Measures restricting data flows outside one's borders, including mandatory data/server localization measures, are not only a barrier to trade, but also largely ineffective in achieving better internet security or trust. Nevertheless, governments deploy such measures, primarily on grounds of cybersecurity and privacy, potentially violating their obligations under the General Agreement on Trade in Services (GATS). In this article, I investigate whether GATS-inconsistent measures may be justified under GATS Art. XIV when aimed at ensuring privacy or cybersecurity, and, if so, whether GATS Art. XIV effectively balances trade and internet policy. As the internet governance framework is complex and somewhat ambiguous, applying GATS Art. XIV to cybersecurity/privacy measures necessitates balancing of trade liberalization principles and domestic internet policy. This exercise can be effective in weeding out data localization measures disguised as privacy/cybersecurity measures, particularly by employing relevant technical and factual evidence. However, given the lack of binding international law/norms on these issues, GATS Art. XIV has a limited role, particularly in cases involving direct conflict between multistakeholder/transnational internet norms and domestic internet policies, or where the measures are founded on contentious standards/benchmarks on privacy/cybersecurity. Ultimately, ensuring free and secure data flows requires a multidimensional policy response, including strengthening linkages between trade law and internet governance.

This article deals with a challenge in drafting regional trade agreements (RTAs) in services that has been widely ignored to date: the need to comply with, and ensure consistent use of, GATS-based framework provisions. This includes in particular the requirement for the RTA parties to eliminate substantially all discrimination between their services and service suppliers. Yet the criteria that are used in individual agreements to identify the benchmark services and service suppliers quite often depart from relevant GATS provisions (Article V on economic integration in combination with Article XVII on national treatment). These departures may not only affect the WTO/GATS-compatibility of the RTAs concerned, but contribute to further fragmenting international market conditions. This is particularly unfortunate at a time when regional agreements are the only realistic options to overcome the negotiating stalemate at multilateral level. Hence, given the stakes involved, there is an urgent need for participants to (re-)consider the framework provisions underpinning their RTAs.

The paper reviews the disciplines for tackling regulatory divergence in services included in 23 PTAs entered into by China, the EU, Japan, and the USA. It identifies a remarkable expansion in the number and extent of disciplines on regulatory transparency, regulatory coherence, and regulatory cooperation compared with GATS, which, subject to adequate implementation, will allow these agreements to deliver a degree of market integration well beyond what could be achieved simply by removing market access restrictions and discriminatory measures from the rule book. However, the paper calls for some restraint when estimating the potential impact of these disciplines, mainly because of the soft language used for phrasing some of them and the anticipated high implementation costs, particularly for countries with unsophisticated domestic legal systems.

Our annual gathering in Florence (8 and 9 July 2019), generously sponsored by the European University Institute, amidst the crisis at the WTO, was business as usual. Trading nations continue to entrust the WTO dispute settlement system with the adjudication of their disputes. The conference covered a very healthy number of disputes across different subject matter, ranging from antidumping duties to protection of public health.

This article introduces the various trade impacts of fossil fuel subsidies. There are large direct and pass-through trade impacts. Direct trade impacts are found when producer subsidies affect the markets for crude energy products such as crude oil, natural gas, and coal. Direct trade impacts are also found when consumer subsidies decrease the input costs of various industries, whether they refine crude products into energy carriers (e.g. gasoline, electricity) or they use energy products to produce non-energy products (e.g. iron and steel, plastics). Pass-through trade impacts are found when upstream fossil fuel subsidies lead to a lower-cost product that is then used in downstream production processes. We find that markets for fossil fuels, refined energy products and energy-intensive products are enormous. In 2018, crude fossil fuel exports were worth at least US$1.3 trillion, petroleum product exports at least US$800 billion, and exports of energy-intensive goods at least US$1.3 trillion. Their trade volume and export value, as well as their competition density highlight that fossil fuel subsidies have a direct impact on who wins and who loses in terms of market share.

In July 2014, Indonesia implemented a safeguard tariff on galvalume, a type of galvanized flat-rolled steel. Chinese Taipei and Viet Nam challenged the measure, mainly claiming that Indonesia's administering authority failed to satisfy various substantive and procedural requirements of the GATT 1994 and the Safeguards Agreement. The Panel and AB found that the tariff was not a safeguard measure but rather was a simple increase in Indonesia's applied rate. Interestingly, Viet Nam, the largest import supplier, is a member of a free trade area with Indonesia, meaning Viet Nam is not subject to the MFN rate. Viet Nam's preferential tariff treatment likely influenced Indonesia's decision to claim the action was a safeguard. Ironically, even though the Appellate Body essentially rejected its claims, the ruling benefits Viet Nam.

It has long been established in theory that uncertainty impacts on firm behaviour. However, the empirical basis for quantifying the uncertainty-reducing effects of trade agreements has not been firmly established. In this paper, we develop estimates of the effect of reducing uncertainty regarding regulation of foreign services markets by making commitments that are bound under a trade agreement. Specifically, we identify the effect on services trade of services trade restrictions, as measured by the OECD's Services Trade Restrictiveness Index (STRI), and the separate effect of ‘water’ in binding commitments, as assessed by the difference between countries’ commitments under the General Agreement on Trade in Services (GATS) or free trade agreements (FTAs) and applied levels of market access, as captured by STRI scores. Using a gravity model, we find that services trade responds positively but inelastically to reductions in services trade barriers, as measured by the STRI and, in our preferred regression, the response to actual restrictions is more than twice – specifically 2.4 times – as strong as the response to comparable reductions in uncertainty, as measured by water. Moving from GATS commitments to FTA commitments leads to a 4.7% increase in services trade because of the reduction in uncertainty.

The WTO concluded in 2012 that subsidized aeronautical research and development (R&D) gave Boeing a head start in product development that caused serious prejudice to the interests of Airbus but later, in 2019, it could not decide how long that head start had lasted. Meanwhile, the WTO concluded in 2018 that launch aid for Airbus aircraft led to innovations that also improved later aircraft models, thereby contributing to serious prejudice to the interests of Boeing. Both conclusions relied on a causation analysis that considered the effects of technological innovation, which makes subsidies used for R&D particularly vulnerable to challenge. This novel analysis may be too broad for the actionable subsidy disciplines of the SCM Agreement.

This text presents the first systematic quantitative descriptive and explanatory account of World Trade Organization (WTO) member states’ compliance with their one-time and regular notification obligations. The system of around 170 notifications, through which states are obliged to provide to the WTO relevant information on their policies, constitutes a key mechanism of transparency in the global trade regime. Based on data for the one-time and regular obligations from the years 1995–2014, we seek to map and explain the variation in the degree to which states comply with these obligations. Descriptively, we identify enormous differences in the compliance values of states, ranging from compliance well above 80% to below 20%. To explain those differences, we test five theoretical explanations that concentrate on the trade policy preferences of states and on their institutional characteristics. The empirical findings support four of the tested explanations. In particular, they highlight the relevance of states’ administrative capacities and membership in international organizations (IOs). In addition, the empirical analysis shows that compliance levels are strongly positively connected with the economic size of the members.

Oil prices fell from around $US110 per barrel in 2014 to less than $US50per barrel at the start of 2017. This put enormous pressure on government budgets within the Gulf Cooperation Council (GCC) region. The focus of GCC economic policies quickly shifted to fiscal reform, including the removal of domestic subsidies on energy products. In this paper, we use a dynamic Computable General Equilibrium (CGE) model to investigate the economic impact of the gradual removal of subsidies on refined petroleum and electricity, with specific reference to the Kingdom of Saudi Arabia (KSA).

Our study shows that removing subsidies eliminates a large distortion in the economy. This improves the efficiency of resource use, so that even though employment and capital in most years fall relative to baseline levels, real GDP rises. In addition, we show that fully-funded compensation payments offset the increases in energy prices, leaving economic welfare of the Saudi-national population little affected. Removing the energy subsidies leads to an improvement in the net volume of trade, while leading to a mixed outcome for industries.

In the aftermath of the 2008 global financial crisis, European Union regulators introduced the mechanism of ‘third-country equivalence’ for non-European financial institutions to access the EU internal market. This article evaluates for the first time the GATS-consistency of the European rules on third-country clearinghouses. Through this exercise, the article sheds light on the tension between financial regulation and WTO law, exploring how these two different disciplines can be reconciled. Building on the international economic law principles of non-discrimination and transparency, the analysis reveals that the European financial regulation could negatively impact the access of smaller countries to the EU market. The regulation in question is assessed under the GATS Article VI (Domestic Regulation), Article II (MFN), Article VII (Recognition), and the Annex on Financial Services prudential carve-out. The findings of the European case study indicate that the vast flexibility that trade law has delegated to national regulators possibly has adverse effects on the liberalization of financial services. The article concludes that if WTO Members do not derogate from their GATS obligations and commitments, the stability of the financial system would not be jeopardized, while the prospect of international integration would be increased.

The United States – Anti-Dumping Measures on Certain Oil Country Tubular Goods from Korea (US–OCTG (Korea)) Panel decision concerned the latest in a long line of antidumping (AD) disputes about Oil Country Tubular Goods. It was notable for a broadly permissive approach by the Panel – on all major legal issues but one, the Panel sided with the United States over Korean objections. The case itself was also notable for the US reversal of a negative preliminary determination, something that had occurred in less than 1% of prior cases. Finally, the case was notable for unusual behaviour outside of the investigative process, including both vocal political complaints and a curious decision by Korea not to appeal. We discuss the legal determinations made by the Panel and offer a new interpretation of how to think about whether AD practices are justifiable. We also describe the broader diplomatic context in which Korea and the United States interacted and consider the implications if political pressures play an increased role in determining dispute outcomes.

This paper analyzes the impact of the presence of foreign missions on trade using Turkey's unique expansion in its foreign embassy network (39 new embassies in 8 years) as the source of variation in a panel data setting. A majority of the existing empirical studies use cross-sectional bilateral trade data due to lack of variation over time (Rose, 2007; Moons and Bergeijk, 2013). Employing a panel data analysis, this paper is able to address the endogeneity issues that are associated with a standard cross-sectional analysis. The dependent variable in the paper is the trade between Turkey and 190 countries for 2006 to 2016. The results indicate that presence of an embassy increases export value by 30% and this increase comes mainly from the volume effect. Categorizing goods by the Rauch (1999) classification shows that the increase in differentiated goods exports is the main driver of the export surge. The number of exporting firms increases by about 8%. There is no statistically significant impact on the exports of homogeneous goods. Replication of the analysis for imports suggests no impact on imports.

This article fills a gap in the literature by quantifying impacts of fossil fuel subsidy reform on trade (inflow and outflow) in an oil-producing, “almost small”, economy, using Kuwait as an example. It employs a two-region economy-wide model with oligopoly behaviour in a general equilibrium framework. The model embodies unique elements of Kuwait's economic structure, idiosyncratic rigidities, and distortions, including oligopolistic industrial structure and labour markets. Simulations show that energy subsidies have minimal effects on trade and on non-energy exports, largely due to the pervasiveness of oligopolies that sustain large markups and their collusive pricing. Reforming energy subsidies generates higher pro-trade effects if implemented during low (not high) oil prices because its negative effects are partially offset by efficiency gains and reduction in oligopoly markups. Yet, contrary to claims by proponents of reforms, these effects remain largely constrained unless appropriate incentives are introduced. These results have important policy implications. In developing oil-exporting economies with pervasive oligopolies, microeconomic reform can be a channel through which to achieve pro-trade effects of energy subsidy reform. Further, benefits beyond export expansion, such as higher economic efficiency, could be better motivators of energy subsidy reform in oil economies.

This article discusses the decision of the Panel of the World Trade Organization (WTO) in the EU–Energy Package dispute between the Russian Federation and the European Union (EU) and certain of its Members. This decision is an important milestone in the history of the WTO. First, it presents a good example of how international economic disputes concerning politically sensitive matters, such as energy security, may be resolved in a pragmatic way, by adhering to multilateral trade rules of the WTO. Second, as the first WTO decision to address a Member's regulatory regime for natural gas, it reminds the WTO community that energy trade is not an alien subject for the WTO. In this article, we discuss some of the Panel's findings that may have significance for other similar cases, and examine the implications of these findings for the EU's internal gas market and energy security. The Panel's decision is currently under appeal with a ruling by the WTO Appellate Body not expected before the end of 2019. Hence, the outcome of this dispute remains uncertain.

The article analyzes how Brazil has become an increasingly active voice for liberalization within global spheres of agricultural governance. With the focus on domestic institutional developments, we identify the gradual materialization of an agro-export policy network consisting of public and private actors. We conduct a periodization of the overarching phases of the policy network's development, from its incipient formation during the Uruguay Round to a high degree of organizational refinement in the new millennium. Through analysis of its external linkages, internal structure, and the distribution of resources, we examine how this network became an absolutely central factor in spurring the offensive orientation and assertive engagement of Brazil within the global agricultural policy arena. We thereby provide a domestically rooted explanation for the rise of Brazil as a central agricultural ‘player’, with the focus on the collective agency capacity of public and private stakeholders.

This article discusses the ambiguity found in the WTO Anti-Dumping Agreement concerning price suppression analysis. Previous case law has established that investigating authorities undertaking to highlight price suppression must conduct a counterfactual analysis. This article examines the difficulties that investigating authorities face in performing such an analysis when the investigating period overlaps with a financial crisis or other abnormal economic circumstances. It suggests that the Appellate Body was correct to require consideration of how profit margins and costs are affected by market circumstances, but ought to pay further attention to the behavior of firms in imperfectly competitive markets.

The suspended provisions of Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTTP will not substantially affect the Trans-Pacific Partnership (TPP) Chapter 17 on State-owned enterprises (SOEs). As a consequence, the original TPP scheme remains an important treaty model and poses complex questions notwithstanding a growing literature. This article discusses TPP but unlike current writings which focus on comparative treaty methods of SOE regulation, we focus on how TPP/CPTPP will actually operate, paying attention to how its framers have defined an SOE not least in how they have viewed complex crossholdings, excluded non-profits, and preserved a role for State monopolies. Our answers differ from some of the existing literature – particularly on complex cross-holdings. We also provide detailed illustrations of how TPP's non-discrimination, commercial basis, and non-commercial assistance rules might work and comment on the chances of a rule cascade triggered by TPP, particularly in the current state of heightened Sino-American rivalry and allegations of State control in China's economy.

The objective of this study is to investigate the effects of trade barriers and cultural distance on the domestic market share in the film industry. We analyze panel data with both two-stage least squares and instrumental-variable methods. These methods can separate the effects of time-invariant measures of trade barriers and cultural difference from country-specific effects. This improvement in the estimation method and the use of a more appropriate measure of trade barriers in the film industry enable us to produce empirical results that are consistent with theoretical arguments. Based on the panel data collected from 30 countries for the period 2001–2013, the empirical results herein indicate that the cultural distance, as well as market size, is an important factor for the domestic market share. Trade barriers are also shown to be a significant factor, but the magnitude of their impact on the domestic market share is much smaller than that of the market size.

For a long time, the use of intermediate products in production has been growing more rapidly in most countries than domestic production. This is a strong indication of more interdependency in production. The main purpose of input-output analysis is to study the interdependency of industries in an economy. Often the term interindustry analysis is also used. Therefore, the exchange of intermediate products is a key issue of input-output analysis. We will use input–output data for this study that the author prepared for the new ‘Handbook on Supply, Use and Input–Output Tables with Extensions and Applications’ of the United Nations. The supply use and input–output tables contain separate valuation matrices for trade margins, transport margins, value added tax, other taxes on products and subsidies on products. For the study, two input–output models were developed to evaluate the impact of fuel subsidy and taxation reform on output, gross domestic product, inflation and trade. Six scenarios are discussed covering different aspects of the reform.