Journal of International Economic Law - Advance Access

Aggressive Regionalism in Korea-U.S. FTA: the Present and Future of Korea's FTA Policy

Choi, W.-M. — 2009-06-23

The Korea–US Free Trade Agreement (FTA) is a result of a paradigm shift from traditional regionalism, which deals mostly with customs–border issues, to ‘aggressive regionalism’ that codifies a whole-scale problem-solving process. A series of age-old bilateral trade disputes, such as the automobile trade imbalance, unethical business practices in pharmaceuticals and medical devices and effective protection of copyrights, were actively addressed between Korea and the United States, and permanent solutions to the problems were sought in the form of stable and binding FTA rules. New global or regional issues, such as the non-implementation of WTO panel decisions and South and North Korea's economic cooperation, were also dealt with.

When negotiating future FTAs, Korea will continue to take the problem-solving approach based on this aggressive regionalism. Particular focus will be given to such sensitive issues regarding the trade remedy system, unfair business practices, sanitary and food safety and economic engagement policies towards North Korea. As Korea becomes part of more FTAs, transaction costs caused by fragmented FTAs will become an economic issue. In order to reduce the costs of the aggressive regionalism policy, Korea must adopt the advanced level of accumulation system for the rules of origin and it should endeavour to ultimately harmonize varying rules among FTAs. This strategy may start by linking to other FTAs. It is suggested that achieving such ‘multilateral regionalism’ should be a long-term task for Korea.

Does the WTO need a Permanent Body of Panelists?

Busch, M. L., Pelc, K. J. — 2009-06-09

There is a longstanding debate over the need for a permanent body of panelists at the World Trade Organization (WTO). Put most starkly by the European Communities (EC), the argument is that only full-time jurists would have the experience needed to render ‘better and more consistent rulings’ that could stand up under appellate review. India and the African Group, among others, challenge the logic of Europe's proposal and its empirical underpinnings. Our article weighs in on this debate, offering the first statistical test of the EC's hypothesis, that conditional on being appealed, rulings handed down by less-experienced panelists are more likely to be reversed. We find that experience matters, but only with regards to the panel's chair. Indeed, on appeal, panels led by experienced chairs are far less likely to have their rulings reversed by the Appellate Body; the experience of the other panelists, by comparison, is inconsequential. The implication is that rather than constituting a permanent body of panelists, the WTO would be better served by establishing a pool of permanent chairs. As for the timeliness of panel reports, which is Europe's—and the literature's—other outcome of interest, we find no evidence that judicial experience matters in the least.

Trade Integration in the CIS Region: A Thorny Path Towards a Customs Union

Shadikhodjaev, S. — 2009-05-22

One of the peculiarities of trade integration in the Commonwealth of Independent States (CIS) is that it was launched by non-WTO members. Nevertheless, their wish to integrate into the multilateral trading system induced them to incorporate WTO standards into their RTAs. Another distinctive feature is that integration in the CIS proceeds at diverse speed and different levels. CIS integration towards a customs union has taken place in three directions within the CIS economic union, the Eurasian Economic Community (EurAsEC) and the Single Economic Space (SES), though only the EurAsEC project has remained operational. Overlapping disciplines adopted within different regional frameworks are a barrier to intense trade integration, so certain coordination is needed. The formation of a EurAsEC customs union in parallel with the WTO accession talks is very challenging. Thus it is suggested to finalize the creation of the customs union either before or after the WTO accession of all EurAsEC members.