The Common Law of International Trade and the Future of the World Trade Organization Thomas Cottier CIGI Campus Auditorium, Waterloo Canada February 3, 2016 The National Centres of Competence in Research (CCR) are a research instrument of the Swiss National Science Foundation (SNSF) 6/22/2015World Trade Institute Berne1

6/22/2015World Trade Institute Berne2

Perceptions and Realities Doha Development Agenda stalling with minor results in December 2015 (Nairobi) Forum Shifting to PTA in particular TTIP, TTP, RCEP Multipolar World WTO and multilateralism increasingly perceived irrelevant No major protectionism during and after Financial and Debt Crisis ) New WTO Members (128 to 162) Central Role of WTO Dispute Settlement (more than 500 disputes registered since 1995) WTO Law is the Foundation of all modern RTAs 6/22/2015World Trade Institute Berne3

The Common Law of International Trade RTAs all structured on the basis of WTO law disciplines Shared values and principles Core legal concepts of tariffs, QRs, non-discrimination (national treatment) and exceptions Structure of agreements follow WTO law WTO-plus and sometimes WTO-minus Introduction of new areas (e.g. labour, environment, competition, investment, TK protection) 6/22/2015World Trade Institute Berne4

Dialectical Relationship Multilateralism and Preferentialism mutually supportive over time: –1883 and 1886 IPR Conventions (Paris and Berne) based upon set of bilateral agreements –GATT 1947 based upon US Reciprocal Trade Agreements –Preferential Trade in Services based upon 1995 GATS Agreement –TTIP /TTP/RCEP: Future Multilateralization in WTO to be expected ( ) 6/22/2015World Trade Institute Berne5

A Comparative Approach The experience of Roman Law and the Glossatores The formation of the Common Law The process of modern codification in Civil Law Modern federalism The evolution of EU Law All depending on strong central legal institutions, scholarship and civil society support 6/22/2015World Trade Institute Berne6

PTA Institutions With the exception of the European Union, CU and PTAs show weak institutional frameworks Lack of central bodies and secretariats Lack of dispute settlement experience and experienced infrastructure Mainly model of ad hoc arbitration (e.g. TTP chapter 28) 6/22/2015World Trade Institute Berne7

Splendid Isolation PTAs not well connected and concerted Jurisdiction limited to specific agreement, subject to Article 31 VCLT interpretation Conflicting rules create difficulties for regulating “behind the border issues” For example: GI protection in Canada in the quadrangle of TRIPs, NAFTA, CETA and TTP) 6/22/2015World Trade Institute Berne8

Towards a World Trade Court From Fragmentation to Coherence –Art. 3.2 DSU and the status of non-WTO law in dispute settlement –Potential of Article 25 DSU (Arbitration) –Expanding the jurisdiction of the WTO to Preferential Trade Agreements –Institutional implications and cost structures 6/22/2015World Trade Institute Berne9

Monitoring Existing Agreements in the WTO The evolution of the common law of international trade calls for stronger institutions beyond dispute settlement: Proactive role of the WTO Secretariat in monitoring existing agreements –TPRM –Dispute Settlement: A voice for the Secretariat and enhanced transparency –Guardian of the system: right to lodge consultations and complaints against failing members 6/22/2015World Trade Institute Berne10

Future Negotiations Due to decline of traditional MFN, market access negotiations will continue to take place in preferential fora and settings Negotiations on non-tariff barriers depend upon market size and spill-over effects CETA, TTP, TTIP Preferential negotiations excluded areas which would deploy free rider effects (e.g. disciplines on domestic support) 6/22/2015World Trade Institute Berne11

Unique Selling Propositions WTO member need to focus on USPs of multilateralism and related Organisations: –Multilateral Know-how and expertise of the WTO –Trade Community in Geneva and NGOs –Areas with MFN and strong spill-over effects: Conditions of competition (subsidies, IPRs, competition policy) Technical regulations, food standards, domestic regulation of services 6/22/2015World Trade Institute Berne12

Farewell to Trade Rounds With market access (tariffs, QRs) and services dealt with mainly preferentially, the rationale for trade rounds no longer exist Instead: Sectorial negotiations and on-going quasi legislative processes (building upon past experience: Financial Services, Telecom, GPA, Access to Essential Drugs) Integrated approach covering goods, services, investment, competition, government procurement (e.g. climate change mitigation and adaption) 6/22/2015World Trade Institute Berne13

Potential Sectors Energy: –Agreement on Electricity –Agreement on Fossil Fuels Agreement on Extracted Minerals Agreement on Specific Services, e.g: –Civil Aviation (Airlines) –Maritime Transports –Disciplines on Economic Migration beyond GATS Need to develop close working relationship with specialised international organizations 6/22/2015World Trade Institute Berne14

Horizontal Issues Trade Remedies for goods and services (unfair competition approach) for dumping and subsidization Trade and Investment Trade and Competition Policy (Anti-trust) Institutional issues: role of secretariat, extending jurisdiction to RTAs, cooperation with other IOs 6/22/2015World Trade Institute Berne15

Modifying Consensus Diplomacy The shift to PTAs is partly caused by rigidity within WTO talks Return to WTO talks requires more flexible attitudes Diplomacy should adopt consensus-minus as established under DSU and/or weighted voting Formally blocking consensus should be subject to vital interests, reasoned statements and need to confirmation upon cooling-off 6/22/2015World Trade Institute Berne16

Conclusions Integrated approach to trade regulation: towards a common law and the role of academic research and teaching Need to strengthen central institutions, in particular WTO monitoring and dispute settlement: extending jurisdiction to RTAs Sectorial negotiations Qualified consensus 6/22/2015World Trade Institute Berne17

Thank you for your attention 18 Journal of International Economic Law (2015) 6/22/2015World Trade Institute Berne18