The Return of Voluntary Export Restraints? How WTO Law Regulates (and Doesn't Regulate) Bilateral Trade-Restrictive Agreements
27 Pages Posted: 16 May 2017
Date Written: May 15, 2017
This paper discusses the ways in which WTO law regulates (and doesn’t regulate) agreements between WTO Members that permit the parties to the agreement to adopt WTO-inconsistent measures (‘WTO-minus’). As part of the Uruguay Round Agreements, Members have agreed to prohibit bilateral agreements that provide protection outside of the means established in the WTO Agreements, whether within the framework of regional trade agreements or included in mutually agreed solutions to disputes. These prohibitions are part of a broader legal regime that aims to ensure that the WTO remains the forum for the negotiation of trade relations, establishing specific procedural avenues for rule modification. However, WTO rules as well as customary international law allow WTO-minus arrangements to influence WTO rules, and explicitly permit certain trade-restrictive agreements. Additionally, the institutional design of WTO dispute settlement ensures that Members can tolerate inconsistencies, allowing WTO-minus arrangements to remain operative as long as Members perceive them to be beneficial. On the other hand, bilateral agreements do not in themselves affect the WTO rights and obligations of Members, which WTO adjudicators must apply.
Keywords: WTO, Voluntary Export Restraints, Grey Area Measures, Regional Trade Agreements, Free Trade Agreements
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