FTAs in WTO Dispute Settlement

Kenta Hirami
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Kenta Hirami: Assistant Professor, Faculty of Social Sciences, Waseda University

Public Policy Review, 2020, vol. 16, issue 5, 1-18

Abstract: Although the co-existence of the World Trade Organization (WTO) and free trade agreements (FTAs) has now become normal, the legal relationship between them is unclear from many aspects. In this respect, in light of the relevant WTO jurisprudence, the following points can be mentioned with respect to the status and function of FTAs in WTO dispute settlement. First, the jurisdiction of a WTO panel is firmly based on the Dispute Settlement Understanding (DSU) from the viewpoints of panel’s obligation to examine a case on the one hand and Members’ right to initiate WTO dispute settlement proceedings on the other hand. Therefore, even if a dispute brought to a WTO panel is related to an FTA, the existence of the panel’s jurisdiction is not denied. This also applies to the assessment of the consistency of FTAs themselves with WTO provisions. Even so, secondly, in specific cases, the presence of an FTA could affect the exercise of a WTO panel’s jurisdiction. To be more specific, it is theoretically possible for parties of an FTA to waive their right as WTO Members to initiate WTO dispute settlement proceedings when they adopt an alternative option in that FTA, such as a “mutually agreed solution” (MAS) under the DSU, a forum selection clause and so on. Attention needs to be paid to how the relationship between the WTO dispute settlement system and FTAs explained above will affect future FTA negotiations and the interpretation of specific FTA provisions, and how much the WTO dispute settlement system will be able to contribute to the ordering of the legal relationship between the WTO and FTAs under the current multi-layered economic governance structure.

Keywords: WTO; FTAs; WTO dispute settlement; DSU; panel; Appellate Body; PeruAgricultural Products; standard of review (search for similar items in EconPapers)
JEL-codes: F13 K33 (search for similar items in EconPapers)
Date: 2020
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