Many proposals have been put forward to address the problematic nature of dispute settlement mechanisms found in regional trade agreements. This piece discusses two of them: using dispute settlement mechanisms under mega-regional agreements and resorting to existing arbitration and investment tribunals. The author argues that these proposals will amplify rather than solve existing problems, and concludes by suggesting that the World Trade Organization’s dispute settlement mechanism is the best forum for regional disputes. As multilateral trade negotiations in the WTO have slowly ground to a halt over the past decade, regional trade agreements (RTAs) have increasingly assumed the role of laboratories for new trade rules. These include not only issues on the original negotiating agenda of the WTO – such as trade in goods and services, trade-related intellectual property rights, investment, and electronic commerce – but also new issues beyond the existing WTO framework including competition, labour standards, environmental norms, and state-owned enterprises. Nowadays, it is fair to say that it is the RTAs rather than the WTO that lead the rule-making efforts on most emerging issues. Despite their success in setting the rules for international trade, RTAs have been much less successful in solving their disputes, at least judging...
Written by Henry Gao