International economic order suffered when President Trump promoted his ‘America First’ foreign policy and revived an out-of-dated classic mercantilism paradigm by means of political populism, economic unilateralism and trade protectionism, with apparent disregard for general international law and international economic law, these policies created serious tensions in international relationships and in multilateral trade systems.
The US has historically championed its world leadership featuring ‘American democratic values’ as well as vaguely defined ‘America universal values.’ Notwithstanding such political slogans, the Trump Administration continually challenged and violated the basic principles of the international legal order as well as of the international economic order (ieo). In addition to his unilateralist approach to global trade, Trump disregarded the international legal order, waging a comprehensive geopolitical and geo-economic war against China that resulted in a catastrophic disturbance of the status quo of international and bilateral relation. In reaction to these developments, Prof. Chia-Jui Cheng coordinated with the University of International Business and Economics (uibe) in Beijing to organize an international conference titled “A Changing International Economic Order and the Response from International Law,” to which eight highly qualified foreign scholars of international economic law were invited to Beijing to deliver papers related to these critical issues.
This volume, presenting the research outcome of that gathering, is divided into four Parts. The first Parts is comprised of two chapters: “The Evolution of International Economic Legal Order and New Global Economic Order” by Chia-Jui Cheng and “The wto Legal and Dispute Settlements Systems in Time of Global Governance Crises” by Ernst-Ulrich Petersmann. The former deals with the historical evolution of the ieo and is organized into two major parts. The first compares historical aspects of the international economic order in China and in Europe, chiefly around the Mediterranean Sea littoral through the sixteenth century. International economic activities shifted to Western Europe from the Mediterranean Sea from the seventeenth century when the ieo was mainly based on the unilateral governance of classical mercantilism. After the first industrial evolution, imperialism and colonialism intruded into global economic activities. The ieo again split into two systems, the ieo among European countries based on the principles of non-discrimination within the framework of bilateral commercial treaties and the ieo between European powers and other colonized and semi-colonized states and regions based on the unequal bilateral treaties. The second part examines efforts made by the
The second essay is titled “The wto Legal and Dispute Settlements Systems in Time of Global Governance Crises” by Ernst-Ulrich Petersmann is a theoretically and creative work in the field of international economic law. Beginning with an overview of the current global governance crises attributed to the hegemonic nationalism driving Trump’s ‘trade wars’, his assault on the wto and the US destruction of the wto dsb, it reflects on the ‘madness’ of deploying unsound methods for conflict resolution, without protecting the wto’s legal and dispute settlement mechanisms against money-driven, nationalist power politics, which led to an increasing number of conflicts between neo-liberal, state-capitalist and European ordo-liberal conceptions of international economic regulation. The chapter concludes by identifying that the failures of ‘member-driven wto negotiations’ suggest that adjusting the world trading system with respect to the global governance crises may require plurilateral and regional reforms before the needed wto adjustments may be possible.
Part 2 includes three chapters: the first on national security exception under Article xxi(b)(iii) of the 1994 gatt, the second is Subsidies and soes, and the third deals with technology governance in a devolved global legal order. Each discusses the present challenges to the global economic order. In the first chapter, van den Bossche and Sarah Akpofure offer criticisms of the US for undermining the rules-based multilateral trading system by having abusively invoked the national security clause to protect its national interests. They conclude that the panel in the Russia – Traffic in Transit case (2019) struck an admirable balance between the need to leave wto Members a wide margin of discretion in deciding on what needs to be done to protect essential security interests, and the need to avoid abuse of national security exceptions, and in particular Article xxi (b)(iii) of the gatt 1994.
The second essay of this Part is written by Bernard Hoekman and examines the problem of subsidies and soes vs. systemic spillovers. He sets forth that the geo-economic tension notably associated with the rise of China, and global collective action problems – climate change, the covid-19 pandemic – mandates the need for international cooperation to revise and develop rules to guide both the use of domestic subsidies and responses by
The third chapter in this Part deals with technology governance in a devolved global legal order. Frederick Abbott analyzes the technological war between the US and China, in particular the legal aspects of licensing, the controversial ‘forced’ technology transfer, transfer of technology policy, cyber-piracy, and industrial policy. In his contribution, Abbott considers that “the [EU’s] interpretation of China’s Accession Protocol and the Working Party Report would extend the scope of wto rules beyond the trips and trims Agreements.” In addressing the US-China Economic and Trade Agreement signed on 15 January, 2020, Abbott points out that China made significant commitments to the United States on the protection of technology transfer as well as in respect to addressing cyber-piracy with respect to thresholds for initiating criminal enforcement, and placing substantial limits on requests for information from government authorities. According to an mfn-basis, the commitments China has made to the United States pursuant to the Phase 1 Agreement will be extended to the EU and other wto Members.
In Part 3, the two chapters deal with the struggle for the global economic order. The first, entitled “The Struggle for International Economic Law” is written by Brewster of Duke Law School. The author examines how Trump’s trade policy dramatically deviated from past practice, damaging the stability of the global trading system. The author offer criticism of the U.S. for unilaterally imposing trade sanctions to address perceived breaches of trade rules, for drastically broadening its definition of the national security exception, for seeking to incapacitate the functioning of the wto dsu by blocking Appellate Body appointments, and for demanding the renegotiation of preferential trade agreements on the threat of withdrawal. Brewster concludes that restoring multilateral norms depends on other economic powers, particularly China, which is in an important position to determine the future of the global trading system. Brewster pessimistically predicates that “a new [U.S.] administration would most likely not retreat entirely from more unilateral trade policies and thus not work to restore multilateral norms at the wto.”
The two chapters in Part 4, relate directly and indirectly to the future of global economic order and reflect on the cross-roads at which the world currently finds itself, waiting for the major power to choose an avenue toward a complete multilateralism or an avenue toward a mixed multilateralism, regionalism and unilaterally-dominated bilateralism.
The essay written by Prof. Kawano of Waseda University provides a general picture of the regionalism in international economic relations. She confirms that through the regional trade agreements, such as bits/mits and ftas/epas, contribute to the clarification of the rules to be applied and enhance the credibility of the procedure. They also play a significant role in the promotion of foreign investment in the region established thereon. In its conclusion, the essay agrees that the dispute settlement mechanism in bits/mits and ftas/epas is interrelated with the wto dispute settlement mechanism, even though they are fundamentally different.
The second essay in this Part deals with precedent in investment arbitration. Prof. Fukunaga poses the question: ‘Is an institutionalized investment court more desirable than ad hoc arbitral tribunals?’ The answer is affirmative because investment court has been making substantial contributions to the rule-based international investment dispute resolution and further clarifies some critical terms in investment agreements. Fukunaga acknowledges that it is increasingly difficult for the United States to agree on new rules for international economic law in the current polarized world, yet its role is critical in the making of such rules.
This volume deals with the crucial questions of how to increase the stability, efficiency and effectiveness of the ieo and means by which to reach a consensus on the management of a new global economic order based on the equitable distribution of wealth and other public goods argues for the need to reform and innovate the structure of the ieo. Thus far, the Biden Administration has made the continued global position of the US its first priority, relying on its military power and economic unilateralism, and not on the wto legal order
The Beijing Conference was the result of my visit to Professor Jiaqiong Wang, President of the University of International Business and Economics (uibe) and Prof. Jingxia Shi, Dean of the uibe Law School, in 2018. We discussed the serious consequences of the U.S.‘s premeditated ‘trade war’ against China. At the time, I suggested to President Wang that the uibe, as premier university in China specialized in the fields of economic science and law, ought to undertake a new mission to undertake research on how to conserve the multilateral trading system and to mitigate the impact of the ‘trade war’ on the global economic order. With much enthusiasm, President Wang and Dean Shi fully endorsed my suggestion and agreed to organize the first international conference on “A Changing International Economic Order and the Response from International Law.” The conference was designed to address various conflicting issues concerning the international economic order raised mainly by the U. S. The conference was held on 26–27 September 2019 in Beijing.
The opening session of the Beijing Conference was moderated by Prof. Jingxia Shi. Prof. Wenbin Xia, new President of the uibe; Qijiang Wang, Vice President, China Law Society; Yongjie Li, Deputy Director-General, Depatment of Treaty and Law, Ministry of Commerce of the People’s Republic of China and Prof. Jie Huang, President, Chinese Society of International Law and Former President, China University of International Business & Economics (cupl), were invited as guest speakers. All of them stressed on the importance of the Beijing Conference’s contribution to the reform of the international economic order and their view that the consolidation of the multilateral world order is the only means to safeguard international peace and prosperity.
The organization of the Beijing Conference drew much attention from the academic world of China. The wto Law Research Unit of the China Law Society in Beijing decided to organize its annual conference at Haikou, Hainan Island on 28 and 29 September 2019, just after the Beijing Conference. This facilitated the attendance of Peter van den Bossche, Ulrich Petersmann, Alain Pellet, Chia-Jui Cheng and Jingxia Shia at the Haikou Conference as keynote speakers. The Haikou event attracted more than one hundred participants from all of the leading universities in China.
The Beijing Conference could not have organized without incurring many debts of gratitude. My largest debt overall is undoubtedly to Prof. Jingxia Shi, Dean of the uibe School of Law in Beijing, for her unreserved support in organizing the conference. Without her active participation, it would have
To organize a large international conference efficiently and successfully, there must be some key individuals who make decisions, and coordinate and execute them, together with many others working tirelessly behind the scenes before, during and after the event. In this respect, my heartfelt appreciation goes to Prof. Hongliu Gong, Associate Dean of uibe School of Law, and her working team, including Professors Manjiao Chi, Yongmin Bian, Haiacong Zuo, Matthew Kennedy, Xianwen Kong and Lebing Wang and administrative staff members, including Tian Tian, Shanshan Wang, Liqun Fan and Tingting Jiang. Tian Tian coordinated extensively with the invited foreign speakers.
By editing the proceedings of the present book, I would like to express my special thanks. to Dr. Yen-Hsueh, Lai, Adjunct Lecturer of International Economic Law and the Secretary of the Soochow University School of Law, for her invaluable assistance in the process of editing. Without her unfailing patience, love and kind devotion, this book could not have been completed in such short time.
Last, but certainly not least, I am indeed grateful to Mrs. van der Laan of Brill/Nijhoff Publishers who has arranged and assisted in the publishing of this book with great enthusiasm, encouragement, commitment and efficiency. I have to say “Thank You, Ingeborg!”
Chia-Jui Cheng
School of Law
Soochow University, Taipei
May 19, 2021