Browsing by Subject "World Trade Organization"
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(2023)In 2021, the European Commission proposed a regulation implementing a carbon border adjustment mechanism. The primary objective of the mechanism is to curb the risk of carbon leakage. In addition, the mechanism should encourage the Union’s trade partners to implement carbon pricing measures to reduce greenhouse gas emissions and mitigate climate change. The use of border adjustments to pursue climate goals are disputed in terms environmental effectiveness. In the broader policy scope, unilateral climate measures are considered controversial due to their potential discriminatory policy effects on international trade. The carbon border adjustment mechanism highlights the complex and challenging relationship between the two most prominent multilateral questions, international trade and environmental concerns. Since the announcement of the mechanism, the Union’s trade partners have expressed opposition to the introduction of carbon taxes on the Union’s borders. In particular, the incompatibility of the mechanism with the rules of the World Trade Organization has been heavily emphasized. Potentially, the Union’s partners may move to lodge cases against the Union, in the dispute settlement body of the World Trade Organization. Although, the use of environmental measures with trade effects have been discussed by the dispute settlement bodies, the interpretation of the compatibility of climate measures with the rules of the GATT remain inconclusive. The mechanism may offer an opportunity for the organisation to actively strengthen the environmental agenda within trade. In the absence of political will of the membership to pursue reform, the Union may be required to resort to alternative policy tools to further its climate policy goals. Vuonna 2021, Euroopan Komissio esitti ehdotuksen, jolla otetaan käyttöön hiilirajamekanismi. Mekanismin päätavoitteena on välttää hiilivuotoa sekä kannustaa Unionin kauppakumppaneita ottamaan käyttöön päästökauppajärjestelmiä kasvihuonekaasupäästöjen vähentämiseksi ja ilmastonmuutoksen torjumiseksi. Rajatullien käyttö ilmastotavoitteiden saavuttamiseksi on kiistanalainen ympäristötehokkuuden kannalta. Ilmastopolitiikassa laajemmin, yksipuolisia ilmastotoimia pidetään kiistanalaisina, sillä niillä voi olla syrjiviä vaikutuksia kansainväliseen kauppaan. Hiilirajamekanismi korostaa kansainvälisen kaupan ja ympäristötoimien hankalaa suhdetta. Mekanismin julkistamisen yhteydessä, unionin kauppakumppanit ovat ilmaisseet vastustavansa hiiliverojen käyttöönottoa unionin rajoilla. Erityisesti mekanismin yhteensopimattomuutta Maailman kauppajärjestön sääntöjen kanssa on korostettu voimakkaasti. Unionin kumppanit voivat mahdollisesti nostaa kanteita unionia vastaan Maailman kauppajärjestön riitojenratkaisuelimessä. Vaikka ympäristötoimenpiteiden käyttöä, joilla on kaupallisia vaikutuksia, on käsitelty riitojenratkaisuelimissä, tulkinta ilmastotoimenpiteiden yhteensopivuudesta GATT -sääntöjen kanssa on edelleen epäselvä. Mekanismi voi tarjota organisaatiolle mahdollisuuden vahvistaa ympäristöohjelmaa maailmankaupassa. Jos jäsenillä ei ole poliittista tahtoa jatkaa uudistuksia, unioni voi joutua turvautumaan vaihtoehtoisiin välineisiin ilmastopoliittisten tavoitteidensa edistämiseksi.
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(2020)The World Trade Organization (WTO) is in an effective deadlock, as both its judicial and negotiation functions have stagnated. It has proven impossible to achieve meaningful resolutions with single undertaking trade negotiation rounds that require the consensus of the membership, and the latest negotiation round never saw closure since its stalling in 2008. The United States has been refusing to appoint new judges to the Appellate Body of the dispute settlement system in the organization, blocking consensus on the nomination procedures since 2003. In December 2019, the Appellate Body lost its quorum, and the United States has no intention of replacing the retired judges until the system goes under fundamental reform. As a result of the deadlock and the deepening polarization of its members’ interests, the need and the role of the organization have become topics of intense discussions. Many member states have opted out of the current system by concluding regional trade agreements that breach the Most Favoured Nation principle and other WTO rules on their face. Environmental and humanitarian crises further stir the pot as they are attributed to how liberalization of trade has been governed since the World War II. For many, the future of the WTO cannot exclude the mitigation of these crises, and it has to move beyond tariff setting. The thesis is concerned with how the relic of the consensus requirement enabled the operations of the WTO to cease, and what the role of the multilateral organization should be in a world where globalization has shifted the economic status quo and the impact of trade governance expands beyond issues of market access. The questions are approached by researching both the consensus requirement and the role of the organization historically and critically. Law and economics analysis provides compelling justifications and a crucial role for the organization in global trade governance. The hypothesis is that the organization must find a way to attenuate the consensus requirement to get past the deadlock. Furthermore, the organization would have to assume a more comprehensive role in the protection of public goods in order to be economically justifiable. The paper consists of four substantive sections excluding introduction and conclusions. After introduction, the second section discusses background, comprising of two chapters, first on the history of the trade organization and second on the theoretical basis for the consensus rules. It is followed by section three, devoted to the phenomena behind the downturn of multilateralism. It is also divided into two chapters, the first focusing on the United States’ approach to the dispute settlement issue, the second on the global trends. Section four provides a defence for the multilateral rules-based system, split into economic and public justifications chapters. The fifth section provides for reform suggestions, with the first chapter discussing Open Plurilateral Agreements (OPAs) and the second more structural reform. The conclusion of the paper is that the WTO is indeed urgently needed, and OPAs are a suitable instrument for consensus attenuation despite the inevitable collective action problems. There is a need to subordinate economic objectives to ensure sustainability and overall welfare, and therefore the role of the WTO as a mere tariff setter is not economically justified. It must assume a role that is more akin to a global trade department in order to practice and ensure a more equitable redistribution of wealth. Giving non-state actors a role in the organization is crucial in order to release tensions of the competitive trade bargaining. The Dispute Settlement Mechanism (DSM) is a requisite element of a multilateral organization, and needs to be restated by renewing its mandate. New eligibility criteria and a permanent status for the DSM panellists would ensure the quality and stability of its operations, rendering the second-instance Appellate Body (AB) unnecessary. The consensus decision making method could be made useful again by subjecting it to a shadow of a vote, encouraging meaningful negotiations.
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