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1. The WTO's Existential Crisis: How to Salvage Its Ability to Settle Trade Disputes

Author:
Jeffrey J. Schott and Euijin Jung
Publication Date:
12-2019
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
US refusal to allow the appointment of new judges (or members) to the World Trade Organization’s Appellate Body—a key component of its renowned dispute settlement system—has pushed the organization into an existential crisis. The Appellate Body no longer has the requisite number of members to hear new cases on appeal. The terms of two of the three remaining members have expired, leaving the WTO without an appeal function. US officials charge that certain Appellate Body decisions on WTO dispute panel rulings have expanded WTO obligations and constrained WTO rights—what trade lawyers call “judicial overreach”—and so they have blocked the appointment of new Appellate Body members until other WTO countries address US complaints. Schott and Jung analyze the WTO cases brought against the United States and find that the problem of judicial overreach seems to surface primarily in a subset of US losses in antidumping and countervailing duty (AD/CVD) cases that target specific methods of calculating dumping margins. They warn that disabling the whole appellate system is a disproportionate response to the specific problem. It will weaken enforcement of WTO obligations and undermine prospects for negotiations to update the WTO rulebook, thus corroding the rules-based trading system, one that has been modeled on US law and practice. A better approach would be to exempt AD/CVD cases from appellate review (while still subjecting them to dispute panel rulings). This targeted change in the WTO Appellate Body process, coupled with procedural reforms already advanced in proposals that have been widely supported by WTO members, could mitigate US concerns and allow the Appellate Body to be repopulated.
Topic:
Government, World Trade Organization, Law, Judiciary, and Trade
Political Geography:
North America and United States of America

2. Korea and the TPP: The Inevitable Partnership

Author:
Jeffrey J. Schott
Publication Date:
08-2015
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Korea's decision to delay joining the Trans-Pacific Partnership (TPP) talks was a tactical mistake. It is now left with primarily two options to participate: (1) ask to join the TPP, if possible between signature and entry into force, or (2) accede to the TPP after the agreement is ratified and goes into effect—either alone or as part of a group of countries seeking TPP membership. For Korea the burden of adjustment in the TPP—in terms of liberalization commitments—will probably be higher than had it joined as an original signatory. As a major trading nation, it stands to reap large gains from increased trade and investment with TPP countries and should opt to join the TPP as soon as the window for entry reopens.
Topic:
Economics and Treaties and Agreements
Political Geography:
South Korea

3. A Proposed Code to Discipline Local Content Requirements

Author:
Gary Clyde Hufbauer, Jeffrey J. Schott, and Cathleen Cimino
Publication Date:
02-2014
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Proponents of liberalized trade and finance were relieved when the global economic crisis in 2008 produced a broad range of pledges from countries around the world to avoid new barriers to trade and investment (see Evenett 2013). These promises, designed to avert a replay of the Great Depression of the 1930s, were largely honored when it came to classic forms of protection (tariffs and quotas). But the spirit of that pledge was violated as countries shifted from traditional forms of protection to behind-the-border nontariff barriers (NTBs), including local content requirements (LCRs)—policies mandating that local suppliers of goods, services, and even entire projects be favored by governments and private firms, even when foreign firms offer lower costs, better quality, and faster delivery.
Topic:
Debt, Economics, International Trade and Finance, Markets, Financial Crisis, and Reform

4. The Next Big Thing? The Trans-Pacific Partnership Latin America

Author:
Jeffrey J. Schott and Barbara Kotschwar
Publication Date:
04-2014
Content Type:
Journal Article
Journal:
Americas Quarterly
Institution:
Council of the Americas
Abstract:
The hottest topic in world trade these days is the Trans-Pacific Partnership (TPP). Hailed as a state-of-the-art free trade agreement (FTA), it will unite 11 countries—Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam—with a combined GDP of almost $21 trillion (about 30 percent of world GDP) and $4.4 trillion in exports of goods and services, or about a fifth of total world exports. If you add Japan and South Korea—who are actively exploring entry later this year—TPP would cover 40 percent of world GDP and nearly a third of world exports.
Political Geography:
United States, Malaysia, Canada, Latin America, Singapore, Peru, New Zealand, and Brunei

5. Should Korea Join the Trans-Pacific Partnership?

Author:
Jeffrey J. Schott and Cathleen Cimino
Publication Date:
09-2014
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
The negotiation of the Trans-Pacific Partnership (TPP), a megaregional agreement to lower barriers to trade and investment and promote economic integration in the Asia-Pacific region, has been a dynamic process with a number of countries joining the talks in midstream. Since negotiations began in March 2010, participation in the TPP talks has expanded several times to include Malaysia (October 2010), Vietnam (December 2010), Canada and Mexico (October 2012), and Japan (July 2013). In November 2013, Korea announced its interest in participating in the TPP and began consulting with the countries involved. The TPP now has 12 participants. Korea is still considering whether to become lucky 13.
Topic:
Economics, International Trade and Finance, and Bilateral Relations
Political Geography:
Malaysia, Canada, Asia, Vietnam, Korea, and Mexico

6. Financial Services in the Transatlantic Trade and Investment Partnership

Author:
Simon Johnson and Jeffrey J. Schott
Publication Date:
10-2013
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
In July 2013, the United States and the European Union launched negotiations on a Transatlantic Trade and Investment Partnership (TTIP). The talks aim to craft a comprehensive accord matching or exceeding the reforms achieved in their previous trade pacts. Since both sides have included financial services in prior free trade agreements (FTAs), they implicitly recognized that the TTIP accord would also cover this sector. But what will be included in the financial services chapter is still subject to debate.
Topic:
Economics, International Trade and Finance, Treaties and Agreements, and Bilateral Relations
Political Geography:
United States and Europe

7. Will the World Trade Organization Enjoy a Bright Future?

Author:
Gary Clyde Hufbauer and Jeffrey J. Schott
Publication Date:
05-2012
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Our answer is a resounding “yes.” This answer does not rest simply on the World Trade Organization's proven competence as a judicial body nor its acknowledged expertise in gathering statistics and analyzing trends. Crowning these strengths, we see the dawn of a new era of trade and investment negotiations within the halls of the WTO.
Topic:
Economics, International Trade and Finance, Treaties and Agreements, and World Trade Organization

8. Prospects for Services Trade Negotiations

Author:
Jeffrey J. Schott, Julia Muir, and Minsoo Lee
Publication Date:
10-2012
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Trade and investment in services are difficult to measure, and the regulatory barriers that inhibit the free flow of services are hard to quantify. As a result, very little attention has been paid to dismantling barriers to services trade and investment. Rather, free trade negotiations tend to focus on liberalizing merchandise trade. This paper examines what has been achieved in both regional and multilateral compacts by surveying international precedents involving Asian countries in which services reforms have been included in bilateral and regional trade pacts. The authors then assess the prospects for services trade negotiations and explore how services trade negotiations could be pursued over the next decade through two distinct channels: the Trans-Pacific Partnership (TPP) and a plurilateral approach among groups of WTO countries. The authors find that in the case of developing Asia, free trade agreements have largely excluded services or have only committed to "lock in" current practices in a narrow subset of service sectors. This is also the case in agreements negotiated between developing countries, which have produced less substantial commitments to liberalize services than those negotiated between developing and developed countries. Multilateral negotiations on services have also underperformed, as substantive negotiations on services in the Doha Round never really got underway. To that end, the authors advocate a stronger effort by developing Asian countries to prioritize services negotiations in their regional arrangements and to expand coverage of services in those pacts to a broad range of infrastructure services that are included in other FTAs in force or under construction in the Asia-Pacific region.
Topic:
International Relations, Development, Economics, Globalization, International Trade and Finance, Markets, and World Trade Organization
Political Geography:
Asia

9. What Should the United States Do about Doha?

Author:
Jeffrey J. Schott
Publication Date:
06-2011
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
The Doha Round of multilateral trade negotiations in the World Trade Organization (WTO) remains stalled despite the political impetus provided by the Seoul G-20 Summit in November 2010. The major trading nations have not revised their positions enough to propel new negotiations on agriculture, manufactures, and services. There is now little chance to complete an agreement this year and little indication that current efforts could succeed next year.
Topic:
Economics, International Cooperation, and International Trade and Finance
Political Geography:
United States

10. KORUS FTA 2.0: Assessing the Changes

Author:
Jeffrey J. Schott
Publication Date:
12-2010
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
On December 3, 2010, the United States and South Korea agreed to incremental changes to the Korea-US Free Trade Agreement (KORUS FTA) that was signed in June 2007 but not ratified by the US Congress or the Korean National Assembly. Most of the changes affect bilateral trade in autos and light trucks; other minor changes involve pharmaceutical patents, US pork exports, and US visas.
Topic:
International Trade and Finance, Treaties and Agreements, and Bilateral Relations
Political Geography:
United States and South Korea