Petros C. Mavroidis

Beyond the WTO? An Anatomy of EU and US Preferential Trade Agreements

This Blueprint looks in detail at all the provisions of all the PTAs signed by the EC or the US and other WTO members. Henrik Horn, Petros C. Mavroidis and Andre Sapir find that Europe and the US have adopted different approaches to PTAs; however, both powers may also be seeking to project their priorities.(This abstract was borrowed from another version of this item.)

It’s a Question of Market Access

In this paper, we argue that market access issues associated with the question of the optimal mandate of the World Trade Organization should be separated from nonmarket access issues. We identify race-to-the-bottom and regulatory-chill concerns as market access issues and suggest that the WTO should address these concerns. We then describe ways that WTO principles and procedures might be augmented to do so. As for nonmarket access issues, we argue that as a general matter these are best handled outside the WTO, and that, while implicit links might be encouraged, explicit links between the WTO and other labor and environmental organizations should not as a general matter be forged. We view this as a measured approach to labor and the environment within the WTO.

The Case for Tradable Remedies in WTO Dispute Settlement

In response to concerns over the efficacy of the WTO dispute settlement system, especially in regard to its use by developing countries, Mexico has tabled a proposal to introduce tradable remedies within the Dispute Settlement Understanding. The idea is that a country that has won cause before the WTO, and who is facing non-implementation by the author of the illegal act but feels that its own capacity to exercise its right to impose countermeasures is unlikely to lead to compliance, can auction off that right. The attractiveness of this idea is that it offers an additional possibility to injured WTO members to get something from the dispute settlement mechanism without putting into question the legal nature of the existing contract, that is, the predominantly decentralized system of enforcement in the WTO. Examining all disputes brought to the WTO since its inception, the authors find some support for Mexicos perception that developing countries face a practical problem when they attempt to carry through with effective retaliation within the WTO system. And based on the formal results of Bagwell, Mavroidis, and Staiger (2003), they describe arguments that lend some support to the efficacy of Mexicos proposed solution from the perspective of formal economic theory.

To B(TA) or Not to B(TA)? On the Legality and Desirability of Border Tax Adjustments from a Trade Perspective

This paper asks two questions concerning Border Tax Adjustments for climate purposes, when viewed from a trade perspective: First, under what conditions are BTAs possible in the WTO-world? To address this issue, the paper provides a detailed discussion of the relevant law and case law. We also apply our main conclusions on what we consider to be paradigmatic cases of measures to address climate change where trade concerns are raised. We conclude that the WTO regime is no major obstacle to those aspiring to use BTAs, although the allocation of the burden of proof could be an issue. The second issue addressed is whether the economic literature on the desirability of BTAs adequately reflects concerns that have been raised in the trade policy community. Here we conclude that it has hardly addressed these concerns at all. We also point to some aspects of BTAs that would be important to take into account in a more complete analysis.

Driftin' too far from shore - why the test for compliance with the TBT Agreement developed by the WTO Appellate Body is wrong, and what should the AB have done instead

Following years of silence, the WTO Appellate Body (AB) issued almost simultaneously three reports dealing with issues coming under the aegis of the WTO Agreement on Technical Barriers to Trade (TBT). The three Panel reports were hard to reconcile, and this feature in and of itself made the task of the AB quite onerous. Some progress has been made and some clarifications have been introduced, but overall the AB has yet to come to grips with a coherent approach regarding the understanding of the TBT Agreement. The main argument in this paper is that the AB, in designing its test for consistency with the TBT Agreement, did not do any different than it would have done had no TBT Agreement existed. It is, nevertheless, response to the question ‘what has the TBT added to the pre-existing legislative arsenal’ that should point to the elements that must be included in developing a test of consistency against which disputes coming under the aegis of the TBT Agreement should be discussed. The suggested approach consists of a two-tier test whereby Panels would first inquire into the innate characteristics of a measure coming under the aegis of the TBT Agreement, before asking the question whether it has also been applied in non-discriminatory manner.

Embracing Diversity: Plurilateral Agreements and the Trading System

Plurilateral agreements in the WTO context allow sub-sets of countries to agree to commitments in specific policy areas that only apply to signatories, and thus allow for ‘variable geometry’ in the WTO. Current WTO rules make it much more difficult to pursue the plurilateral route than to negotiate a preferential trade agreement outside the WTO. We argue that this is inefficient from a global welfare and trading system perspective and that WTO Members should facilitate the negotiation of new plurilateral agreements on regulatory matters.

No Outsourcing of Law? WTO Law as Practiced by WTO Courts

This article provides a critical assessment of the corpus of law that the adjudicating bodies of the World Trade Organization (WTO)—the Appellate Body (AB) and panels—have used since the organization was established on January 1, 1995. After presenting a taxonomy of WTO law, I move to discern, and to provide a critical assessment of, the philosophy of the WTO adjudicating bodies, when called to interpret it. In discussing the law that WTO adjudicating bodies have used, I distinguish between sources of WTO law and interpretative elements. This distinction will be explicated in part I below. Part II provides a taxonomy of the sources of WTO law, and part III a taxonomy of the interpretative elements used to illuminate those sources. Part IV concludes.

Always look at the bright side of non-delivery: WTO and Preferential Trade Agreements, yesterday and today

The disciplining of Preferential Trade Agreements (PTAs) by the WTO has been ‘relaxed’ recently as a result of the new context (the Transparency Mechanism ) within which notified PTAs are being multilaterally reviewed. This is probably a blessing for a number of reasons, including the success of the multilateral trading system in bringing tariffs down over the years (and the ensuing reduced trade diversion), the fact that modern PTAs deal with many non-trade issues as well (for which no WTO disciplines exist), and the recent empirical literature suggesting overall positive welfare implications for those participating in similar schemes. This paper discusses these and other reasons to support the view that the WTO should rather focus on the multilateral agenda instead of diverting its attention towards disciplining PTAs. In more concrete terms, this paper argues in support of the thesis that the Transparency Mechanism should not be simply a de facto substitute of the previous regime (where outlawing a PTA could not a priori be excluded), but the de jure new forum to discuss PTAs within the multilateral trading system, at least for the time being. A first do-no-harm-policy is one of the rationales for the thesis advocated here.

The law and economics of contingent protection in the WTO

In this important book, three of the leading authors in the field of international economic law discuss the law and economics of the three most frequently used contingent protection instruments: anti-dumping, countervailing measures, and safeguards. When discussing countervailing measures, the authors also discuss legal challenges against prohibited and/or actionable subsidies. The authors’ choice is mandated by the fact that the effects of a subsidy cannot always be confined to the market of the WTO Member wishing to react against it. Assuming there are effects outside its market, an injured WTO Member can challenge the scheme as such before a WTO Panel. Taking the three agreements for granted as a starting point, the book provides comprehensive discussion of both the original contracts, and the case law that has substantially contributed to the understanding of these agreements.

What are the Main Challenges for the GATS Framework? Don't Talk About Revolution

Our analysis focuses on whether future changes in the GATS regulatory framework might eventually provide better outcomes in terms of trade liberalisation. We start our analysis by providing a succinct overview of the GATS framework of rules and principles, focusing in particular on the implementation of that framework so far. Then, we focus on three issues — public services, safeguards and domestic regulation — that may have important implications for the GATS regulatory framework. In doing so, we do not call into question the negotiating agenda as it has been established by negotiators and instead provide an evaluation on its merits. In two cases — safeguards and domestic regulation — the negotiating mandates are well established, while in the third case — public services — although no formal negotiation has been envisaged, the issue as such has the potential to influence negotiating outcomes in key sectors, such as education, health, postal, energy and environmental services.In our view, the best solution to the ‘public services’ conundrum is not a drastic reduction of the scope of GATS by excluding specific sectors from its provisions. Instead, increased awareness of the stakes involved in the liberalisation of socially sensitive service sectors may help WTO Members shape their commitments in light of their political, social and economic interests in those sectors. In the case of safeguards, after providing an analysis of the main arguments for such a mechanism, we show that the existing framework can adequately take care of concerns arguing in favour of temporary protection. Unlike the negotiations on safeguards, no WTO Member seems to question the desirability of developing further disciplines on domestic regulation as they are understood by the GATS. After analysing the case for horizontal disciplines, we conclude that such a horizontal approach should be complemented without delay with a sectoral approach that could cater for specific regulatory problems not being addressed in the Article VIA work programme. In our view, there are good reasons to try to complement the horizontal approach with a sectoral focus that would likely take the form of additional commitments under Article XVIII GATS