Syllabus for International Trade Law (DISS252)
Outline of the Course
International Trade Law (DISS252) focuses on the study of the WTO law. There are three important components in the substantive WTO law, which are the rules on trade in goods, trade in services and intellectual property respectively. The course provides an opportunity for students to understand the overall background for the development of these rules, the structure and application of the rules and their contribution to the international trading system.
The Objectives of the Course
The course is recommended mainly for students who are planning to become professionals in international services. Balanced understanding of international trade is an absolute necessity for a serious practitioner in the field. First of all, international trade is one of the most tangible and dynamic activities in international relations. An important characteristic of international trade is that it is regulated through abody of law, complete with its own adjudicative system established at the WTO. The level of the rule of law achieved in international trade is much more advanced than in any other fields of international activities. Thus, through taking this course, students will become comfortable in understanding how the WTO law works to promote international trade and at the same time expand their understanding of the institutionalization of rule of law in broader international relations.
Reading requirement for the Course
A reading packet will be prepared by the lecturer on the basis of the following two books and other relevant materials.
- WTO Secretariat, Understanding the WTO (WTO, Geneva, 2017)
- John Jackson et alt., Legal Problems of International Economic Relations (West Group, St. Paul, Minnesota, 2002)
Weekly allocation of issues to be studied through the Course
March , 2018: Introduction and Organization of the semester
- What is the relevance of the WTO for the students of international relations?
- What are the overall contents of the subject matter to be studied?
- How shall the class be conducted and how to prepare for the class?
- How shall the students’ progress through the course be assessed?
Required reading
- Read WTO, Understanding the WTO (refer to the “RP (Reading Packet)”), pp.1-7
March , 2018: WTO Dispute Settlement System
The newly established WTO dispute settlement system has often been called as ‘jewel in the crown’ of the outcome of the Uruguay Round negotiations, and has uniquely contributed to the stability of the global trading system since 1995. A procedure for settling disputes existed even under the old GATT. However, it had no fixed timetables, rulings were easily blocked and many cases dragged on inconclusively for a long time. These shortfalls were taken care of to a large extent through the Uruguay Round agreement on the DSU(Dispute Settlement Understanding). Key questions to be discussed in the class include the following:
- How did the WTO Dispute Settlement System evolve?
- What is the overall structure of the DSU?
- How does the DSU work?
- What is the overall assessment of the DSU after 20 years of its use?
Required reading:
-Read Understanding the WTO (refer to the “RP (Reading Packet)”), pp. 8-15
-Peruse the WTO/DSU (Dispute Settlement Understanding).
-Review the Lecture note (to be placed each week in the class website, one week prior to the class)
March , 2018:MFN and Regional Trade Arrangements
There are a few simple, fundamental principles that run throughout all the WTO agreements. One of them is the MFN (Most Favored Nation) principle. RTA’s (Regional Trade Arrangements) form an important exception to the principle.
Other principles include National Treatment, Freer Trade, Predictability, Fair competition and Encouragement of development and economic reform.
Key questions to be discussed in the class include the following:
- What is the MFN rule?
- What are the exceptions to the MFN rule?
- What are regional trade arrangements (RTA’s) ?
- How does the WTO regulate RTA’s?
Required reading:
-Read WTO, Understanding the WTO, pp. 16-20
-ReadLegal Problems of International Economic Relations (refer to the “RP (Reading Packet)”), pp. 452-455
March , 2018: Border measures (tariffs, non-tariff measures)
In the early years of GATT, the major interests of the Contracting Parties were focused on further reduction of tariffs through successive rounds of negotiations. During the Tokyo Round, which lasted between 1973 and 1979, the scope was expanded to include non-tariff measures affecting trade in goods. Dealing with border measures, including tariffs and non-tariff measures, has long been the ‘bread and butter’ of the GATT/WTO system. Key questions to be discussed in the class include the following:
- What are the border measures?
- How doestariff work to affect international trade?
- What are the rules regulating tariffs?
- What are non-tariff measures?
- How does the WTO regulate non-tariff measures?
Required reading:
-Read WTO, Understanding the WTO, pp.21-30
-John Jackson and others, Legal Problems of International Economic Relations (refer to the “RP (Reading Packet)”), pp. 338-349
-Peruse GATT, 1994
-Peruse Korea’s tariff schedule (refer to the “RP (Reading Packet)”)
April , 2018: National treatment and General exceptions
As was already stated earlier in the syllabus, a few simple, fundamental principles run throughout all WTO agreements. Another example of such principles is the NT (National Treatment) principle. Article XX of the GATT agreement, titled as “General Exceptions”, provide an important exception to the MFN as well as NT principles.
Interpretation of Article XX is assuming growing importance, as more regulatory measures are introduced in pursuit of rightful public policy goals (examples: the protection of human, animal or plant life or health) and an increasing number of those measures are challenged at the WTO. In the class, students will have an opportunity to read a part of the Appellate Body report on Shrimp-Turtle (DS 58), a landmark case on the interface between the MFN principle and the general exception. Key questions to be discussed in the class include the following:
-What is national treatment? How does it differ from the MFN principle?
- What is the scope of the national treatment?
- What is the significance of Article XX, GATT 1994?
- How does Article XX apply in specific situations?
Required reading:
-Read WTO, Understanding the WTO, pp 31-39
-Read Legal Problems of International Economic Relations (refer to the “RP (Reading Packet)”), pp. 552-563
April , 2018: the SPS Agreement and the TBT Agreement
As was already suggested above, Article XX of the GATT agreement is assuming growing importance. In essence, the Article plays a balancing role between two competing values: on the one hand, it allows Members to regulate trade in order to pursue rightful public policy goals; on the other hand, the Article sees to it that these measures do not have discriminatory effect or are used as disguised means of protection.
In addition, there are two specific WTO agreements elaborating the balancing role embodied in Article XX, namely the SPS agreement and the TBT agreement. Key questions to be discussed include the following:
With respect to the SPS agreement,
-The SPS agreement sets out the rules so that health and safety regulations are not used as an excuse for protecting domestic producers. What is the standard employed in the agreement to meet the balance?
-How do we know if the scientific evidence is sufficient?
-What role does harmonization play in the agreement?
With respect to the TBT agreement,
-If technical regulations are set arbitrarily, they could be used as an excuse for protectionism. How does the TBT agreement try to prevent such an abuse of technical regulations?
-What role does the assessment of conformity play in the agreement?
Required reading
-Read WTO, Understanding the WTO, pp 40-42
-Read Legal Problems of International Economic Relations (refer to the “RP (Reading Packet)”), pp. 579-590
-Peruse the SPS and the TBT agreements
-Peruse International Animal Health Code- 2006, OIE (Organization of International Epizootics ) (refer to the “RP (Reading Packet)”)
April , 2018: Mid-term Examination
May , 2018: Trade remedy measures
Binding tariffs and applying them equally to all partners is one of the key obligations of WTO members. Trade remedy measures, namely anti-dumping, subsidy related measures and safeguard measures are exceptions to such an important obligation of WTO members. Thus, trade remedy measures can be applied only when certain substantive and procedural conditions are met, as stipulated in the relevant WTO agreements. Key questions to be discussed include the following:
With respect to Anti-dumping
- What is dumping? How to assess the margin of dumping?
- What is the material injury? How does it differ from serious injury?
With respect to safeguards
- What situations justify the imposition of safeguards?
- What constitutes the surge in imports?
- What constitutes the serious injury?
- How to establish the causality between surge and injury?
- What remedies are available for the injury?
With respect to subsidies
- What constitutes financial contribution?
- What constitutes benefit?
- How to establish the specificity of the subsidy?
- What are the additional factors to constitute a “prohibited subsidy”?
- What are the additional factors to constitute “actionable subsidy”?
Required reading
-Read WTO, Understanding, pp. 43-47
-Peruse John Jackson and others, op cit, pp.755-759 (for AD); pp.785-790 (for SCM) ; pp. 604-605 and pp.642-651 (for safeguard measures)
-PeruseGATT, 1994, Anti-Dumping Agreement (Agreement on Implementation of Article VI of the GATT, 1994) , Agreement on Safeguards, Agreement on Subsides and Countervailing Measures
May , 2018: the Agreement on Agriculture
The original GATT did apply to agricultural trade, but contained a large number of loopholes. For example, it allowed countries to use import quotas and to provide all different kind of subsidies to agriculture. As a result, agricultural trade became highly distorted. The Uruguay Round produced the first multilateral comprehensive agreement dedicated to the agricultural sector. Key questions to be discussed include the following:
With respect to market access
-What is tariffication?
-How much tariff reduction was made after 1995?
With respect todomestic subsidy
-What are three different sets of domestic subsidies?
-Amber box: what is the definition of AMS (Aggregate Measurement of Support)?
-Blue box: what is the definition of blue box? Article 6.5
-How much reduction was made after 1995?
With respect toexport subsidy
-What export subsidies are subject to reduction commitments?
-How much reduction was made after 1995?
Required reading
-Read WTO, Understanding, pp. 48-52
-Peruse GATT 1994, Agreement on Agriculture
May , 2018: Services
The GATS is the first set of multilateral rules governing international trade in services. It was negotiated in the Uruguay Round in response to the huge growth of the services economy over the preceding 30 years. GATS agreement is based upon the GATT agreement and share many important aspects of the GATT agreement. However, there are important differences between the two agreements. These differences arise from the simple fact that goods and services are traded in different manners and are subject to different set of barriers to market. It is also to be remembered that Members were allowed to make far broader scope of reservations on the obligations in trade in services. Key questions to be discussed include the following:
-What are the four different modes of trading services? (cross-border supply; consumption abroad; commercial presence; presence of natural persons)
-What are the similarities and differences between MFN under GATT (Article I) and MFN under GATS (Article II)?
- What are MA obligations applicable to specific commitments?
- 6 No, nos (Number of suppliers, value, ENT, number of natural persons, specific types of legal entities, participation of foreign capital)
-What are the similarities and differences between NT under GATT (Article III) and NT under GATS (Article XVII)?
Required reading
-Read WTO, Understanding, pp. 53-57
-John Jackson and others, op cit, pp. 885-893
-Perusethe GATS Agreement
-Korea’s Schedule of Commitments
May , 2018: Intellectual property
The TRIPS agreement, negotiated trough the Uruguay Round, introduced intellectual property rules into the multilateral trading system for the first time. Ideas and knowledge were already an increasingly important part of trade by the time of Uruguay Round. It is easy to understand why their creators should be given the right to prevent others from using their inventions. However, the extent of protection and enforcement of these rights varied widely around the world, inhibiting trade involving intellectual property rights. The existing international conventions, including the Berne Convention and the Paris Convention administered through the WIPO (World Intellectual Property Organization), fell short of removing such a difficulty for many reasons. To cite one example, the agreements lacked binding mechanism for settling disputes. The TRIPS agreement filled such a gap to a large extent, and was welcomed as another major milestone set through the Uruguay Round. Key questions to be discussed include the following:
-How does the principle of NT work in the context of the TRIPS agreement?
-How do different principles of exhaustion affect the protection of IPRs?
-What are the new rights created through the TRIPs Agreement on top of the rights in the Berne Convention?
- What requirements should be fulfilled to be protected as a trademark?
-What requirements should be fulfilled to be protected as GI’s?
-What is the relationship between the TRIPs Agreement and the Paris Convention?
-When and how patents can be used without the authorization of the right holder?
-What is the significance of the Doha Declaration on the TRIPs Agreement and Human Health?
-What are the general obligations to enforce the IPR rights?
Required reading
-Read WTO, Understanding, pp. 58-64
-John Jackson and others, op cit, pp. 960-969 and pp. 993-996
-Peruse the TRIPS Agreement
-Doha Ministerial Conference Special Declaration on the TRIPS Agreement and Public Health(refer to the RP)
June , 2018 : Final Examination
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