on rethinking the workings of the Arbitrator when measuring the level of permissible countermeasures, since similar slippery slopes risk being reproduced in future cases.