A Really Big Button that Doesn’t Do Anything? The ‘Anti-China Clause’ in US Trade Agreements

Amsterdam Law School Research Paper No. 2019-43

Amsterdam Center for International Law No. 2019-21

18 Pages Posted: 23 May 2019 Last revised: 2 Dec 2019

Date Written: April 24, 2019

Abstract

The United States-Mexico-Canada Agreement (USMCA) features a clause dubbed ‘anti-China’, which sets out legal consequences in case one of the parties negotiates or enters into a free trade agreement (FTA) with a ‘non-market country’ (NME). A similarly-worded objective appears among the negotiating objectives of the US for FTAs with the European Union, Japan, and the United Kingdom. This paper examines the anti-NME clause, arguing that its legal effects are less relevant than its symbolic value. The USMCA clause is difficult to replicate in bilateral agreements, since it depends on cooperation between the two non-signing parties. However, the similarity between its effects and those of two unilateral remedies available under the law of treaties leads to the reasonable expectation that the clause, if it follows its original design, will aim to permit termination of the FTA in response to the other party entering into an NME FTA. While the clause would offer little in terms of concrete legal effects if added to agreements that have a withdrawal clause, its greatest value may not be in its concrete effects but in its legitimating and signaling properties.

Keywords: USMCA; International Trade Law; Law of Treaties

JEL Classification: K33

Suggested Citation

Vidigal, Geraldo, A Really Big Button that Doesn’t Do Anything? The ‘Anti-China Clause’ in US Trade Agreements (April 24, 2019). Amsterdam Law School Research Paper No. 2019-43; Amsterdam Center for International Law No. 2019-21. Available at SSRN: https://ssrn.com/abstract=3377492 or http://dx.doi.org/10.2139/ssrn.3377492

Geraldo Vidigal (Contact Author)

University of Amsterdam ( email )

P.O. Box 1030
Amsterdam, 1000 BA
Netherlands

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