US–China trade war and the WTO dispute settlement mechanism

Author:Tolulope Anthony Adekola
Position:School of Law, City University of Hong Kong, Kowloon, Hong Kong
Pages:125-135
SUMMARY

Purpose The paper is prompted by the US-China trade war and its implications for the sustenance of the multilateral trading system. The two rivals resorted to “self-help” without recourse to the World Trade Organization (WTO) dispute settlement system, flouting the WTO as an adjudicator in trade disputes. This paper aims to analyze the drawbacks in the settlement system and examines the... (see full summary)

 
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USChina trade war and the WTO
dispute settlement mechanism
Tolulope Anthony Adekola
School of Law, City University of Hong Kong, Kowloon, Hong Kong
Abstract
Purpose The paper is prompted by the USChinatrade war and its implications for the sustenanceof the
multilateral trading system. The two rivals resorted to self-helpwithout recourse to the World Trade
Organization (WTO) disputesettlement system, outing the WTO as an adjudicator in trade disputes. This
paper aims to analyze the drawbacksin the settlement system and examines the urgent need for a retroactive
remedy.
Design/methodology/approach This paper adopts desk-review and jurisprudential analysis of the
relevant rulings of the WTO dispute settlement body. Using desk-review, primary sources such as the
relevant domestic legislations invoked by the USA and China to trigger the trade war were discussed and
criticallyanalyzed.
Findings This paper nds that the unilateraland protectionist actions that characterize the trade warcan
be linked to the loss of condence in WTO remediesto redress membersretroactive economic losses. This
nding is useful in arguing for the incorporation of a retrospective monetary remedy to forestall the
reoccurrenceof a similar trade war and save the WTO from being dysfunctional.
Originality/value Although, whetherthere should be retroactive remedies in thesettlement system has
been long debated, this paper makes a signicant contribution by highlighting why the drawbacks in the
settlement system have become so prominent in the context of this trade war. This paper strengthens the
urgentneed for WTO dispute settlementreform to prevent a reoccurrenceof another globaldistortion of trade.
Keywords Unilateralism, International trade, US-China trade war, WTO dispute settlement reforms
Paper type Research paper
Introduction
The need to normalize international trade through a regulated multilateral trading system
was brought to the fore after the Second WorldWar when it was recognized that the beggar-
thy-neighbour tariff policiesof the 1930s had formed part of the remote causes of the brutal
war (Crowley, 2003, p. 42). The WTO, which succeededthe general agreements on tariff and
trade (GATT) in 1995, was formed to regulate international trade and prevent an outbreak
of another trade war.
The WTO was established to primarily serve three key purposes. The rst was to
provide a regulated stage for members to consult and negotiate their trade agenda[1]. The
second was to ensure that no member nation is discriminated against in terms of trade[
1
].
The third was the provision of a functional adjudicatory system to allow for settlement of
trade disputes to forestalltrade wars[
1
].
In a bid to strengthen the multilateral trading system, the dispute settlement
understanding (DSU) in its Article 23 stresses the need for parties to resort to the
multilateral dispute settlement mechanism within the WTO in the event of any perceived
impairment or nullication of their rights by another WTO member. The essence of this
The authors would like to acknowledge the contributions of Assistant Prof. Xing Lijuan to the initial
draft of this paper and the supervision of Associate Prof. Wenwei Guan.
USChina
trade war and
the WTO
125
Received7 February 2019
Revised1 April 2019
2 May2019
14May 2019
Accepted15 May 2019
Journalof International Trade
Lawand Policy
Vol.18 No. 3, 2019
pp. 125-135
© Emerald Publishing Limited
1477-0024
DOI 10.1108/JITLP-02-2019-0011
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1477-0024.htm

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