WTO+ Commitments on services in Asian PTAs: The role of regulatory homogeneity and goods trade complementarity

Roy_Santa_working_paper

ASIA-PACIFIC RESEARCH AND TRAINING NETWORK ON TRADE Working Paper NO. 178| 2018 by Anirudh Shingal, Martin Roy and Pierre Sauvé

Abstract

This paper looks at the role of applied services regulations in accounting for WTO+ commitments on trade in services in preferential trade agreements (PTAs) among Asian economies. The empirical findings suggest that Asian trading dyads with regulatory frameworks that are more similar and more trade-restrictive tend to undertake higher levels of WTO+ commitments on services in their PTAs. There is also evidence in the results for such WTO+ commitments being driven by goods trade complementarities, alluding to the importance of supply chain dynamics in the region. Such results support the hypothesis that the heightened “servicification” of production generates a greater demand for lower services input costs and for certainty against possible new and disruptive services barriers.

Full text available via Researchgate

 

International Data Flows and Privacy: The Conflict and Its Resolution by Aaditya Mattoo and Joshua P. Meltzer

The European Union’s General Data Protection Regulation (GDPR) widens the scope and strengthens the enforcement of privacy standards. To protect privacy abroad, personal data is allowed out of the EU under strict conditions: if a non-EU country enacts privacy legislation equivalent to the GDPR, or if firms accept Binding Corporate Rules (BCR) or use Standard Contractual Clauses (SCC) for specific business deals. These conditions pose a challenge, particularly for developing countries. A GDPR-based national privacy law would impose the same high standard on all firms, even when they sell at home, leading to higher economy-wide costs of doing business. BCRs and SCCs have proved to be costly and time-consuming. While the GDPR may raise WTO issues, litigation cannot address the central challenge: preserving opportunities for digital trade while respecting countries’ chosen levels of privacy protection. An alternative approach would involve negotiating agreements under which data destination countries protect the privacy of foreign citizens in return for source countries committing not to restrict data flows, as in the EU–US Privacy Shield and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). In parallel, and as a step toward multilateralizing these agreements, countries would develop common privacy principles, building upon the work in the OECD and APEC.

https://doi.org/10.1093/jiel/jgy044

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Evolutive Interpretation by the WTO Adjudicator by Gabrielle Marceau.

Several types of changes can take place between the conclusion of a treaty and when its provisions call for interpretation, e.g. changes in the political, social, historical or legal context; technological changes; linguistic changes; or changes in the law. Traditionally, interpreters refused to consider changes that may have occurred since the treaty’s conclusion. Today, many argue that it is more legitimate for a treaty interpreter to take account of these changes and use an ‘evolutionary’ or ‘dynamic’ interpretation. The issue of changes is particularly relevant in the context of the World Trade Organization (WTO) Treaty, because it combines long-standing provisions with more recent ones, and because international trade has evolved greatly, notably with electronic trade (e-commerce) and new means of distribution that did not exist when the WTO was concluded. The different types of changes discussed in this article may be grouped into four non-mutually exclusive types of situations, which will be examined through the prism of the interpretation process set out in Articles 31-33 of the Vienna Convention on the Law of Treaties (VCLT). While different types of evolutionary interpretations can be considered under standard rules of interpretation in public international law, the use of the term ‘evolutionary interpretation’ allows for a more global understanding of the phenomenon, and might have, at the very least, a symbolic value.

https://doi.org/10.1093/jiel/jgy042

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Trade agreements, regulatory institutions and services liberalization

Many agreements to liberalize trade in services tend to be limited in scope. This is a puzzle considering the high share of services in total employment and value added and relatively high barriers to trade in services in many countries. In this paper we argue that neglected complementarities between services trade policies and domestic regulation may help to understand the limited ambition on services observed in many trade agreements. We show that the productivity effects of services trade liberalization are conditional on regulatory quality. Our findings suggest that greater effort to design trade agreements with a view to improving regulatory quality may be a necessary condition for deepening the services coverage of trade agreements and will enhance the welfare gains from services trade liberalization.

Full texthttp://librarydocs/_earticles/Trade agreements, regulatory institutions and services liberalization by Matteo Fiorini.pdf

Global Policy Volume 9 . Issue 4 . November 2018 https://doi.org/10.1111/1758-5899.12583

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Brexit : trade governance and legal implications for third countries by Martin Molinuevo.

The impact of Brexit on the trade relations of EU/UK with third countries is likely to entail an extensive process of amendment to the disciplines and sectoral obligations featured in their current multilateral and bilateral trade and investment agreements. At the WTO, the UK stance will require amending the current EU lists of concessions in a way that may lead to a broad renegotiation process. At the bilateral level, the status of current EU agreements regarding the UK and third countries is uncertain, as these agreements may no longer apply to the UK. Further, agreements on goods, such the customs union with Turkey, will no longer be valid for the UK. Least developed countries (LDCs) and developing countries who benefit from the EU Generalized System of Preferences (GSP) will continue under this regime, but that framework will no longer be applicable to the UK. In all cases, third countries who consider that Brexit has diminished the value of their commitments may request compensation or changes in the text of the agreements, or ultimately terminate the agreement. The process of amending the trade and investment agreements requires comprehensive knowledge of their trade and investment flows with the EU and the UK.

http://www.kluwerlawonline.com/document.php?id=TRAD2018026

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Brexit from a WTO/GATS perspective : towards an easy divorce? by Rudolf Adlung.

Virtually all studies dealing with the WTO-related aspects of Brexit, the United Kingdom’s (UK’s) envisaged separation from the European Union, tend to focus on the ramifications for merchandise trade. Services trade rarely enters the picture, reflecting an apparently prevailing view that the reallocation of the existing pre-Brexit obligations requires little more than some drafting changes. This article begs to disagree, arguing that there are a variety of complex legal issues involved. These are related, inter alia, to the conceptual broadening of the General Agreement on Trade in Services (GATS) beyond conventional cross-border trade to three more types of transaction and its extension, in addition to the treatment of products (services), to that of producers (service suppliers). The competitive conditions of foreign producers that are established within a Member’s territory are thus covered by the Agreement. With this in view, the article points out scenarios under which these producers are adversely affected by the termination of the UK’s single-market status and the ensuing (re-)introduction of restrictions on market access and national treatment under GATS Articles XVI and XVII and/or the (re-)appearance of regulatory impediments in bilateral trade. In turn, this might provide a basis for the home countries to seek compensation. The article also identifies GATS-scheduled limitations that, because of the Most-favoured-Nation principle, cannot be maintained in trade among independent WTO Members. Depending on their nature, the resulting adjustments might lead to compensation claims as well.

http://www.kluwerlawonline.com/document.php?id=TRAD2018031

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A Closer Look At WTO’s Third Pillar: How WTO Committees Influence Regional Trade Agreements by Devin McDaniels , Ana Cristina Molina & Erik N. Wijkström.

This paper illustrates how the work of World Trade Organization’s (WTO) standing bodies—its ‘Third Pillar’, as we will call it—is inspiring parties in regional trade agreements (RTA) negotiations and contributing to deeper integration. We focus on the work of the WTO technical barriers to trade (TBT) Committee and explore, as a case study, the extent to which the Committee’s decision on principles for development of international standards (the Six Principles) has shaped provisions in RTAs. This Decision, arguably the most important decision taken by the TBT Committee, is meant to clarify which international standards may be a relevant basis for TBT measures; an issue that has been left undefined under the WTO TBT Agreement. Our analysis covers 260 RTAs, and shows that one quarter of RTAs has sharpened and hardened the Committee’s decision by making it directly applicable to Parties (in RTAs) whereas under the WTO they are ‘merely’ recommendations. A small number of RTAs follow a different approach and explicitly name the sources of relevant international standards.

https://doi.org/10.1093/jiel/jgy038

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