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The Dynamics of Multilateralism in Economic Law

  • 17 Pages
  • Published On: 13-12-2023
Abstract

The multilateral agreements and rules governing trade agreements are subjected to negotiation between member states or between regional groups of states. The WTO rules and agreements are a result of such negotiations. The continuous negotiation is also a reflection of imbalance in the international economic rules and governance in respect to powerful and other developing countries. In this context, this essay assessed the contribution made by multilateralism towards developing economic law whether or not in fact they contribute to trading rules meeting the objective such as the WTO’s objective of trade liberalisation.

This essay has found that multilateralism is states’ contractual agreed terms and not the law. A rule is not a rule if not practiced by states or accepted by states. Multilateralism, including WTO rules, are not merely economic or trade rules, but also civil society norms including the interests of non-state actors and other civil society movement. This has affected the trade liberalisation objective of multilateralism. New fast pace emerging bilateral and regional free trade agreements has reduce the relevance of multilateralism. However, this essay has found that multilateral rules are still relevant in developing new economic rules. This may, however, be not at the expected manner. The rationale is that regional agreements cannot be considered collective actions until and unless the negotiations in multilateralism is only through groups of regional players which are part of multilateral agreements..

Introduction

Law is product of the society. Its rules, whether domestic or international, are created by forces, including economic interest. International law, however, is developing at an unprecedented pace in response to global economic events. Such global events have led states to coordinate inter-relations and form a legal structure. Multilateralism is one such practice that originated due to this coordinated practices between national policies of three or more states. It is an institution subject to the generalised principles of conduct, irrespective of individual interests. Multilateralism signifies the rules, which are uniform and signifies standard conduct and equal participatory rights.

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The transborder economic activities has led to economic interdependences, which calls for law to bring a structure. The demand for law as an ordering structure have led to formation of the World Trade Organisation (WTO) as a global organisation and a multilateral institution with formal status of an international organisation and formal diplomatic status for its secretariat. The rules of WTO were to be largely liberal with the aim to raise standards of living, welfare and domestic products. However, a lot of events has occurred since the WTO inception demonstrating that WTO is not functioning the way it was established for. In that context, it is a concern whether or not multilateralism leads to effective development of international economic law. There may not be an affirmative response to this question as many private groups and groups of nations have had held oppositions and protests against the rules and practices of WTO. For example, there was the anti-globalisation groups’ protest at the 3rd WTO ministerial meeting in Seattle in 1999. Environmentalist groups from the US, EU, Australia and others protested on the streets against the WTO and its rules. Complaints from labour unions erupted against WTO for ignoring their interest and lowering the labour standards. Diplomats from developing countries complained that the WTO legislative process was unfair and transparent. Complaints were also raised by the Group of 77 that represented a hundred developing countries in regard to imbalance in the WTO rules that favoured the interest of the developed countries. In this context, this essay will deal with the main question of whether or not multilateralism restricts or liberates development of international economic law.

This essay will assess the role of multilateralism by determining whether or not: i) it restricts or liberates development of international economic law; ii) it still matters given the increasing numbers of regional trade agreements; and iii) it must reform and incorporate new aspects that could bring new effectiveness of economic rules. The role of multilateralism will be discussed considering the origin, evolution and future prospects of the WTO, which is a multilateral institution based on multilateral agreements between member states.

  1. Stephan W. Schill, The Multilateralization of International Investment Law (1st ed., New York: Cambridge University Press 2009) 1.
  2. Ibid, 9-10.
  3. John H. Barton, Judith L. Goldstein, Timothy E. Josling and Richard H. Steinberg, The Evolution of the Trade Regime: Politics, Law, and Economics of the GATT and the WTO (Princeton University Press 2010) 1.
  4. Ibid.
  5. Ibid.
  6. Ibid.
  7. Ibid.
  8. Ibid.
Multilateralism restricts development of international economic law

All the events mentioned above are examples that the practices and rules of WTO based on multilateralism have undermined the objectives of WTO. This essay will assess whether or not multilateralism has effectively contributed to the development of international economic law by analysing developments related to WTO regarding its governance of international trade. There are arguments that the universalisation of the WTO and its success as a dispute settlement mechanism have brought down the status of WTO as a platform for trade liberalisation. Thomas (2015) applied the bicycle theory to the public perception of WTO. This theory entails that the life of international trade law is subject to successful negotiations. If the negotiation fails, the international trade law fails. Applying this theory, he argues that after 20 years since the WTO inception, the status of WTO, as a forum it was meant to be, is not positive. He cites the example of non-productive Uruguay Round for institutional reform, the stalling of the 2001 Doha Development Agenda, or non-transparent agenda on services formally outside the WTO. In this context, this essay will explore whether or not multilateralism that signifies equal participatory rights has achieve the results despite efforts put in by the states. This section will explore examples to assess whether or not WTO’s efforts have yielded the desired result, including the 2001 Doha Development Agenda and other similar developments.

WTO rules have evolved subject to the changes in the international legal system defined by conduct of the member states. Such evolution has redefined members’ rights and obligations without any formal consent. To demonstrate, in the case of US- Shrimp, which concerns United States import prohibition of certain shrimp and its products, the Panel found this prohibition in violation of Article XI of GATT 1994. The Appellate Body also found the prohibition “arbitrary and unjustifiable” discrimination under GATT, Article XX(g). In this case, the Appellate Body took a revolutionary approach to WTO rules when it reversed the decision of the Panel that the US measures were not within the status of WTO rules and scope of measures as permitted under GATT, Article XX(g). Such evolutionary approach provides WTO authorities a means to develop WTO law. This approach is limited to situation where newly created norms emerge and multilateral law-making agreement and practice are not adopted to accommodate new rules. In this regard, it cannot be stated that multilateralism contribute to development of international economic law. Multilateralism is the law, which is the agreed contractual terms and conditions between states. As such, it does not contribute to development of WTO rules, which are merely a standard set of rules employed to act as guidelines. Reading it with the dispute settlement understanding of the WTO, the parties agreement holds precedes WTO rules and in their deficiency, the WTO rules are applied. In this light, WTO rules or international economic laws that institutionalised are safety net to govern members rights, duties and liabilities when states’ multilateral agreements have deficiencies.

  1. Thomas Cottier, ‘The common law of international trade and the future of the World Trade Organization’ (2015) 18(1) Journal of International Economic Law 3-20.
  2. Ibid.
  3. Ibid.
  4. WTO, ‘DS58: United States — Import Prohibition of Certain Shrimp and Shrimp Products’ (2001) accessed on 27 April 2021 .

It is observed that multilateral economic institutions are transiting to a form different from what multilateralism ought to achieve, which is based on activities of states. In addition to states, there are other private firms or social movements that are influencing multilateral institutions. Even though states are the key players, the influence of such private actors raises a question of their extent of surrendering to negotiations of the private actors. This is a sign of the complexity of multilateralism that has now captured the elements of civil society making multilateral governance a complex affair. It now requires approval of the state as well as considering the interest of the private or civil society bargains. In this context, will it be sufficient to consider multilateralism with development of economic rules alone or will it also consider both development of economic rules and civil society rules? It is seen that states follow a policy agenda to adopt more social issues. This is another complex feature of multilateralism. Some actors push their issues to be integrated in the mandates of institutions they are influencing. Considering the new changes in respect to multilateralism, the WTO has also adapted to considering the increasing importance of global civic society movements. WTO has also separate policies dealing with women’s groups or the groups of environmentalists. WTO also has the ministerial Decision on Trade and Environment, adopted in Marrakesh on 15th April 1994 required establishing a Committee on Trade and Environment (CTE) in order to identify the link between trade and environmental measures so as to promote sustainable development. The decision called for non-discriminatory and equitable multilateral trading system and for protecting the environment and called for states to coordinate policies regarding trade and environment within the competency of the multilateral trading system and limit of trade policies and environmental policies.

  1. Geraldo Vidigal, ‘From Bilateral to Multilateral Law-making: Legislation, Practice, Evolution and the Future of Inter Se Agreements in the WTO’ (2013) 24(4) European Journal of International Law s 1027–1053.
  2. Robert O'Brien, Anne Marie Goetz, Jan Aart Scholte and Marc Williams, Contesting Global Governance: Multilateral Economic Institutions and Global Social Movements (1st ed., Cambridge: Cambridge University Press 2000) 207.
  3. Ibid.
  4. Ibid, 208.
  5. Ibid, 210.
  6. Ibid, 211.

The establishment of WTO has institutionalised multilateral trading system. The interpretation or modification of WTO rules is thus subject to the agreement, practice or a normative evolution of a consensus between the members excluding influence of bilateral relations that may affect the application of the WTO rules between the states. The creation of new rules does not limit new interpretations to the context of a particular dispute. They will have application on the new rules. This makes way for multilateral principles over bilateral relations that are subject to individual consent allows changes while retaining integrity of the WTO system. Having said, this does not restrict the freedom of parties to agreements to settle disputes. For example, Article 3(2) of Understanding on rules and procedures governing the settlement of dispute, Annex 2 of the WTO Agreement provides for rights and obligations of states under the covered agreements including right to interpret provisions of the agreements as per the customary rules of interpretation of public international law. This means the WTO recognises external alternatives to enforce agreements between states, which also means that WTO allows states to resort to such external law making mechanism to creates inter-contractual parties rules binding in themselves. The rational may be based on the model of multilateral law-making model that subscribes ‘common intention’ or ‘common understanding’ among the states rather that the question of whether or not the means adopted to address an issue or an agreement is internal and external. This is supported by the US — Clove Cigarettes, which concerns the Federal Food, Drug, and Cosmetic Act (“Section 907(a)(1)(A)”), Section 907(a)(1)(A) governing a US tobacco control measure. The Appellate Body of WTO relied on Article 2.1 of the Technical Barriers to Trade (TBT) agreement and held that clove cigarettes from Indonesia and the US menthol cigarettes are “like products” and that the US cannot treat less favourably of the Indonesian clove cigarettes as it would have a detrimental impact on imports and competitive opportunities causing discrimination against a group of like products imported from Indonesia. Similar reliance on agreements between states by the WTO in redressing member trade disputes is also found in the US — Tuna II (Mexico) case, which concerns measures concerning importation, marketing and sale of tuna and its products. For instance, the Appellate Body found that the US measure inconsistent with Art. 2.1 as it modifies the competitive conditions in the US market causing detriments to Mexican tuna products. These two cases show that WTO law gives weight multilateral instruments while interpreting WTO rules. While it is so, this cannot be said in reference to bilateralism. WTO shows reluctance to a large degree when it comes to bilateral modifications regarding giving effects to external agreements, whether or not formal. The reason being that such bilateral agreements do not have multilateral approval, which otherwise would have given effect to external norms consisting multilateral instruments and procedures, even informal.

  1. WTO, ‘Relevant WTO provisions: text of 1994 decision’ accessed on 27 April 2021 .
  2. Geraldo Vidigal, ‘From bilateral to multilateral law-making: legislation, practice, evolution and the future of inter se agreements in the WTO’ (2013) 24(4) European Journal of International Law 1027-1053.
  3. Ibid.
  4. The Understanding on rules and procedures governing the settlement of disputes, Article 3(2).
  5. Geraldo Vidigal, ‘From bilateral to multilateral law-making: legislation, practice, evolution and the future of inter se agreements in the WTO’ (2013) 24(4) European Journal of International Law 1027-1053.
  6. WTO, ‘DS406: United States — Measures Affecting the Production and Sale of Clove Cigarettes’. (2014) accessed on 27 April 2021 .
  7. Ibid.

Linn (2018), while discussing the recent threats to multilateralism, states that multilateralism and the multilateral institutions are facing serious threats in the form of inequalities and fragmented in the global economy. Multilateralism has new meaning extending from just about financing investments to developing and maintaining fair and rules-based global economic and social relations. It is to set widely accepted norms and to monitor compliances, to knowledge and data, and resolve potential conflicts among actors. However, the new threats have disrupted the progress in addressing crucial global economic and social challenges. They have slowed the pace of global economic growth creating global financial crises on a recurrent basis and growth of inequality. Multilateralism is also affected not just by economic crisis and challenges to an open global trading regime, but also by various social issues including poverty, hunger and conflicts, natural disasters, risks of pandemics, and climate change. Thus, new economic order cannot just be within the economic sphere. All the other factors have some influence on the negotiation and the resultant of multilateralism. These new aspects of multilateral rules also raise the questions of the extent of power of the states or their impact on weaker states; of their role in creating complexities in the functioning of multilateral institutions; or particularly of whether the rules developed are not only economic rules but a mix of economic and social rules. As an example of some of threats mentioned above, it is also observed that powerful new alliances and multilateral organisations are defining the new structures of international relations. For example, states in alliances such as BASIC between Brazil, South Africa, India and China and IBSA between India, Brazil, South Africa and the multilateral organisations in the Asia‐Pacific and the global south are structuring their relations as well as shaping international relations and regimes. This creates a conflict with other regions of the world. For example, the new relations formed by the states in new powerful alliances differ from that of the EU and its position on multilateralism. This creates an uneven standard of multilateralism, which will eventually affect the entire purpose of multilateralism, which is trade liberalisation, collective action and equal participatory rights of the states. The continuous negotiation between states seen in multilateralism signifies a states attempting to push for new rules that promote their interests or contesting multilateralism by states using another multilateral body to challenge an existing one. The continuous negotiation is found in multiple actors, including the states, multilateral organisations, and non-state actors pursuing strategies using multilateral institutions to challenge existing multilateral institutions in terms of their the rules, practices, or missions. Such contest of multilateralism involves a change in the regime shifting and creation of competitive regime, which in turn shapes patterns of international cooperation in many areas including economic issues involving intellectual property. This was evident when developed countries contested the World Intellectual Property Organization (WIPO) to shift to the regime of GATT/WTO. Subsequently, the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) was adopted in 1994. TRIPS has sets the minimum standards for intellectual property meant to be implemented by all WTO members. It allows enforcement through the WTO dispute settlement mechanism. Since TRIPS, WIPO became less relevant. The availability of a strong option outside WIPO allowed the developed countries to challenge WIPO. The developing countries’ lack of awareness about the intent of developed countries. Thus, they were able to increase their negotiation power. The instances such as these where there is a change in regime or regime setting is demonstrative of the development of new economic rules. However, it could equally to said that the development of new rules is a reflection of powerful countries interest-based rules. In this regard, does it really justify stating that multilateralism effects new economic rules? No. It is interest-based terms of powerful states that govern international economic relations between states. Such outcome of contested multilateralism that was found in regard to WIPO and the shift of regime is also found with the WTO. Baldwin (2006) pointed out four general developments in the WTO that have made increasingly difficulty for member states to come to multilateral agreements. He stated that issues under negotiation are impacted by an increased in technical complexity and disruptive domestic economic effects. Developing countries are relatively attaining more bargaining power among the negotiating participants. Instead of multilateral agreements, there has been more of bilateral and regional free trade agreements. He stated that the reciprocity in trade liberalisation is given lesser focus and states are increasingly emphasising on achieving ‘fairness’.

  1. WTO, ‘DS381: United States — Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products’ (2019) accessed on 27 April 2021 .
  2. Geraldo Vidigal, ‘From bilateral to multilateral law-making: legislation, practice, evolution and the future of inter se agreements in the WTO’ (2013) 24(4) European Journal of International Law 1027-1053
  3. Johannes Linn, ‘Recent Threats to Multilateralism’ (2018) 9(1-3) Global Journal of Emerging Market Economics 86-113.
  4. Stephan Keukeleire and Bas Hooijmaaijers, ‘The BRICS and Other Emerging Power Alliances and Multilateral Organizations in the Asia‐Pacific and the Global South: Challenges for the European Union and Its View on Multilateralism’ (2014) 2(3) JCMS: Journal of Common Market Studies 582-599.
  5. M Santoro, ‘Pfizer: Global protection of intellectual property’ (1995) Case study 9-392-073 Harvard Business School Publishing.
  6. L. R Helfer, ‘Regime shifting: the TRIPs agreement and new dynamics of international intellectual property lawmaking’ (2004) 29(1) The Yale Journal of International Law 1–581.
  7. Robert E. Baldwin, ‘Failure of the WTO ministerial conference at Cancun: reasons and remedies’ (2006) 29(6) World Economy 677-696.
  8. Ibid.

The increase in bilateral and regional free trade agreements is an example of contested multilateralism where states are finding stronger alternatives to WTO where they could push their interests. One example why states are entering more of bilateral and regional agreements may be the time consuming consensus building exercise in WTO. Nakagawa (2012) pointed out time consuming agreement between member states as the main reason for failure on decision making. Nakagawa (2012) pointed out that the consensus building in the WTO takes a long time and multiple steps. Small group of countries, which represent the different views, firstly try to resolve their differences. Secondly, the product of their efforts is presented to the larger groups of countries. The multiple steps are aimed at converging more views. This represents an inclusive approach to decision making. These steps are conducted for each item of negotiation. Hence, a time consuming negotiation approach becomes the norm. This results in failure to achieve a package deals between the WTO members as the time consuming process makes a coalition more challenging when a range of items is brought to negotiation.

Multilateralism or regionalism

Multilateralism still matters in regard to the development of international economic law. This is especially crucial considering the interests of the developing countries finding a place in the international trade order. Alessandrini (2010) pointed out two assumptions on the Doha ‘Development’ Round. Firstly, there is an imbalance in the multilateral trading regime of the WTO and that the international community has invested effort to address this issue keeping in regard the position of the developcountry members of the WTO. Secondly, the successful conclusion of the Doha ‘Development’ Round signifies a significant political necessity and historical imperative for developing countries. These assumptions demonstrate the important role of multilateral agreement in an international trade system where a balance is required to liberate trade internationally. This section of the essay will explore in details the contribution of multilateralism to development of economic law and production of important power relations. It will also assess aspects of regional trade system to understand the effectiveness of multilateral trade agreements when compared with regional trade agreements. This section will assess the place of regional trading system rules in the global trading system, such as WTO.

  1. Ibid.
  2. Junji Nakagawa, ‘Multilateralism and regionalism in global economic governance’ in Junji Nakagawa (ed), Multilateralism and Regionalism in Global Economic Governance: Trade, Investment and Finance (Taylor & Francis 2012) 11-12.
  3. Ibid.
  4. Ibid, 12.
  5. Donatella Alessandrini, Developing Countries and the Multilateral Trade Regime: The Failure and Promise of the WTO's Development Mission (Bloomsbury Publishing 2010).

Estevadeordal, Suominen and Teh (2009) pointed out that all countries are members of at least one regional trade agreement. The economic importance of regional trade agreements cannot be ignored as they are increasingly regulating trade in goods and services, standards, IPs, competition rules and many other subjects. As seen in the earlier section, the rise in bilateral and regional agreements is a sign of contested multilateralism where states are finding alternatives to fill the gap left by multilateralism. At the same time, whether or not such agreements will face adjustment issues with the body of rules governing international trade, such as the WTO rules is a question that must also be addressed. There will be issues of reconciliating multilateralism and regionalism. This is seen in issues concerning integration and industrial policy under both regional-bilateral and multilateral trade agreements. New development regarding developmental trade-offs between the two kinds of agreements could be observed. For example, there is an increased accessed gained by developing countries to specialised market and opportunities in exchanged for diminished space meant for industrial policy instruments creating new productive capacities. The trade-offs receives higher degree in case of regional-bilateral agreements where there is exchange of more market access against significantly deeper concessions regarding inward investment and intellectual policy. Such trade-offs have created constraints on multilateral environment and more so on regional and bilateral environments that shape market access. The conditions created by such tradeoffs and conditions imposed by regional and bilateral environments have forced states to give up multilateral tools of integrating developmental benefits into the international economy.

The WTO is a trading system established out of multilateral rules that facilitates beneficial trade liberalisation amongst members. However, developments so far have seen that economic rules created out of negotiation amongst states may not be that multilateral as states with more power are advancing economic rules and trade agreement advantageous to them. Such rules are, thus, subject to the bicycle theory as Thomas (2015) pointed out earlier. Successful negotiations decide the success of an international trade law. However, do they serve the purpose of multilateral rules of trade liberalisation? Baldwin (2016) pointed out that WTO, as a rule-based trading system, base its practices on norms universally accepted and respected by its members. However, it is still suffering mostly due to the negotiation challenges, for instance the stagnation of the Doha Development Round. This has not stopped the members from massive tariff liberalisation, bilaterally, regionally, and unilaterally, during the recent decade. The liberalisation was done without involving WTO. The trade rules are less focussed tariffs, but more protection of investments and intellectual property and compliance with legal and regulatory steps with the ultimate objective of easy flow of goods, services, investment, and people. This forms a contested multilateralism as discussed earlier. The creation of Doha Development Agenda, its failure and the developed nations’ resort to traditional intrusive economic strategies and the new emerging power of some developing countries such as India and China are signs of contested multilateralism, which means these countries have an impactful influence on the WTO. The Doha Development Agenda reflected that developing countries must be prioritised to benefit more from trade liberalisation, which also means the developing countries constitute majority of the WTO. There is an apparent demand for rebalancing power in the WTO. Despite such developments, the developed nations or regions, such as the US or the EU reverted to their traditional strategy of gaining market access, which is however met by new balance of power constituted by countries led by India and Brazil.

  1. Antoni Estevadeordal, Kati Suominen and Robert Teh, ‘Introduction’ in Antoni Estevadeordal, Kati Suominen and Robert Teh (eds), Regional Rules in the Global Trading System (Cambridge University Press 2009) 1-2.
  2. Kenneth C. Shadlen, ‘Exchanging development for market access? Deep integration and industrial policy under multilateral and regional-bilateral trade agreements’ (2006) 12(5) Review of International Political Economy 750-775.
  3. Ibid.
  4. Ibid.
  5. Richard Baldwin, ‘The World Trade Organization and the future of multilateralism’ (2016) 30(1) Journal of Economic Perspectives 95-116.

The emergence of rights of states to enter in agreements, whether bilaterally or regionally, is an indication for the WTO to recognise the new trend in order to effectively govern international trade. If one sees WTO rules, they are binding on regional agreements. It also means that it is not just multilateralism, but also bilateral and regional agreements that can led to development of global economy. Schill (200) observes that in the sphere of international investment protection, it is the bilateral treaties rather than multilateralism that are creating institutions necessary for the stabilisation and development of global economy. Where multilateralism has failed, bilateral agreements have filled the gap. The extent of the failure of multilateralism could be seen in the rapid pace of concluding regional and bilateral trade pacts in Asia. These pacts are not affected or impacted WTO negotiations. The pacts facilitate integrated production in Asia and consolidate economic interests of the major powers of Asia. At the same time, these power cannot shy away from WTO as their major markets are in the United States and Europe. The presence of regional agreements and the WTO presents two competing set of regime. There is now a continuous negotiation between regional pacts and multilateral rules. This situation presents a contradiction with value of a multilateral trading system, such as the WTO. The value is beyond important achievements including tariff reductions and prevention of a global trade war. It is based on certainty and transparency. However, this value cannot be stated to have been achieved when there are delays in reaching a collective consensus. As seen earlier too, major trading actors have entered into trade agreements outside the WTO norms. The slow time consuming process of consensus has frustrated many a state members. Aggravating the problem, members have also resorted to trade and economic strategies and behaviours that do not align with norms promoting trade liberalisation and economic integration.

  1. Ibid.
  2. Richard Baldwin, ‘The World Trade Organization and the future of multilateralism’ (2016) 30(1) Journal of Economic Perspectives 95-116.
  3. Sandra Polaski, ‘The future of the WTO’ (2006) Policy Outlook 28.
  4. Stephan W. Schill, The Multilateralization of International Investment Law (1st ed., New York: Cambridge University Press 2009) 363.
  5. Sandra Polaski, ‘The future of the WTO’ (2006) Policy Outlook 28 accessed on 27 April 2021 .

The competing interests between regional agreements and multilateral agreement is a product of multilateralism. This has been seen with respect to WTO as discussed earlier with reference Article 3(2) of Understanding on rules and procedures governing the settlement of dispute. WTO rules or multilateralism is a product of continuous negotiation between states and laws are made to adapt to the conduct of the states. The inclusiveness characteristics of multilateralism is the overall guiding principles for states to negotiate trade deals as well as to redress disputes. Thus, from this perspective the focus of WTO rules on transparency, certainties and the overreaching principle of freedom of state to trade even outside WTO can be seen as the core characteristics of WTO multilateral rules. There are arguments that WTO rules are not bringing certainties. However, they also at the same does not restrict member states to redress their issues within their agreements. Glania and Matthes, while assessing trade policy options in respect to the EU between multilateralism and regionalism, observe that some may argue regional trade agreements discriminate other third countries that are outside the agreement. At the same time, one of the multilateral rules as found in WTO rules as well is the principle of most-favoured nation treatment, which treats all foreign products equally in order to prevent trade distortion. This principle also ensures that imports to a country comes from the most efficient supplier. However, this principle cannot take way the political realities, which has been seen since the adoption of GATT that free trade agreements should not be renounced. This means that multilateral rules allow regional trade arrangements. Regional pacts reduce trade barriers and serve the purpose of trade liberalisation, which is the aim of multilateralism and also WTO rules. This characteristic of regional agreements is recognised GATT, for example Article XXIV that provides for contracting parties withing their territories the formation of free trade areas or customs union. Such creation of free trade agreements should be transparent and WTO members must be informed, which allows non-parties to exert influence on the agreements. The agreements are bound to WTO trade rules, for example, 10 years period limitation for trade liberalisation prohibiting cherry-picking in regard to tariffs. However, still, despite the recognition of regional agreements by WTO rules, it remains an issue that the rules are vaque and complicated allowing competing interests in the form of multilateral agreements and the regional agreements. This could be taken as a positive implication allowing free trade as well as a negative implication allowing preceding of individual states’ interest over collective interests envisioned by multilateralism. Ultimate, the very fact that multilateral rules such as WTO rules are still relevant and act as the guiding principles of agreements, whether regional or multilateral, highlights the importance of multilateralism, but not at the expected manner of governing collective actions and trading and economic rules between member states.

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  1. Robert Koopman, John Hancock, Robert Piermartini, and Eddy Bekkers, ‘The Value of the WTO’ (2020) 42(4) Journal of Policy Modeling 829-849.
  2. Guido Glania and Jürgen Matthes, Multilateralism Or Regionalism? Trade Policy Options for the European Union (Centre for European Policy Studies 2005) 38-39.
  3. Ibid, 40.
Conclusion

Multilateralism represents states coordinated practices in regard to trade and economic policies governing them. The coordinated inter-relations create economic interdependences and a global institution of rules. The WTO is an example of such coordinated inter-relations and trading and economic rules. However, the rules are subject to negotiation between states. No rules can be created if the states fail their negotiation. This is illustrated by the failure of the WTO to act as a forum of trade liberalisation, for example, in failed Uruguay Round or the delay in Doha Development Agenda. Thus, multilateralism contributes to development of economic rules subject to the conditions that states succeed in their negotiation. For example, enforcement of GATT, Article XX(g) in the US- Shrimp case is an example of a rule successfully negotiated and agreed. However, this is applicable only until states have accommodated new norms. In this context, this essay has found that multilateralism signifies states’ contractual agreed terms and not the law or the WTO rules itself. A rule is not a rule if not practiced by states or accepted by states. The accepted rule remains merely rules ad multilateralism, such as Article 3(2) of Understanding on rules and procedures governing the settlement of dispute that allows states freedom to implement their trade agreements outside WTO rules.

This essay has also found a new aspect to multilateralism, including WTO rules. The rules are no longer just economic or trade rules. They have implication impaction civil society norms, which raises the complexity of multilateralism where states are pushing for their issues to be integrated in the mandates of multilateral institutions. The inclusion of many non-state actors and other civil issues have impacted the global economic growth. An uneven standard of multilateralism has affected the trade liberalisation objective of multilateralism. However, such change or challenges have also led to change on regime setting from WIPO to WTO in regard to intellectual property. WTO rules are ever changing depending on trading, political and civil society practices or norms. Shift in regime or regime setting indicates development of new economic rules, for which is the example of change from WIPO to WTO. This essay has thus found that change to ever increasing pace of bilateral and regional free trade agreements has impacted multilateralism negatively. At the same time, the WTO rules allowing such agreements also indicates the trade liberation objective of multilateralism. Contested multilateralism create new economic rules, whether through multilateralism itself or through regional agreements.

  1. Ibid, 41.

The existence of new regional agreements has thus brought the issue reconciliation between multilateralism and regionalism. This essay has found two sides of the arguments. The new tools in the form of regional agreements presents a continuous tradeoffs that have affected tools of multilateral or collective actions. These tradeoffs as well as actions on multilateral agreements present similar effect where economic rules are created out of negotiation with states possessing more power advance economic rules and trade agreement advantageous to them. Thus, to reiterate successful negotiations decide the success of an international trade law. WTO was once successful in shifting regime from WIPO to WTO. It is not now as regional tradeoffs are creating successful economic rules. The competing interests between these regional tradeoffs and multilateral rules of that of WTO is a product of multilateralism. This essay, has however, found that multilateral rules are still relevant in developing new economic rules, but not at the expected manner as regional agreements cannot be considered collective actions unless the negotiations in WTO or multilateralism is only through regional pacts.

Books

Alessandrini D, Developing Countries and the Multilateral Trade Regime: The Failure and Promise of the WTO's Development Mission (Bloomsbury Publishing 2010)

Barton JH, Judith L. Goldstein, Timothy E. Josling and Richard H. Steinberg, The Evolution of the Trade Regime: Politics, Law, and Economics of the GATT and the WTO (Princeton University Press 2010)

Estevadeordal A, Kati Suominen and Robert Teh, ‘Introduction’ in Antoni Estevadeordal, Kati Suominen and Robert Teh (eds), Regional Rules in the Global Trading System (Cambridge University Press 2009)

Glania G and Jürgen Matthes, Multilateralism Or Regionalism? Trade Policy Options for the European Union (Centre for European Policy Studies 2005)

Nakagawa J, ‘Multilateralism and regionalism in global economic governance’ in Junji Nakagawa (ed), Multilateralism and Regionalism in Global Economic Governance: Trade, Investment and Finance (Taylor & Francis 2012)

O'Brien R, Anne Marie Goetz, Jan Aart Scholte and Marc Williams, Contesting Global Governance: Multilateral Economic Institutions and Global Social Movements (1st ed., Cambridge: Cambridge University Press 2000)

Schill SW, The Multilateralization of International Investment Law (1st ed., New York: Cambridge University Press 2009)

Journals

Baldwin RE, ‘Failure of the WTO ministerial conference at Cancun: reasons and remedies’ (2006) 29(6) World Economy 677-696

Cottier T, ‘The common law of international trade and the future of the World Trade Organization’ (2015) 18(1) Journal of International Economic Law 3-20

Linn J, ‘Recent Threats to Multilateralism’ (2018) 9(1-3) Global Journal of Emerging Market Economics 86-113

Helfer LR, ‘Regime shifting: the TRIPs agreement and new dynamics of international intellectual property lawmaking’ (2004) 29(1) The Yale Journal of International Law 1–581

Keukeleire S and Bas Hooijmaaijers, ‘The BRICS and Other Emerging Power Alliances and Multilateral Organizations in the Asia‐Pacific and the Global South: Challenges for the European Union and Its View on Multilateralism’ (2014) 2(3) JCMS: Journal of Common Market Studies 582-599

Koopman R, John Hancock, Robert Piermartini, and Eddy Bekkers, ‘The Value of the WTO’ (2020) 42(4) Journal of Policy Modeling 829-849

Polaski S, ‘The future of the WTO’ (2006) Policy Outlook 28

Shadlen KC, ‘Exchanging development for market access? Deep integration and industrial policy under multilateral and regional-bilateral trade agreements’ (2006) 12(5) Review of International Political Economy 750-775

Vidigal G, ‘From Bilateral to Multilateral Law-making: Legislation, Practice, Evolution and the Future of Inter Se Agreements in the WTO’ (2013) 24(4) European Journal of International Laws 1027–1053

Websites

WTO, ‘DS58: United States — Import Prohibition of Certain Shrimp and Shrimp Products’ (2001) accessed on 27 April 2021

WTO, ‘DS381: United States — Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products’ (2019) accessed on 27 April 2021

WTO, ‘DS406: United States — Measures Affecting the Production and Sale of Clove Cigarettes’. (2014) accessed on 27 April 2021

WTO, ‘Relevant WTO provisions: text of 1994 decision’ accessed on 27 April 2021

Others

Santoro M, ‘Pfizer: Global protection of intellectual property’ (1995) Case study 9-392-073 Harvard Business School Publishing

The Understanding on rules and procedures governing the settlement of disputes, Article 3(2).


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