Volume 5 (2016): Issue 2 (December 2016)

The proliferation of Preferential Trade Agreements (PTAs) and Regional Trade Agreements (RTAs) has given rise to significant debate on the need to measure, understand and possibly regulate the impact these agreements have on the multilateral trading system under the umbrella of the World Trade Organization (WTO). This article will discuss the two Doha Transparency Mechanisms (legal transparency) regarding regional trade agreements, as they appear in two General Council decisions from 2006 and 2010. I will argue based on a closer look and a consistent interpretation of Paragraph 10 of the Doha Ministerial Declaration that there is another type of transparency that is relevant to the discussion on PTAs/RTAs, namely “internal transparency.” “Internal transparency stricto sensu” highlights the significance of trust in the WTO institutional processes, such as negotiations, decision-making, dispute settlement and trade monitoring that the representatives of developing member states should have in order for the WTO system to function productively. “Internal transparency lato sensu” is introduced in this article as an extension to include any decision-making deficits, exclusionary and asymmetrical outcomes specifically in the area of unchecked Preferential Trade Agreement proliferation. Instead of a conclusion, the article offers some proposals for more a meaningful progress in the WTO with respect to PTAs/RTAs The proposals aim at raising the profile of both legal and internal of transparency and posit that raising the profile of one will inevitably lead in improvements in the other.

This article posits a new taxonomy and framework for assessing regulatory coherence in the new generation of mega-regional, cross-cutting free trade agreements. Using the Trans-Pacific Partnership as the primary example, this article situates the rise of regulatory coherence within the current trade landscape, provides clear definitions of regulatory coherence, and argues that the real engine of regulatory coherence lies in the work of international standard setting organizations. This work has been little examined in the current literature. The article provides a detailed examination of the mechanics by which the Trans-Pacific Partnership promotes regulatory standardization and concludes with some normative implications and calls for future research.

The United States concluded free trade agreements (FTAs) with Korea, Peru, Panama and Colombia in late 2000s. Since the four FTAs were negotiated and concluded largely contemporaneously, key traits and characteristics of the agreements are similarly formulated. In light of this, dispute settlement mechanisms (state-to-state dispute settlement proceedings, investor-state dispute settlement proceedings, and Joint Committees) of the four FTAs also share commonalities. At the same time, new ideas and suggestions are explored in the four FTAs. While issues and disputes under the four FTAs have arguably not been ripe for the constitution of dispute settlement proceedings under the FTAs at the moment, sooner or later they are likely to end up in the dockets of the respective proceedings. The key elements of the four FTAs’ dispute settlement mechanisms are also adopted in other FTAs that the United States have concluded afterwards including most recently the Trans-Pacific Partnership, since these elements are reflective of the general scheme of the United States in their FTAs. What remains to be seen is how the general scheme of dispute settlement proceedings can be applied and implemented in actual settings when the FTAs produce increasing numbers of disputes in the future. In particular, marked disparity in human and financial resources between the United States and the four FTA’s parties may bring about disparate impacts and consequences among contracting parties. Continued attention needs to be paid to the development concerning implementation of the four FTAs, in particular their dispute settlement proceedings.

The proliferation of bilateral investment treaties and investment chapters in trade megatreaties and the associated increase in the preference of investors for investor-state dispute settlement has given rise to concerns that the regulatory sovereignty of both developed and developing states might be compromised. In response to these concerns many trade agreements (including the recently concluded Comprehensive Economic Trade Agreement between the European Union (EU) and Canada) have incorporated provisions designed to protect the regulatory sovereignty of nation states, especially in relation to labour standards, public health, phytosanitary and environmental protection. This paper examines the nature and scope of environmental protection measures in investment chapters and attempts to analyse the extent to which these measures will, in practice, prevent challenges by investors seeking to chill or prevent environmental regulations which might threaten their investments. The analysis concentrates particularly on measures based on the precautionary principle and uses the current EU restrictions on neonicotinoid pesticides as a case study. The paper concludes that the measures included in investment chapters designed to prevent such challenges by investors will not necessarily achieve the desired level of protection for environmental regulatory sovereignty.

Mega-Regionals are transforming and shaping the future of international investment law, concerning both the settlement of investment disputes and the substantive disciplines governing investor-state relations. Focusing on the latter, the present article shows how Mega-Regionals depart from the so far dominant European model of investment protection by going beyond crudely worded post-establishment protections for foreign investment. Instead, Mega-Regionals pursue the twin policy goals of investment liberalization through greater market access commitments and strengthening state control by ensuring host governments sufficient space to regulate in the public interest. In light of these policy goals, and considering the deeper reasons for structural changes to the investment rules in Mega-Regionals, the article argues that the models and conceptual foundations of Mega-Regionals build on prototypes first developed in the context of U.S. and NAFTA investment practices. This suggests that the future of international investment law will be shaped to a considerable extent against the background of U.S. experiences, rather than be forged anew by the mechanics of international diplomacy and negotiation.

This article identifies 8 key lessons for those States contemplating a free trade agreement with the United States (U.S.) arising from Australia’s experience. The standards of intellectual property protection under the Australia-U.S. Free Trade Agreement and their impact on pharmaceutical prices in Australia are a particular focus. Prospective parties must first conduct a national interest self-assessment which reviews the desired strength of intellectual property protection under national law and their preference for using flexibilities available to them under the existing international intellectual property rights framework. The United States negotiates free trade agreements in light of previous ones, negotiating outcomes obtained in other fora and the decisions of international trade tribunals. Negotiations typically occur behind closed doors, which is a process having adverse implications for transparent decision-making, public consultation periods and contributions from interested non-governmental actors. A concluded agreement will build on prior treaties and influence the course of future international arrangements. But the impact of a United States free trade agreement is not always clear, including because of a lack of reliable data, and the extent of national legal change is a contested issue given existing reform agendas and external influences. The United States seek to redesign national health care systems in its own image and had little success in Australia’s case. National legal systems need not be harmonised: although there can be some convergence in intellectual property rights regimes, significant differences may also remain. Negotiators must reconcile competing cultures, philosophies and perspectives between States for a free trade agreement to be worthwhile.

The negotiation of trade in services in the context of a free trade agreement is particularly challenging for developing countries in view of the diverse nature of the services sector, the broad regulation applicable to the supply of services, the different modes of supply and the different approaches available for the adoption of the rules governing bilateral trade in services. Two main approaches are available for these negotiations, the General Agreement on Trade in Services (GATS) model or positive list approach, and the North American Free Trade Agreement (NAFTA) model or negative list approach. Even though these two models are similar with respect to the substantive obligations covering the conditions for supplying services, they differ significantly with respect to the manner and the structure of commitments.

Chile faced significant challenges in concluding a free trade agreement with the United States. The importance of the trading partner and its market for Chilean exports meant that Chile had to adopt a number of unfamiliar features, particularly in relation to financial services and e-commerce, in order to facilitate and consolidate the process of opening its market. This article focuses on the chapters of the United States-Chile Free Trade Agreement addressing trade in services, i.e. cross-border trade in services, financial services, telecommunications, temporary entry of business persons and some provisions on e-commerce. Some investment issues will also be address, particularly those interacting with cross-border trade in services. Finally, the article explains the relevance of this approach as a model or basis for bilateral and plurilateral negotiations on trade in services for the Pacific Rim countries and as the preferred model for services trade liberalization for the Latin American countries.

This article provides an overview of the recently concluded Trans-Pacific Partnership Agreement (TPP), a treaty the parties have described as comprehensive and ambitious, yet also representing a balance of competing interests. The article focuses on the TPP’s chapters relating to investment, services, intellectual property and regulatory coherence, each of which provides insight into the motivations that drove the conclusion of the TPP and the negotiating dynamics that determined its final content. In areas such as investment, the TPP takes a more balanced approach than many earlier agreements, providing greater safeguards for the regulatory autonomy of states while still embodying core protections for foreign investors. In relation to intellectual property and services, the TPP goes beyond earlier agreements in several key respects, such as preventing the imposition of local presence requirements for service providers or requiring longer copyright terms than those demanded by other international treaties. The TPP chapter on regulatory coherence is one of the most novel features of the treaty, as regulatory coherence is not frequently included in earlier trade agreements, demonstrating the increased focus of states on addressing regulatory barriers to trade and investment. While all of these elements of the TPP are interesting in their own right, given the number and size of the parties involved in the agreement, they also provide valuable guidance about the direction of other ongoing and future preferential trade agreement negotiations, such as the proposed Transatlantic Trade and Investment Partnership (TTIP) and Trade in Services Agreement (TiSA).

The European Union (EU) and the United States are currently negotiating a free-trade agreement, the so-called Transatlantic Trade and Investment Partnership (TTIP). These negotiations have to be seen in perspective, since a number of other - bilateral and plurilateral - trade deals are being pursued at the same time. All these negotiations point to a worrisome aspect: the World Trade Organisation’s failure to come to a meaningful agreement in the Doha-round negotiations, in terms of market access, new rules and development. Like the Trans-Pacific Partnership (TPP), TTIP would stand out among the crowd of trade agreements because of the sheer volume of trade and investment flows across the Atlantic and the declared intention to boost regulatory cooperation and compatibility which is expected to bring the bulk of TTIP’s economic benefits. However, the prospect of concluding such a transatlantic agreement raises many concerns; the public in the European Union and the United States fears that TTIP could undermine existing levels of protection in areas such as health and the environment and impinge on either side’s “right to regulate”. Moreover, questions are being posed as to what TTIP would mean for the multilateral trading system and how it would affect third countries, especially developing countries. Against this backdrop, this article addresses the following issues in relation to TTIP: the vision underlying the negotiations; the European Commission’s negotiating mandate; the structure of the negotiations and their state of play; the Union’s competence for concluding TTIP and whether it is shared with EU Member States; and finally TTIP’s impact on the multilateral trading system and developing countries.

This introduction explores the historical changes in the trade policies of the United States (U.S.), namely, the shift from the support of multilateral rules to the embracement of regional trade agreements and provides an overview of the political and economic considerations behind the conclusion of the major U.S. free trade agreements.