International Trade Law: Globalisation Trade and Development

Full course description

The recent revival of economic nationalism in various parts of the world, including in some of the traditional pillars of trade liberalization such as the United States and United Kingdom, reflect the growing fear, mistrust and hostility of many people in these countries and around the world regarding economic globalisation and international trade. While economic globalisation in general, and international trade in particular, undoubtedly offer the possibility of unprecedented prosperity for people in both developed and developing countries, they also cause numerous problems and give rise to justified concerns. The challenge facing the international community is to manage and regulate the economic globalisation and international trade so that they benefit all of humankind.

The World Trade Organization, established in 1995, is at the forefront of the multilateral effort to manage and regulate economic globalisation in general and international trade in particular. The law of the WTO governs the trade relations between the WTO’s 164 Members but also concerns each of us directly, as it affects the price and quality of the goods and services we consume. Moreover, for many of us, our (future) job will be, directly or indirectly, related to (and sometimes threatened by) international trade.

WTO rules have played an important role in mitigating the consequences of the 2008-9 Global Financial and Economic Crisis. In the face of the dramatic drop in production and exports as well as high unemployment experienced by many countries during the 2008-9 crisis, it was feared that countries would resort to trade protectionist measures to support their domestic industries. During the Great Depression of the 1930s, the adoption of such protectionist measures deepened and lengthened the economic crisis considerably, which in turn led to political upheaval and radicalization, international tension and, eventually, war. The WTO and its rules have contributed much to the fact that countries did not - in a significant manner - resort to disruptive protectionism in response to the Global Financial and Economic Crisis and that history did not repeat itself.  However, continued vigilance is called for because unemployment, poverty and inequality persist in many countries leading to pressure on governments by domestic industries calling for protection from foreign competition, with the trade war between the US and China being the most prominent example. The consequences of the COVID-19 pandemic for the global economy may exacerbate this trend even further, unless restrained by Members’ respect for their legal obligations under WTO law.

It is clear that WTO rules, most of which were adopted in 1995, are sorely in need of updating to reflect current economic, technological and societal realities. Since 2001, WTO Members engaged in negotiations in the context of the WTO Doha Development Round on rules for the further liberalisation of international trade. To the disappointment of many, several years of negotiations resulted in only limited agreements on new rules for international trade, achieved in Bali in December 2013 and in Nairobi in December 2015. However, in June 2022, at the 12th Ministerial Conference of the WTO, Ministers adopted a package of agreements, including rules on fisheries subsidies and a waiver on patent protection of Covid-19 vaccines. Groups of WTO Members continue work on specific areas such as e-commerce, sustainability, trade and gender, domestic regulation of services and investment facilitation for development.

This introductory course on WTO law and policy is recommended to all students who want to gain a better understanding of the core institutional and substantive rules of the international trading system. This understanding will enable students to also appreciate some other recent developments in the field of international economic law, such as the proliferation of preferential trade agreements and the ongoing trade tensions between major trading powers in the world. Both are a response to the failure of the Doha Development Round to reach multilateral consensus, thereby shifting trade negotiations and actions partly away from the WTO. Depending on the political and economic position of the involved states, some of these agreements and actions may well set new standards for future international trade regulation. By taking this course, students will gain understanding of not just the WTO but also of other recent developments in international economic relations.

The course is built around a number of true-to-life international trade problems represented in the form of case studies. The course addresses six themes. It starts by examining the phenomenon of economic globalization and, the arguments for and against free trade, as well as the role of law in international economic and trade relations. Secondly, the course looks at the history, objectives, structure, functions, decision-making and membership of the WTO. Thirdly, the WTO's unique system for the resolution of trade disputes and its current crisis is discussed. Fourthly, the principles of non-discrimination in WTO law (namely the obligations of most-favoured-nation treatment and national treatment) are examined. Fifthly, the WTO rules on market access, dealing with tariff barriers and some non-tariff barriers to trade in goods and services are addressed. Finally, the provisions of WTO law that aim to balance trade liberalization with other societal values (such as health, environment and security) by means of exceptions to WTO obligations are discussed.