Legal Problems of Making Regional Trade Agreements with Non-WTO-Member States

In pursuing regional economic integration with non-WTO-membereconomies, a WTO member must be aware that WTO compliance isunder question. An exchange of preferential treatment betweenthe WTO-member party and non-WTO-member parties gives rise toa violation by the WTO member of the MFN treatment obligationof the WTO Agreement. In the case of integration in the servicesector, consistency with WTO jurisprudence is guaranteed, whereasin integrating the goods sector, WTO consistency can only beguaranteed when the non-WTO-member parties are least-developedcountries. Furthermore in the TRIPs sector, the WTO complianceis not questionable only when the RTA reconfirms original rightsand duties arising under the TRIPs Agreement. Thus, in orderto be consistent with WTO jurisprudence, regional integrationagreements in the area of trade in goods need to be approvedby a two-thirds majority of the WTO members, before they comeinto force. Or, the WTO member could encourage the non-WTO-memberstate to join the WTO before their RTA comes into force. Onthe other hand, in the case of economic integration in the servicesector, as non-WTO-member status of any counterpart economiesdoes not act as a legal impediment, the WTO members may pursuemore active negotiations, while remaining consistent with WTOjurisprudence. In drafting and negotiating on IPR chapters underRTAs, WTO members must be vigilant not to mutually exchangea higher level of IPR protection than that stipulated underthe TRIPs Agreement.     

The Present and Future of The Investor-State Dispute Settlement Paradigm

While the World Trade Organization (WTO) system remains faithfulto the long-standing traditional paradigm of state-to-statedispute resolution, dispute resolution mechanisms in the areaof international investment are undergoing a radical change.Traditionally, the paradigm of ‘diplomatic protection’has served as a basis for the settlement of investment disputesamong states. In earlier commercial agreements, including theFriendship, Commerce, and Navigation Treaties (FCNs) concludedfrom 1940s to 1960s, the resolution of international investmentdisputes took the form of state-to-state dispute resolution.This paradigm shifted in the 1970s when direct investor claims,modelled on treaties that European countries had been puttingforward since 1959, were allowed under a series of bilateralinvestment treaties initiated by the United States. This shifthas been reflected in subsequent efforts to reach a multilateralagreement on investment (MAI) and in many free trade agreements(FTAs). Also, in the area of international human rights law,it is an increasing trend to allow an individual to have directrecourse to international human rights protection bodies, suchas the Human Rights Committee established under the InternationalCovenant on Civil and Political Rights, after the exhaustionof domestic remedies. The allowance of direct claims has helpedto make up for the typical shortcomings of the diplomatic protectionmechanism where, the espousing state has frequently exercisedexcessive discretion in deciding whether to advance claims dueto considerations of a political nature, unrelated to the particularcase, so that this mechanism can increase international friction.On the other hand, the strong point of diplomatic protectionhas been its capacity to screen out frivolous or dishonest claimsby individuals. The question whether various international disputesettlement mechanisms may eventually converge into an effectivesystem based on a direct claim procedure is a vexing one. Itis uncertain whether the model of investor-state dispute settlement(ISDS) can play a pioneering role in this ongoing process. Anypertinent answers to such questions require a thorough comparisonof the benefits and drawbacks of such a development. Lessonsfrom the experiences under the ISDS system and its modificationefforts should be fully taken into account so the newly emergingdispute resolution system will not lead to tension between nationsin an area where precedent is scant, but the need is great.     

Procedural Issues in the Anti-Dumping Regulations of China: A Critical Review under the WTO Rules

Since the World Trade Organization (WTO) was established, Chinahas made large-scale efforts to shape its trade remedy systemthrough legal and organizational changes. Through these changes,China could clarify the meanings of WTO anti-dumping provisionsincluding the provision relating to the definition of domesticindustry. Moreover, procedural disciplines on reviews were fortifiedin Chinese anti-dumping system. While the overall improvementsto the trade remedy system of China are evident, definitionsof several key legal terms, including the concept of "relatedproducers", the negligible import standard, and adjustment factorsfor a fair comparison between normal values and export pricesare still absent, and some legal problems relating to priceundertakings and the countermeasure system remain to be solved.China should continue to proceed with the task of clarificationand improvement of its trade rules.