WTO Trade Remedies in International Law

Their Role and Place in a Fragmented International Legal System

Roberto Soprano

• Publisher: Routledge
• Year: 2018
• ISBN:
  9781351747677
• Edition: 1
• Topic: Law
• Subtopic: Law Theory & Practice
• Index: Law

World Trade Organisation (WTO) trade remedies (antidumping, anti-subsidy and safeguard agreements) are instruments used by WTO members to counter the economic injury caused by dumping, subsidies and the sudden and unforeseen increased imports. They are exceptions to the WTO principle of free trade and to the prohibition for States to react unilaterally to protect their own rights and interests, and as a result they have been accused by some as being the new tools of protectionism.

This book analyses of the role and principles of WTO trade remedies in international law. In particular, it focuses on their aims, their structure, and their position within the WTO and more in general, the international legal system. The book considers trade remedies in light of fragmentation theories of international law and addresses the question how, and to what extent WTO law reflects and influences public international law.

1 Unilateral reactions within the multilateral WTO context

The case of WTO trade remedies

1.1. Introduction

Before analysing the role and place of WTO trade remedies in the international legal order, it is of utmost importance to broadly describe the history and evolution of self-help and unilateral reactions in international law. Such an approach will contribute to highlight the role of international law in limiting unilateralism in international relations.

Since the end of World War II, the international community has undergone significant changes. New players such as international organizations, non-governmental organizations, multinational enterprises as well as groups and individuals have played a more active role in the new scenario of our ‘global society’. States are no longer the only participants in the international community. Furthermore, interdependence among national economies and politics has increased intensively and States understand that ‘the flutter of a butterfly’s wings in China could, in fact, actually effect weather patterns in New York City, thousands of miles away’.

Such a modification of the international community has affected international relations and their legal framework and has led States to work together to find global solutions to global problems. As international players have got closer, unilateral actions and reactions have been replaced by multilateral efforts to avoid unilateral measures that could alter the equilibrium of the modern society and spread domino effects worldwide. However, in the field of WTO law, some forms of unilateralism still exist. These exceptions to the WTO multilateral approach are strictly limited and regulated by the WTO system. WTO rules limit the policy space of States to act and react unilaterally to protect their own interests.

1.2. Limiting unilateralism in international relations: from coexistence through cooperation towards a global community

Since the end of World War II, the international community has undergone significant changes. From a system primary based on individualism, force and wars, States created international organizations and decided to cooperate to achieve common ends.

States act daily on a unilateral basis and their acts produce effects, positive or negative, on other States and individuals. On the one hand, such unilateralism entails the influence of powerful States over smaller States, the imposition of policies and values and actions and reactions to defend or support own rights and interests. According to Sands, what is considered ‘unilateral’ is the action or the reaction which intrudes upon the interest of third persons to an inappropriate extent.¹ On the other hand, unilateralism has also positive effects in international law as it might ensure its enforcement in the absence of an effective sanctioning system. For the purpose of this study, unilateralism is considered as a form of reaction of States to defend their own rights and interests.

Cooperation and unilateralism have diverging objectives. As professor Dupuy noted,

a little as in football the state regarded as guilty of unilateralism is the one that does not play the collective game; the one that ‘plays personally’; in short, the one that puts the triumph of its interests before that of the collective interest, without even speaking of the ‘common good’.²

Cooperation has been the main objective of the evolution of international community and its legal system in the last centuries and was originally aimed at maintaining peace. It is probably one of the pillars of the modern idea of the international legal system as it is recognized in the UN Charter and several other binding and non-binding instruments³ to the extent that scholars considered it as the essence of contemporary international law.⁴

The transformation of international relations from bilateral to multilateral during the last century is one of the main reasons why cooperation prevailed over unilateralism. Historically, State relationships before 1945 were mainly regulated through normal diplomatic channels in the form of treaties. They provided bilateral rules by which States generally agreed to recognize reciprocal rights and duties and ensured peaceful coexistence among themselves.⁵ As society expanded and the links between States strengthened, international relations followed similar trends and responded to the needs of States to overcome eventual impasses caused by bilateralism. This was part of a greater idea based on which States should cooperate with each other within an institutionalized framework.⁶

A first step towards this direction was made through the founding of the League of Nations.⁷ Following the end of World War I, the United States, in primis, pushed for the creation of a permanent worldwide organization aimed at maintaining international peace and security through efficient and legally binding safeguards. One of Wilson’s 14 points was related to the creation of an international organization which should have constituted a centralized authority dedicated to achieving the ‘grand design’ of perpetual peace.⁸ In Wilson’s opinion, States had to create a forum where they could discuss and find solutions to their problems through peaceful means. Despite its very ambitious aims, the League of Nations faced limitations in its structure and political, economic and military discrepancies among participating countries that couldn’t stop the decline of international relations leading the world into another dark period of conflict. As pointed out by Cede, ‘the longing for peace and the prohibition of war as a means of international politics, although revolutionizing the minds, were not decisive by themselves’.⁹ The maintenance of peace required States to make real efforts to cooperate with each other in order to achieve common goals and avoid conflicts among themselves.¹⁰

However, in the inter-wars period, unilateralism in its broadest terms prevailed over multilateralism and cooperation and the interests of individual countries took over common interests. The start of World War II revealed the weaknesses of an international system which allowed States to act autonomously and independently in political, economic and military fields. This was exactly the opposite of what John Maynard Keynes stated in 1919. In Keynes’ opinion, the world needed a new system of international relations which would favour a global advantage and preclude the isolationism and protectionism that had been adopted by States in the period between the two wars.¹¹

Although the League of Nations failed in its goals, it represented an experience of infinite value for the creation of the United Nations. The idea of a global organization itself, the creation of the International Labour Organization and the Permanent Court of International Justice were examples of a form of cooperation among States that enabled countries to discuss, address and solve regional or widespread problems which could undermine the common purpose of maintaining peace and security. As remarked by eminent scholars, the institutionalized organization of the cooperation among States was not in a complete rupture with previous systems of international relations but it improved and evolved international cooperation itself.¹² The League of Nations did not want to transform international relations but develop them to achieve further integration among States.¹³ The outstanding lesson from the inter-wars period was that countries ‘cannot merely stand together, in a kind of negative passivism, but they must make real efforts to achieve common purposes’.¹⁴

At the end of World War II, global political and economic interdependence was high and the demand for future security and stability was expressed by all the participants in the conflict. A cooperative effort was necessary to end the war and it was clear even before the conclusion of the conflict that the management of peace afterwards had to rely on cooperation.¹⁵ In addition to enhancing relations among States, cooperation discourages States from acting unilaterally to pursue their advantages in disregard of the interests of other States. In line with these new theories, the founding of the United Nations marked an important stepping stone in the history of international relations through the creation of a permanent organization with universal character that had to ensure a system of collective security and a forum for international cooperation.¹⁶

Since then, international relations took place prevalently within an organized context and multilateral fora took over bilateral and plurilateral relations.¹⁷ International organizations were perceived as the best means to make States cooperate with each other in order to achieve common ends.¹⁸ As stated by Peter Sutherland, ‘the most important means available to secure peace and prosperity into the future is to develop effective multilateral approaches and institutions’.¹⁹ This form of multilateralism has been defined by Ruggie as ‘an institutional form that coordinates relations among three or more states on the basis of generalized principle of conduct’. This system ‘urges the governments to cooperate, to be in constant communication, to enforce the consistent, agreed upon international regulations and to take into consideration the effects of their policies on other states’.²⁰ As Vicuña underlined, such changes in international society during the past century have established ‘a pattern of evolution from the traditional forms of interstate relations to an increasingly institutionalized community of nations’.²¹

In the past decades, the form of multilateralism described above has been challenged by new economic theories, technological developments and political events that have modified the structure of the international community. The fall of the Socialist countries, the decolonization process, the growing importance of new industrialized countries such as Brazil, South Africa, India and China, internet, new technologies and means of transport have challenged at the basis the international community.²² Professor Jackson underlines that the terrorist attacks on 11 September 2001 seem to have created an ‘international relations atmosphere that demands greater international cooperation. Perhaps, some might say, this is a wakeup call to nations that might otherwise be tempted to indulge in unilateral measures without consideration of impacts on foreign societies’.²³ New players such as non-governmental organizations, multinational enterprises as well as groups and individuals have a more active role in the new scenario of our ‘global society’. States are no longer the only participants in the international community.

This modification of the international community has affected international relations and their legal framework. In fact, States and other entities should work together to find global solutions to global problems. Most of the pressing problems linked to the protection of the environment, terrorist attacks, immigration and human rights policies have obtained a global dimension. For example, the credit crunch in the United States caused unemployment in Europe and contributed to the food crisis in Africa. Similarly, the failures of States in former Yugoslavia caused immigration in Europe. Yet, wars in Iraq, Libya and Syria raised the price of oil around the world. In such an interdependent community, global problems require global solutions and global institutions and the place for unilateralism is even more limited.²⁴ Unilateralism simply cannot achieve global aims and the actual form of multilateralism requires a deeper and active involvement of the ‘global community’.²⁵

As noted by Iriye, the term global community is based upon a ‘global consciousness, the idea that there is a wider world over and above separate states and national societies, and that individuals and groups, no matter where they are, share certain interests and concerns in that wider world’.²⁶ In the absence of global government, global governance manages global processes.²⁷ The question that should be answered is whether or not current institutions can be the backbone of this new global society. Are they prepared to face the new challenges? As remarked by Kofi Annan, ‘[o]ur post-war institutions were built for an inter-national world, but now we live in a global world’.²⁸ Global society needs global governance and global rules.²⁹ Current structures and laws are often limited to particular aspects of international cooperation. They are purposed to address specific challenges within specific fields.

In a global society there is a nee...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• Foreword
• WTO and GATT Dispute Settlement Reports
• Introduction
• 1. Unilateral reactions within the multilateral WTO context: The case of WTO trade remedies
• 2. The relationships between international law and WTO law
• 3. Trade remedies in WTO and public international law
• Final remarks
• Bibliography
• Index