ISPI Re-Launching International Trade June 6, 2019

Is a new Global Crisis possible?

A New Global Crisis and

the WTO 2.0Yuka Fukunaga

Waseda University

I. Introduction

•Bretton Woods SystemGreat Depression

1929-1939

•Free trade agreementsFinancial Crisis in Asia 1997-1998

•Trade monitoring reportsGlobal Financial Crisis 2007-2008

• World trading order: WTO 2.0?

A new financial crisis 20??-20??

II. Rule-Making in the WTO

a. Reality check

Limited success

Expansion of the Information Technology Agreement (ITA)

Trade Facilitation Agreement (TFA)

Failed or stalled attempts

Doha Development Agenda (DDA)

Trade in services (TiSA) negotiations

Environmental Goods Agreement (EGA) negotiations

Ongoing attempt

Fisheries subsidies

b. Recent developments

Electronic Commerce

Joint Declaration on Electronic Commerce, 13 December 2017

“We … will initiate exploratory work together toward future WTO

negotiations on trade related aspects of electronic commerce.”

Joint Declaration on Electronic Commerce, 25 January 2019

“We confirm our intention to commence WTO negotiations on

trade-related aspects of electronic commerce.”

Speech by Prime Minister Abe, 23 January 2019

“Let Osaka G20 set in train a new track for looking at data

governance – call it the Osaka Track – under the roof of the WTO.”

“The regime we must build is one for D.F.F.T., Data Free Flow with

Trust.”

c. Hope

Adoption of a new agreement on the trade related

aspects of electronic commerce

Multilateral

Plurilateral

Amendments to the existing WTO Agreement

GATS

Telecommunications Reference Paper

Moratorium on Customs Duties on Trade in Goods

TRIPS Agreement

d. Caution: Electronic commerce is very different from conventional trade.

Conventional trade negotiations

Karate practitioner breaking walls

Electronic commerce negotiations

whack-a-mole game

III. Dispute Settlement in the WTO

a. Reality check

Appellate Body in crisis

Only three Appellate Body members remain.

Two of them will be leaving at the end of 2019.

Crisis breeds crisis.

Rise in public distrust in the aftermath of the Appellate

Body’s findings in the dispute involving Korea’s import

bans and testing requirements on certain food products

from Japan

b. Recent developments

Proposals to improve the Appellate Body

Procedural issues

Rule 15

90 days

Overreach issues

Municipal law

Advisory opinion

Precedent

c. Hope

Adoption of a decision by the General Council or the

Dispute Settlement Body

…to confirm the limited mandate of the Appellate Body

under the WTO Dispute Settlement Understanding (DSU).

…to provide guidelines for the Appellate Body

Amendments to the DSU

…to facilitate dialogue between Members and the

Appellate Body

d. Caution: Now is the time to choose.

A functioning one-tiered dispute settlement is

better than an incapacitated two-tiered dispute

settlement.

IV.

How should

the WTO 2.0

look like?

• Guidelines

• Model law

• Nationally Determined Commitments

Rule-making: Soft law

• Monitoring

• Consultations on specific trade concerns

• Mediation

Rule-enforcement: Soft-enforcement

• Cooperation between regulators

• Involvement of stakeholders

• Participation of citizens

Regulatory process

V. Conclusion

G20 Osaka

Whether to reform the WTO

How to reform the WTO

WTO 2.0

Thank you for your attention.

Photo: Osaka Castle (Mc681)