Rethinking the (CP)TPP as a Model for Regulation of Chinese State-Owned Enterprises

ABSTRACT This paper challenges the widespread view that the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) provides the most advanced rules for regulating China’s state-owned enterprises (SOEs). It argues that compared to China’s existing World Trade Organization (WTO) obligations, particularly those specifically tailored to it, the CPTPP SOE chapter does not provide more rigorous or workable rules but rather has narrower applications and more carve-outs. More recent US/EU free trade agreements (FTAs) are largely based on the CPTPP SOE chapter. While these FTAs also seek to address some deficiencies in the CPTPP SOE chapter and gradually expand the rules on subsidies and SOEs, the expanded rules are balanced by the inclusion of extensive exceptions. This balanced approach may be used to facilitate multilateral negotiations of SOE rules, but if this approach is adopted, WTO Members will need to be prepared to negotiate with China on replacing the potentially very broad and rigid China-specific WTO rules with more balanced new rules that apply to all members. The likely consequence would be softer rather than stronger disciplines on Chinese SOEs.

Research Handbook on Feminist Engagement with International Law

ABSTRACT This review analyzes the efficacy of the collection in engaging with international law through the lens of feminist jurisprudence. The editors have compiled a diverse collection that applies feminist thought to varying topics of international law, including economic topics that do not obviously lend themselves to feminist engagement, that demonstrates the benefits of such analysis. The handbook effectively illustrates the potential for feminist thought to apply broadly to international law topics and provides a path forward for continued engagement with feminist theories in international law.

Regulation of Special Economic Zones Through Regional Trade Agreements: Confronting the Synergy Issue

ABSTRACT Special economic zones (SEZs) and regional trade agreements (RTAs) are frequently used by states as policy tools to promote economic development. As SEZs and RTAs overlap in geographical coverage and regulation areas and are implemented in parallel, they could create profound synergies. As there is no specialized international legal framework for SEZ regulation, and national SEZ laws seldom touch upon the synergy issue, SEZ regulation is largely left to RTAs at the international level. Yet, existing SEZ-related provisions in RTAs almost exclusively focus on trade in goods and appear insufficient in addressing the synergy issue—especially ‘new synergies’ created by ‘advanced SEZs’ and ‘deep RTAs’. To properly address the synergy issue, states should treat SEZ policy-making and RTA rule-making in a coordinated way and consider adopting a regional or multilateral approach in SEZ regulation.

The WTO Agreement on Subsidies and Countervailing Measures and Unilateralism of Special Economic Zones

ABSTRACT Many governmental incentives unilaterally offered in special economic zones affect competition in international markets and thus fall within the scope of the World Trade Organization’s Agreement on Subsidies and Countervailing Measures. Until very recently, products made in such zones could face countervailing duty investigations abroad on a charge of improper subsidization. In 2019, the World Trade Organization issued its first ruling focusing on the legality of certain special economic zone subsidies. In particular, the panel in India—Export Related Measures found fiscal preferences under an Indian scheme to be prohibited export subsidies. This article examines the status of special economic zone incentives under the multilateral subsidy regime, discusses the relevant anti-subsidy practice, and identifies ‘risky’ and ‘safe’ types of support measures that constitute unilateralism of zones in promoting economic activities.

A Pareto-Improving Compensation Rule for Investment Treaties

ABSTRACT Investment treaties grant foreign investors legal rights to compensation for losses caused by certain host state conduct. Many states are reconsidering their involvement in these treaties because they perceive the risks to outweigh the benefits. We start from the normative premise that participation in investment treaties should benefit both ‘host’ and ‘home’ states. Using a law and economics approach, we model a variety of common fact scenarios that arise in investment treaty arbitration. Our modelling demonstrates that being party to an investment treaty does not necessarily benefit a host state. The objective of mutual benefits would be achieved if investment treaties were modified to provide only the minimum protection necessary to solve time inconsistency problems for the host state and, thereby, deter opportunistic conduct. The treaties should not place wider constraints on legal and policy change. Our specific proposal is that a state should only have to compensate the investor if it breaches or modifies the domestic legal regime governing the investment and that compensation should be the lesser of the investor’s loss and the host state’s gain from the host state not having had the new legal regime in place when the investment was made.

Settling Interstate Trade Disputes: Lessons from the EFTA Complaints Procedure

ABSTRACT When the European Free Trade Association (EFTA) was founded 60 years ago, the contracting parties established a dispute settlement procedure that sought to strike a balance between the need to supervise compliance with the EFTA Convention and the need to respect the sovereignty of the member states. The procedure of Article 31 empowered the EFTA Council to hear interstate complaints, establish examining committees, issue recommendations, and authorize retaliation. This article investigates the successes and failures of this mechanism on the basis of historical documents from the EFTA archives. It provides an overview of the complaints that were brought under Article 31 and analyses how the Council exercised its functions in dealing with these cases. The article evaluates why the complaints procedure quickly fell into disuse, finding that it failed to provide a real alternative to ordinary discussions in the Council. The article argues that lessons can be drawn from this understudied chapter of European integration, concluding that systems of dispute settlement in international economic law should avoid fusing diplomatic and judicial elements if this might preclude an independent evaluation of the legal questions raised in the context of a concrete dispute.

Environmental and Human Rights Counterclaims in International Investment Arbitration: at the Crossroads of Domestic and International Law

ABSTRACT Recently, environmental and human rights (EHR) counterclaims in investment arbitration have attracted much attention as a vehicle to recalibrate the investor–state relationship. However, until now, successful instances of EHR counterclaims have been admittedly rare. As explained in this paper, some of the major barriers to EHR counterclaims in investment arbitration, and some of the concerns associated with them, are rooted in the domestic law basis of such counterclaims. Contrary to the position of several commentators, this paper argues that the grounding of EHR counterclaims on international law is neither practical nor beneficial, and EHR counterclaims are necessarily based on domestic law. Therefore, when investment arbitral tribunals adjudicate EHR counterclaims, they essentially act as an alternative to domestic courts. This has several implications. First, on questions of jurisdiction and admissibility of EHR counterclaims, decisions of states and arbitral tribunals essentially turn on the pros and cons of having these claims adjudicated by investment arbitral tribunals as opposed to domestic courts. Second, weaknesses in domestic rules, including the difficulty of holding shareholders accountable, would carry over to EHR counterclaims. Such problems can only be efficiently tackled at the level of domestic law. Third, as revealed from the inconsistent decisions in Perenco and Burlington on the merits of the environmental counterclaims, having investment arbitral tribunals adjudicate domestic law-based EHR counterclaims may cause certain concerns. For EHR counterclaims to play a more beneficial role, decision-makers must bear in mind these factors and concerns when taking their policy choices.

Retooling the Sustainability Standards in EU Free Trade Agreements

ABSTRACT The EU’s weak promotional policy towards sustainability in its free trade arguments is up for revision. Labour and environmental standards need to be tightened. They were given a boost on balance by a remarkable panel ruling of January 2021 in the long-standing EU–Korea labour dispute. Compliance ought to be subject to regular dispute settlement between governments. Sanctions must be added to the EU’s toolbox, going beyond trade retaliation. Private stakeholders should become more involved in monitoring and enforcement, both at the international and at the domestic level. All this will put an extra responsibility on the EU and its Member States to protect their labour force and the environment as well.

Brexit and Trade Defence: Effects of a Changed Territory

ABSTRACT After the UK’s withdrawal from the European Union (EU), the EU’s trade defence measures no longer applied to the territory of the UK. This means that the UK now applies its own trade defence measures and has transitioned some of the EU’s trade defence measures. The EU applies its trade defence measures to the reduced territory of the EU27, while third parties that had imposed trade defence measures against the EU now apply them against the EU27 and the UK. This article analyses the compatibility of these changed measures with WTO law. It argues first that in principle WTO law allows changes in the territorial scope of trade defence measures if the investigation and imposition of the measures remain attributable to the imposing WTO Member. This defends the EU’s and the UK’s approaches. Second, changed circumstances’ reviews or adaptations of the measures by the EU or the UK may be necessary. However, this happens rarely and only if specific evidence is provided. Third, subject to review or adaptations where warranted, third countries can apply their measures targeting the EU against the EU27 and the UK.