Journal of International Trade Law and Policy

Publisher:: Emerald Group Publishing Limited
Publication date:: 2011-12-21

ISBN:: 1477-0024

Issue Number

Latest documents

Legality of export restrictions imposed during COVID-19 in international economic law
Purpose: This paper aims to examine options under the General Agreement on Tariffs and Trade (GATT) for exempting or justifying export restrictions or prohibitions that are in principle prohibited under Article XI:1 GATT. The paper begins by examining the exception under Article XI:2 (a) GATT, before going on to the arguments under GATT Article XX (b) and (j). In addition, the analysis considers the national security exception in Article XXI (b) (iii) GATT, given that WTO members have increasingly invoked this provision in recent years, as well as during the pandemic, when Namibia implemented COVID-19-related trade restrictions under the Agreement on Technical Barriers to Trade based on national security concerns. Design/methodology/approach: The impacts of the COVID-19 pandemic on trade have been far-reaching. Countries have attempted to place export restrictions on personal protective equipment and COVID-19 vaccines. Even though export restrictions are generally unlawful under the GATT, countries have decided it is necessary at this time. Members have relied heavily on the “national security” and “critical shortage” exceptions outlined in the GATT. Findings: This paper concludes that, depending on the circumstances of a particular case, a pandemic may constitute an emergency in international relations, as defined in Article XXI (b) (iii) GATT, and that, in such a situation, a WTO member may legitimately take action to protect its vital security interests. Originality/value: The paper provides an original conclusion based on WTO case law on an issue of contemporary relevance.
Indonesia’s nickel export restriction policy: alternative on environmental approach for Article XI:1 GATT justification
Purpose: This paper aims to analyse the aspects of the demonstration process of Indonesia's regulation on nickel export restriction for its eligibility to be excluded from Article XI:1 GATT. It also analyses the possibility of the use of an environmental approach in the demonstration process and for an alternative measure in its implementation. Design/methodology/approach: The paper uses a normative research method in conducting its analysis. It analyses Indonesia's nickel export restriction policy based on the European Union's claim regarding quantitative restriction, with the international trade governance in the WTO framework, and certain international trade principles. The study also involves certain WTO jurisprudence to give a comprehensive analysis to the case. Findings: This paper finds that Indonesia still needs to provide a complete and comprehensive demonstration to prove its eligibility for exclusion from Article XI:1. Demonstrating merely based on an economic approach is inadequate to convince the panel in Indonesia – measure relating to raw material for justification under Article XI:2. This study further finds that both parties generally focus on the economic aspect, which leaves room for conflict of interest. Other aspects with a lower probability of conflict of interest, such as the environmental approach, could be an alternative for the implementation. Originality/value: This paper fulfils the need to provide a scientific analysis of the application of Indonesia's nickel export restriction policy, including its proceedings in WTO's dispute settlement body, which is essential for international trade governance enforcement.
How “safe” is the WTO “safe haven”? A need to modernise disciplines for officially supported export credits
Purpose: This paper aims to draw attention to an urgent need for reform of the regulatory framework of the broader export credit system to ensure a new and comprehensive “safe haven” for officially supported export credits. The purpose is to analyse the complex debate on disciplines of the World Trade Organization (WTO) and the Organisation for Economic Co-operation and Development (OECD), creating a point of reference for future analysis of and debates around the “carve-out clause” of the Agreement on Subsidies and Countervailing Measures (ASCM) and a “safe haven” in a broader sense. Design/methodology/approach: This paper takes inspiration from legal, economic and political science literature on subsidies and officially supported export credits, as well as on legal documents related to the WTO and the OECD. It examines the WTO subsidy and the OECD export credits framework, focusing on main legal and economic governance aspects. Then, it gives a critical analysis how “safe” a “safe haven” in a broader sense might be, assessing frictions of and solutions for the fundamentally different set of disciplines, limitations, financial instruments not covered by OECD regulations, as well as new challenges related to climate finance. Findings: After assessing the challenges regarding the “carve-out clause” of the WTO subsidy framework and two tracks aiming to create a new “safe haven”, requirements for comprehensive disciplines for officially supported export credits are pointed out. Furthermore, several misunderstandings and mistakes appearing in the debate are clarified. Research limitations/implications: Desktop research rather than empirical field work. Practical implications: This paper creates awareness for governments and exporters how to deal with a complex system of interrelated disciplines. The question, how “safe” a “safe haven” in a broader sense can be, has not been resolved yet. Some authors focus on the WTO disciplines not taking into account the need for an effective matching procedure of the Arrangement on Officially Supported Export Credits (the Arrangement). Furthermore, the introduction of several new pre-export financing programmes and the growing significance of climate finance-related instruments for export credit agencies creates both opportunities and challenges. This paper can serve as a reference point for the academic debate and further research. This paper also offers newcomers to the topic a comprehensive overview. Originality/value: Although the “carve-out clause” and the Arrangement have been much discussed, there is limited literature review structuring both existing and new aspects of the debate, assessing (dis)advantages of arguments and interpretations. This paper both adds to the corpus of literature about the ASCM, as well as the Arrangement, and takes this corpus as the object of its analysis.
Provisions on frivolous claims in the European Union – Vietnam investment protection agreement – would they be benefits to Vietnam?
Purpose: This paper aims to examine two issues: whether provisions on frivolous claims in the European Union (EU)–Vietnam Investment Protection Agreement (EVIPA) would be Vietnam’s intrinsic demand, and to what extent, Vietnam may enjoy the benefits from these provisions. Design/methodology/approach: This paper combines both doctrinal legal analysis and policy research. It offers an in-depth case study of the provisions on frivolous claims in the EVIPA, compares them with those of other existing international investment agreements and arbitrations rules, examines how similar provisions in these instruments are interpreted in available practical international investment disputes, uncovers the Vietnam’s position through interviewing Vietnamese senior experts, who were members of the Vietnamese delegation negotiating the EVIPA, and through available collected data and then evaluates whether these provisions may be favourable to this country. Findings: While the new investor-state dispute settlement (ISDS) mechanism in the EVIPA can be viewed as explicit evidence of the EU’s achievement, it may also be Vietnam’s benefits to entertain new ISDS provisions on frivolous claims. They were drafted, based on the ISDS arbitration practice, states’ experience and actual situations in Vietnam. These novel provisions, among other things, serve as Vietnam’s prerequisites to consider whether to accept the new two-tier standing mechanism or not. The inclusion of such ISDS provisions in the EVIPA, therefore, is supposed to meet the Vietnam’s intrinsic demands for defending against unfounded frivolous cases. Originality/value: This is the first time the EU concluded an investment treaty containing innovative ISDS provisions with a developing country. This paper therefore may help envisage Vietnam’s perspective during its negotiation of provisions on frivolous claims in the EVIPA and prove that the avails of these provisions to a frequent respondent State like Vietnam can be realised. The paper’s findings mean for research in investment law as well as for policymakers as far as the frivolous cases are concerned.
Australian COVID-19 measures and its international investment obligations
Purpose: This paper aims to examine the prospect for international investment disputes in the aftermath of the COVID-19 pandemic due to measures implemented by the Australian government to tackle the pandemic. Design/methodology/approach: Doctrinal research. Contains qualitative analysis. Findings: This paper finds that claims based on the protections in the International Investment Agreements (IIAs) signed by Australia are unlikely to succeed and that Australia’s COVID-19 measures can be justified as necessary measures under the general and security exception clauses included in more recent IIAs and under customary international law. Originality/value: In the context of the COVID-19 pandemic, scholars have written papers apprehending possible claims by international investors against emergency measures adopted by host countries to face the pandemic which might also have damaged the interest of the foreign investors. The existing literature is too vague and general. To the best of the authors’ knowledge, this is the first paper that draws some specific conclusions in this regard applicable to the COVID-19 regulatory measures taken by Australia. While the existing literature projects the possibility of such investor claims, this paper argues that at least no such claim would succeed against the COVID-19 measures taken by Australia.
Australian COVID-19 measures and its international investment obligations
Purpose: This paper aims to examine the prospect for international investment disputes in the aftermath of the COVID-19 pandemic due to measures implemented by the Australian government to tackle the pandemic. Design/methodology/approach: Doctrinal research. Contains qualitative analysis. Findings: This paper finds that claims based on the protections in the International Investment Agreements (IIAs) signed by Australia are unlikely to succeed and that Australia’s COVID-19 measures can be justified as necessary measures under the general and security exception clauses included in more recent IIAs and under customary international law. Originality/value: In the context of the COVID-19 pandemic, scholars have written papers apprehending possible claims by international investors against emergency measures adopted by host countries to face the pandemic which might also have damaged the interest of the foreign investors. The existing literature is too vague and general. To the best of the authors’ knowledge, this is the first paper that draws some specific conclusions in this regard applicable to the COVID-19 regulatory measures taken by Australia. While the existing literature projects the possibility of such investor claims, this paper argues that at least no such claim would succeed against the COVID-19 measures taken by Australia.
China’s defense against secondary sanctions: lessons from the EU blocking statute
Purpose: With the rise of geopolitical tensions among the leading state actors, the Chinese citizens and companies are increasingly targeted by the unilateral restrictive measures. These frequently include the so-called secondary sanctions, i.e. penalties imposed on third parties for failing to comply with the sanctions regime, the US practice being a prominent example. The purpose of this paper is to analyze China's legal instruments related to imposition of and protection from unilateral restrictive measures of third countries. Design/methodology/approach: The present paper discusses China’s legal defenses counteracting the extraterritorial sanctions by comparison with the legislative and enforcement practices of the EU, which has accumulated substantial experience trying to shield its businesses from the US secondary sanctions. The paper identifies the differences between the two anti-sanctions regimes and highlights the key factors that will affect the future enforcement of blocking rules in China. Findings: When designing its anti-foreign sanctions legislation, China has considered similar legislation adopted by other jurisdictions, most notably – the EU blocking statute. The comparative assessment of the two blocking regimes reveals substantial similarities in legislative and procedural standards with important differences in enforcement capabilities and institutional frameworks. Originality/value: The paper represents one of the first attempts to anticipate the directions in enforcement of China's blocking legislation taking into account the EU experiences in this domain.
The regulations concerning the protection of the national security of the host country and the legitimate expectations of the foreign investments
Purpose: The purpose of this study is to examine the legal system that overrules these concerns within the body of the international investment laws. The question which remains is how can host countries and their ruling bodies maintain their national security without disregarding the legitimate expectations of foreign investments and their international responsibilities? Design/methodology/approach: Balancing the relationship between the national security of the host country and the legitimate expectations of the foreign investments is one of the oldest challenges within the body of the international investment laws because the realization of the right to maintain the national security, without regulating the host countries, leaves room for corruption, and meeting the legitimate expectations of the foreign investments can lead to the disruption of the national sovereignty of the host country. Findings: Studies show that the international investment laws do not take a clear stance when it comes to regulating the relationship between the national security of the host countries and the legitimate expectations of the foreign investments and that they are, in fact, in some cases, paradoxical and disorganized; there are instances of attempts to overprotect the national security of the host country, while the rights and the benefits of the foreign investments are disregarded, Originality/value: At times there is an attempt to expand the realm of legitimate expectations of the foreign investments which would, in turn, disrupt the national security of the host country.
The regulations concerning the protection of the national security of the host country and the legitimate expectations of the foreign investments
Purpose: The purpose of this study is to examine the legal system that overrules these concerns within the body of the international investment laws. The question which remains is how can host countries and their ruling bodies maintain their national security without disregarding the legitimate expectations of foreign investments and their international responsibilities? Design/methodology/approach: Balancing the relationship between the national security of the host country and the legitimate expectations of the foreign investments is one of the oldest challenges within the body of the international investment laws because the realization of the right to maintain the national security, without regulating the host countries, leaves room for corruption, and meeting the legitimate expectations of the foreign investments can lead to the disruption of the national sovereignty of the host country. Findings: Studies show that the international investment laws do not take a clear stance when it comes to regulating the relationship between the national security of the host countries and the legitimate expectations of the foreign investments and that they are, in fact, in some cases, paradoxical and disorganized; there are instances of attempts to overprotect the national security of the host country, while the rights and the benefits of the foreign investments are disregarded, Originality/value: At times there is an attempt to expand the realm of legitimate expectations of the foreign investments which would, in turn, disrupt the national security of the host country.
The effects of Indonesia’s technical barriers to trade on manufacturing exports: an empirical analysis using the pseudo-Poisson maximum likelihood method
Purpose: The purpose of this study is to investigate the effects of Indonesia’s technical barriers to trade (TBT) on manufacturing exports. Design/methodology/approach: This study uses the UNCTAD database to calculate the coverage ratio and frequency index of TBTs, which represent the restrictiveness of TBTs on imports. The effects of TBTs are estimated using the gravity model (Tinbergen, 1962) and the pseudo-Poisson maximum likelihood methodology (Santos Silva and Tenreyro, 2006, 2011). Findings: An estimation on the manufacturing sector shows that TBT reduces Indonesia’s manufacturing exports. However, the effect of TBT is different in disaggregated manufacturing sector. TBT is found to reduce exports of chemicals and transportation but increase exports of metal and textiles. This finding supports the empirical evidence that TBT can create trade-impeding and demand-enhancing effects on trade flows. The negative effect of TBT on chemical and transportation exports implies that the cost of compliance is higher than the increasing demand rate. This finding suggests the need for policy evaluation and improvements for restrictive TBT. As Indonesia is still highly dependent on imported inputs, restrictive TBT can potentially reduce the productivity of the Indonesian manufacturing sector. Originality/value: This study aims to investigate the effects of TBT in Indonesia, as a manufacturing-based economy that relies heavily on imported intermediate inputs. Furthermore, this study contributes to the literature by using country-specific techniques and aggregated and disaggregated manufacturing sectors as subjects for study. Meanwhile, previous studies use multi-country and multi-product approaches and focus on the aggregate sector. This study estimates the effects of TBT on the disaggregated sector, given its high share of imported inputs and reliance on export-oriented industries. TBT is constructed in a more detailed product level (HS-4 digit level) to provide more accurate results.