China's Influence on Non-Trade Concerns in International Economic Law

Paolo Farah, Elena Cima

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781317167198
• Edition: 1
• Topic: Law
• Subtopic: Law Theory & Practice
• Index: Law

This volume examines the range of Non-Trade Concerns (NTCs) that may conflict with international economic rules and proposes ways to protect them within international law and international economic law. Globalization without local concerns can endanger relevant issues such as good governance, human rights, right to water, right to food, social, economic, cultural and environmental rights, labor rights, access to knowledge, public health, social welfare, consumer interests and animal welfare, climate change, energy, environmental protection and sustainable development, product safety, food safety and security. Focusing on China, the book shows the current trends of Chinese law and policy towards international standards. The authors argue that China can play a leading role in this context: not only has China adopted several reforms and new regulations to address NTCs; but it has started to play a very relevant role in international negotiations on NTCs such as climate change, energy, and culture, among others. While China is still considered a developing country, in particular from the NTCs' point of view, it promises to be a key actor in international law in general and, more specifically, in international economic law in this respect. This volume assesses, taking into consideration its special context, China's behavior internally and externally to understand its role and influence in shaping NTCs in the context of international economic law.

1
Introduction and Overview

Paolo Davide Farah

The motivating idea for this project is to explore the range of Non-Trade Concerns (NTCs) that may conflict with international economic rules with a specific focus on how China can play a decisive role in these matters. If, on the one hand, this volume looks at the tensions between trade and non-trade values through the Chinese experience, on the other, it contextualizes this analysis within the broader framework of public international law.

Public international law appears highly fragmented, as different treaties and rules, which often express different values, increasingly overlap. Although the goal of multilateral trade agreements and that of the treaties and institutions promoting different values do not inherently conflict, the norms adopted to achieve them might come into conflict, and, in practice, tensions do exist. In particular, norms with distinct objectives – such as sustainable development, environmental protection, public health, product safety, food security, consumer protection, the right to food, and the right to water – might affect trade patterns, or, conversely, changes in trade flows influence and possibly jeopardize the realization of such norms.

Tensions do exist not only between each state’s conflicting obligations, but among states as well, since their priorities differ considerably. With regard to NTCs, developing countries do not have the same approach as developed ones. Public opinion and policy-makers in industrialized nations fear that a further liberalization of international trade may undermine or jeopardize policies and measures protecting a variety of non-trade values and react by increasingly resorting to trade restrictions. On the other hand, developing countries and, even more so, the least-developed ones have more pressing concerns to address, and tend to look at many of the trade measures introduced by developed countries to address NTCs with distrust if not with resistance or dissent, because they suspect such measures often hide protectionist goals. Moreover, developing countries see these measures as an attempt by developed countries to impose their social, ethical, or cultural values and preferences. The key challenge is finding ways to satisfy the right of developed nations to grant social values the degree of protection they consider appropriate, while minimizing the negative effects in terms of market distortion for their trading partners.

Prior to China’s accession to the World Trade Organization (WTO), many cautioned that its integration would not only be long and difficult, but possibly damaging to the Organization itself as well as its Members. In view of preventing this outcome, some experts decided to tackle the challenge of integrating China in the world trading system by focusing on the country’s market access concessions, tariff reductions, and liberalization requirements. A second group of scholars placed more emphasis on transparency issues instead, such as legal and administrative policies that China should adopt to ensure equitable and efficient resolution of trade disputes. Per contra, the issue of the potential influence of China’s WTO accession on NTCs has rarely been addressed in a comprehensive manner. Interestingly, though, the country’s influence in this area is now becoming more and more evident in the geopolitical context, considering the impact that China has had not only at the WTO but in other international fora as well, often in combination with the BRICS countries (Brazil, Russia, India, China and South Africa) and other developing countries.

This volume is organized into four parts. Each part deals with a different area or cluster of areas where non-trade values somehow intersect with international rules governing world trade. Given the key role China is playing in drawing new rules of the game in many of these areas, the authors in each part have tried to evaluate the country’s internal and external strategies, always keeping in mind its distinctive and unique characteristics.

In his introductory chapter, Paolo Davide Farah sets out a reliable analysis of the key issues in international economic law, which are then further analyzed in the subsequent contributions in this volume. The author first examines the role China plays at the crossroads between its right to development and its essential role in taking into account NTCs while pursuing a sustainable model of development. The author then offers a non-exhaustive, yet insightful, overview of NTCs – such as environmental protection, public health, food security, human rights, and the interplay between cultural products and public morals – exploring their integration in the multilateral trading regime of the WTO.

Part I Public policy, international trade, and foreign direct investment: The role of states and non-state actors in economic globalization

Part I looks at the links between public policy, international trade, and foreign investment, focusing on the roles played by both the state and non-state actors in China in the context of economic globalization.

Claudio Di Turi addresses the highly debated issue of the relevance of the fundamental principles and rights concerning labor in the context of the globalization of the economy. The author focuses on the practice of the ILO and the WTO showing that, although the two legal subsystems of international trade and human rights evolved in reciprocal indifference, they both pursue the same goal, i.e. the promotion of social justice. Ultimately, neither human rights law nor trade law can completely foster human dignity on their own. Against the backdrop of a comprehensive analysis of the law and practice of the WTO, as well as the difficulties surrounding the WTO Doha Round of negotiations, the author defends the thesis that WTO Agreements should be interpreted in coherence with human rights rules.

Angelica Bonfanti explores whether and how corporate social responsibility contributes to ensuring that multinational corporations (MNCs) that operate in China comply with human and social rights and environmental protection laws. Since an international treaty specifically regulating MNCs’ activities has never been adopted, in order to assess Chinese international obligations in this field, the author chooses to examine the framework of the main international obligations binding China with regard to human rights, as well as environmental and social rights protection. In evaluating whether China has correctly adapted its domestic law to accommodate the international obligations undertaken and has put in place the necessary measures to ensure compliance with such obligations, the author emphasizes the notion of the “harmonious society” (hexie shehui).

Leïla Choukroune investigates the development of a China-specific public interest litigation (PIL) that illustrates, and simultaneously challenges, the justiciability of socio-economic rights in an authoritarian regime. After exploring the roots of the recent Chinese movement, the author addresses its limitations, which are inherent to the Chinese legal system: the lack of an independent judiciary, a legislative process that does not reflect the will of the people, the frequent and arbitrary repression of rights defenders, and the systematic promotion of mediation as the best alternative to dispute settlement. The author argues that, despite these limitations, the emergence of the Chinese PIL shows that Chinese citizens have exercised their legal tools at the right time, with the result of having generated innovative judicial activity fostered by novel civil society activism.

Valentina Sara Vadi adopts an international investment law approach to explain the rise of Chinese bilateral investment treaties (BITs) while investigating the social, cultural, and environmental consequences of China’s investment treaty–making program. The latter has become a key component of China’s development policy, and, like other emerging economies, China has gone from a mere recipient of investment flows to a leading source of FDIs. The emerging role of China as a capital exporter contributes to the current debate about the interplay between international investment law and non-economic issues. If China wishes to become a great global power, it must take non-economic concerns into account, and therefore it is in the country’s best interest to negotiate more equitable BITs. Against this backdrop, the author questions whether or not Chinese BITs can provide a new paradigm and promote sustainable development.

China’s investment strategy is taken on by Mark Klaver and Michael Trebilcock, who argue that Chinese investment presents African states with a major opportunity for sustainable economic growth. China’s main motivation for investing in Africa is to access the country’s natural resources, but Chinese investors also seek market access. Despite serving China’s own interests, Chinese investment in Africa has expedited economic growth in various African countries. Nevertheless, it still presents a number of major drawbacks. As to the correct response to such drawbacks, the authors suggest that African states have varying levels of good governance, and while no policies are one-size-fits-all, economic development is ultimately best achieved by cultivating Africa’s manufacturing sector.

Part II Sustainable development, environmental protection, and climate change

Part II of the volume addresses the delicate intersection between trade regulations and measures adopted in the name of sustainable development, environmental protection, and climate change mitigation, exploring the role China plays in shaping these relations.

Francesco Sindico and Julie Gibson explore the evolution of international climate change practice and its repercussions on trade relations among countries. The authors argue that three key trends can be identified in the development of the international climate change regime: the prevalence of soft commitments, the fragmentation of international efforts in relation to climate change, and an increasing complexity within the relevant adopted instruments. After analyzing the trends in the development of the overall international climate change efforts, the authors focus on the specific nature of the climate-trade relationship within the broader debate on trade and environment, and assesses whether softer, more fragmented, and more complex international climate change practice may increase trade tensions.

Imad Ibrahim, Thomas Deleuil and Paolo Davide Farah investigate the place and practice of the principle of common but differentiated responsibilities (CBDR) in the ongoing international climate negotiations. In their analysis, the authors study the regime’s evolving role and understanding of the principle during the recent developments. After the adoption of the Bali Action Plan, new issues have appeared in negotiations and the centrality of CBDR appears to be fading. As a result, recent decisions refer more and more often to contextual norms of differentiations rather than making direct reference to CBDR. Yet, the Paris agreement has proved that the latter principle will always constitute an essential element in the international climate change negotiations. The authors thoroughly explores these developments, keeping in mind that the CBDR represents only one expression of differential treatment and, irrespective of what expression might eventually prevail, it is the parties’ actual obligations that will matter.

Marion Lemoine assesses the current functioning of the Clean Development Mechanism (CDM) from a developing-country perspective. The author provides an analysis of the regional distribution of CDM projects and evaluates the content of the sustainable development input within the projects to investigate whether developing countries are the effective beneficiaries of the mechanism in terms of sustainable development. The effective implementation of sustainable development through CDM remains one of its main problems, and technology transfer has been effective only in less-industrialized states.

Elena Cima examines the international framework regulating the process of technology transfer in the renewable energy sector and identifies the obstacles that prevent the transfer from being more successful. Without denying the relevance of all the efforts at the international level to facilitate such transfer, the author draws from the Chinese experience to argue that the most effective way to address the real obstacles to technology transfer is to enact comprehensive domestic policies in the recipient country. The author further argues that the creation of a strong legal structure and a suitable investment scenario in the host country is a main driver of technology transfer, while contributing to the country’s development. Besides, it enables the host country to develop its own technology and become an active part of the process.

Weidong He explores the relationship between China’s recent rapid economic growth and environmental protection, as he formulates suggestions for improving the implementation of China’s environmental laws to cope with the issues plaguing the effectiveness of the system. China’s pattern of development, which is the main cause of the country’s environmental issues – together with the international environmental movement – pushed the Chinese government to pay increasing attention to environmental issues. After a detailed description of China’s environmental protection framework, the author analyzes the fundamental principles and institutions of the Chinese environmental legal system, as well as the degree of China’s international environmental cooperation.

Luo Li, who formulates proposals for improving the judicial relief system for environmental disputes in China, takes on a different aspect of China’s environmental legal framework. Presently, China has developed a system of judicial relief for environmental disputes that integrates administrative, criminal, and civil litigation. Although this system has generated discernible positive effects, there is still considerable room for improvement. The author argues that China lacks an effective way to protect the environment and the environmental interests of the general public, and, therefore, improving the legislation behind procedural law and regulating environmental public interest litigation more clearly is a pressing matter.

Carla Peng explores the recent reforms of the Chinese legislative framework as a reaction to the implementation of the results of the climate negotiations, and especially of the UNFCCC and the Kyoto Protocol. As one of the major international environmental issues, climate change plays a direct role in national energy security and affects the country’s strategy for national economic growth. By implementing the UNFCCC and the Kyoto Protocol, China has made great legislative achievements, but its legal system continues to face serious problems, such as incomplete climate and energy policies, lack of supporting regulations, and difficulties in implementation and enforcement. The author argues that a new reform breakthrough is necessary if China intends to complete its transition to a low-carbon economy.

Zhixiong Huang explores the evolving role played by Chinese Non-Governmental Organizations (NGOs) in the ongoing climate change debate. Climate change is an area of extreme political sensitivity and technical complexity, which may produce substantial obstacles to the participation of NGOs. China’s unique situation as both the largest developing country and one of the largest greenhouse gas emitters would seemingly provide an additional obstacle to Chinese NGOs’ involvement in China’s climate politics. Despite being latecomers to the game, as international consensus about the need to mitigate climate change continues to increase, the stimulus for Chinese NGOs to get involved has also escalated. Judging by the domestic and international presence of Chinese NGOs, climate change has now become one of the most dynamic areas for Chinese NGOs.

Paolo Davide Farah and Riccardo Tremolada carry out an in-depth analysis of the current shale gas regulatory framework, moving from previous experiences of unconventional gas exploitation in the US to evaluating their possible applications in China, where regulatory and enforcement hurdles are exacerbated by an energy sector characterized by technological deficiencies, barriers to market access, and a limited liberalization of gas prices. Shale gas has been defined as a revolution in the global energy landscape. This is even truer in China, whose large shale gas reserves are likely to have a crucial effect on the regional gas market and on China’s energy mix. Nonetheless, this advance does not come without risks, because shale gas exploitation poses a number of legal, regulatory and environmental challenges, which could negatively impact future exploitation and commercialization, not only in China.

Part III Fundamental rights and cultural diversity

Part III of this book turns to the issues of fundamental rights and cultural diversity, and their relationship with international economic law from a Chinese perspective.

Jean Yves Heurtebise explores the role played by NTCs in the transfer of legitimacy from nation-states to international institutions, necessary to cope with the globalized nature of the contemporary world economy. The challenge brought by NTCs not only requires overcoming national selfishness, but it also calls for universal recognition of some fundamental rights, implying the constitution of a legal-ethical platform, potentially superseding national sovereignties and bridging cultural differences. To help understand China’s reluctance to embrace NTCs, the author conducts a comparative analysis of Chinese and Western legal cultures, comparing the debate between “Confucians” and “Legalists” in ancient China to the one between natural law theorists and legal positivists in contemporary Europe.

Flavia Zorzi Giustiniani analyzes the way the WTO deals with the right to food and demonstrates the negative impact that WTO obligations, and in particular those deriving from the Agreement on Agriculture, have on the right to food, stressing the fact that this negative impact is not inevitable. In principle, WTO and human rights obligations are not incompatible. The Agreemen...

Table of contents

• Cover
• Title
• Copyright
• Contents
• List of Figures
• List of Tables
• List of Abbreviations
• Notes on Editors
• Notes on Contributors
• Forewords in Alphabetical Order
• Acknowledgements
• 1 Introduction and Overview
• 2 The Development of Global Justice and Sustainable Development Principles in the WTO Multilateral Trading System through the Lens of Non-Trade Concerns: An Appraisal on China’s Progress
• PART I Public Policy, International Trade, and Foreign Direct Investment: The Role of States and Non-State Actors in Economic Globalization
• PART II Sustainable Development, Environmental Protection, and Climate Change
• PART III Fundamental Rights and Cultural Diversity
• PART IV Public Health, Product and Food Safety, Consumer Protection
• Index