Law and Development Perspective on International Trade Law

law and development perspective on

international trade law

Economic development is the most important agenda in the international trading system

today, as demonstrated by the Doha Development Agenda adopted in the current mul￾tilateral trade negotiations of the World Trade Organization (WTO; the Doha Round).

This book provides a relevant discussion of major issues in international trade law from

the perspective of development in the following areas: general issues on international

trade law and economic development and specific law and development issues in WTO,

Free Trade Agreement, and regional initiatives.

Although there are publications on trade and development issues, mostly discussing

developing countries, few deal comprehensively with law and development issues of

international trade law in its key areas. This book offers an unparalleled coverage of the

topic with its diversity of authorship, with seventeen scholars contributing chapters from

nine major countries, including the United States, Canada, Japan, China (including

Hong Kong), South Korea, Australia, Singapore, and Israel.

The Law and Development Institute (LDI) is a nonprofit, academic network with the

objective of promoting law and development studies and projects. Currently, more

than twenty leading scholars from various countries, including the United States,

Canada, Australia, Singapore, Japan, Korea, and Israel, participate in the LDI. Fur￾ther details about the LDI and its projects are presented on its Web site, http://www

.lawanddevelopment.net.

Yong-Shik Lee is the founding Director and Professorial Fellow of the Law and Devel￾opment Institute and the founding Editor-in-Chief of the Law and Development Review.

He has developed the concept of microtrade and authored high-profile publications on

international trade, including Safeguard Measures in World Trade: The Legal Analysis

(2007) and Reclaiming Development in the World Trading System (Cambridge University

Press 2009).

Gary N. Horlick is a highly ranked international trade lawyer by Chambers, Euromoney

Institutional Investor, and Who’s Who Legal. He has represented leading U.S. and

global companies and more than twenty countries in international trade negotiations

and disputes, and has chaired WTO and MERCOSUR dispute panels.

Won-Mog Choi is Professor of International Trade Law and Director at the WTO Law

Center of the Ewha Law School in Seoul. His recent publications include Defragmenting

Fragmented Rules of Origin of RTAs: A Building Block to Global Free Trade.

Tomer Broude is Senior Lecturer at the Hebrew University of Jerusalem in the Faculty

of Law and Department of International Relations and the Academic Director of the

Minerva Center for Human Rights in Jerusalem. His most recent publications include

The Politics of International Economic Law (editor, with Marc L. Busch and Amy Porges;

Cambridge University Press 2011).

Law and Development Perspective

on International Trade Law

THE LAW AND DEVELOPMENT INSTITUTE

Edited by

YONG-SHIK LEE

GARY N. HORLICK

WON-MOG CHOI

TOMER BROUDE

cambridge university press

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Singapore, Sao Paulo, Delhi, Tokyo, Mexico City ˜

Cambridge University Press

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Information on this title: www.cambridge.org/9781107011618

C Cambridge University Press 2011

This publication is in copyright. Subject to statutory exception

and to the provisions of relevant collective licensing agreements,

no reproduction of any part may take place without the written

permission of Cambridge University Press.

First published 2011

Printed in the United States of America

A catalog record for this publication is available from the British Library.

Library of Congress Cataloging in Publication data

Law and development perspective on international trade law / [edited by]

Yong-Shik Lee . . . [et al.].

p. cm.

Includes bibliographical references and index.

isbn 978-1-107-01161-8 (hardback)

1. Foreign trade regulation. 2. World Trade Organization. 3. Doha Development

Agenda (2001– ) 4. International trade. I. Lee, Yong-Shik, 1968–

k3943.l38 2011

343

.087 – dc22 2011002168

isbn 978-1-107-01161-8 Hardback

Cambridge University Press has no responsibility for the persistence or accuracy of urls for external or

third-party Internet Web sites referred to in this publication and does not guarantee that any content on

such Web sites is, or will remain, accurate or appropriate.

Contents

About the Editors and Authors page ix

Acknowledgments xiii

Introduction 1

part i: developing countries and international

trade

1 Law and Development for Least Developed Countries:

Theoretical Basis and Regulatory Framework for Microtrade 7

Yong-Shik Lee

2 Development Disputes in International Trade 29

Tomer Broude

3 Intellectual Property Rights, Trade, and Economic

Development 49

Bryan Mercurio

4 Trade, Border Security, and Development 81

Maureen Irish

part ii: law and development in the world trade

organization

5 World Trade Organization and Developing Countries:

Reform Proposal 105

Yong-Shik Lee

v

vi Contents

6 Rediscovering the Role of Developing Countries

in the GATT 130

Faizel Ismail

7 WTO Dispute Settlement from the Perspective of

Developing Countries 161

Gary N. Horlick and Katherine Fennell

8 Pacific Countries in the WTO: Accession and

Accommodation, the Reality of WTO Accession 179

Andrew D. Mitchell and Joanne Wallis

part iii: law and development in free trade

agreements

9 North–South Regional Trade Agreements: Prospects, Risks,

and Legal Regulation 225

Moshe Hirsch

10 Free Trade Agreements: WTO Disciplines and

Development Perspectives 246

Mitsuo Matsushita and Yong-Shik Lee

11 Developing Countries, Trade, and Human Rights: Free

Trade Agreements, Development Needs, and the European

Union’s Generalized System of Preferences 277

Anthony E. Cassimatis

12 Free Trade Agreements and Foreign Direct Investment:

A Viable Answer for Economic Development? 297

Yong-Shik Lee

part iv: law and development in regional initiatives

13 Islands of Prosperity and Poverty: A Rational Trade

Development Policy for Economically Heterogeneous States 317

Colin B. Picker

14 Trade Preferences and Economic Growth: An Assessment

of the U.S. GSP Schemes in the Context of Least

Developed Countries 334

Caf Dowlah

Contents vii

15 Economic Development of North Korea: Call for

International Trade-Based Development Policy and

Legal Reform 356

Yong-Shik Lee, Young-Ok Kim, and Hye Seong Mun

16 Applying the “Specificity” Test in Countervailing Duty

Cases in the Context of China’s Foreign Investment Policies 376

Xiaojie Lu

17 Nonconclusions 395

Gary N. Horlick

Epilogue 403

Index 405

About the Editors and Authors

Yong-Shik Lee, the lead editor, currently directs the Law and Development Institute

(LDI). He has taught at law schools and business schools throughout the United

States, Asia, and Australia and has practiced law internationally with government

and leading law firms. He graduated with an AB in economics, with academic

distinction, from the University of California at Berkeley and studied law at the

University of Cambridge, where he received his BA, MA, and PhD degrees. Author of

Reclaiming Development in the World Trading System (Cambridge University Press

2009), Safeguard Measures in World Trade: The Legal Analysis (2007), and Economic

Development through World Trade: A Developing World Perspective (2008), Lee has

published widely in the areas of international trade law and economic development

with leading publishers in the United States, Europe, and Asia. His recent work has

focused on the impact that domestic and international legal systems, particularly

the legal framework for international trade, has on economic development. He is

currently Associate Editor of the Journal of World Trade and founding Editor-in￾Chief of the Law and Development Review.

Gary N. Horlick is ranked at the very top among the world’s international trade

lawyers by Chambers, Euromoney Institutional Investor, and Who’s Who Legal. He

has represented leading U.S. and global companies and more than twenty countries

in international trade negotiations and disputes, and he has chaired WTO and

MERCOSUR dispute panels. He served as International Trade Counsel of the U.S.

Senate Finance Committee and as head of the Import Administration of the U.S.

Department of Commerce (where he was responsible for all U.S. antidumping and

countervailing duty cases, Foreign Trade Zones, and Statutory Import Programs).

He teaches at Yale Law School, Georgetown Law Center, and the University of

Bern’s World Trade Institute. He graduated from Dartmouth College, Cambridge

University, and Yale Law School.

ix

x About the Editors and Authors

Won-Mog Choi is Professor of International Trade Law and Director of the WTO

Law Center, Ewha Womans University School of Law in Seoul. He is also an

editorial board member of leading academic journals, including the Journal of

International Economic Law (Oxford), Law and Development Review, and Indian

Journal of International Economic Law, and is a member of the New York bar.

Professor Choi received his legal education in the United States (Georgetown Law,

SJD and LLM) and Korea (Seoul National University, MPA and LLB). Before

joining the faculty of Ewha, he worked for the Ministry of Foreign Affairs and

Trade of Korea for eleven years as a diplomat and legal officer in charge of numerous

trade issues, including WTO dispute settlements, trade remedy issues, and free trade

agreements. Currently advising the Korean government on trade law and policy

issues and working as columnist of major newspapers in Seoul, Professor Choi has

actively published books and articles.

Tomer Broude is Senior Lecturer at the Hebrew University of Jerusalem in the Fac￾ulty of Law and Department of International Relations and the Academic Director

of the Minerva Center for Human Rights in Jerusalem. He has taught interna￾tional law at various law schools in Israel and abroad, including the University of

Toronto, Georgetown University Law Center, and Johns Hopkins University School

of Advanced International Studies. His fields of research are international public law,

with focus on international economic law and the WTO, and its interaction with

other fields of law. His publications include International Governance in the WTO:

Judicial Boundaries and Political Capitulation (2004), The Shifting Allocation of

Authority in International Law: Considering Sovereignty, Supremacy and Subsidiarity

(editor, with Yuval Shany, 2008), and The Politics of International Economic Law

(editor, with Marc L. Busch and Amy Porges, Cambridge University Press 2011).

In 2007–2009, he served as Co-Chair of the International Economic Law Interest

Group of the American Society of International Law. He is a founder of the Society

of International Economic Law and a member of its Executive Council, and is a

member of the International Law Association Committee on the International Law

of Sustainable Development.

Anthony E. Cassimatis is Senior Lecturer at the TC Beirne School of Law and a

Fellow of the Centre for Public, International and Comparative Law of the University

of Queensland. He holds BA, LLB (Hons) (Qld), LLM (Cantab), and PhD (Qld)

degrees.

Caf Dowlah is Professor of Economics at the City University of New York.

Katherine Fennell is JD Candidate at the Georgetown University Law Center and

MA Candidate at the Johns Hopkins School of Advanced International Studies.

Moshe Hirsch isMaria Von Hofmannsthal Chair in International Law in the Faculty

of Law and Department of International Relations of the Hebrew University of

About the Editors and Authors xi

Jerusalem. He is Director of the International Law Forum of the Hebrew University

of Jerusalem and Principal Research Fellow of the Centre for Energy, Petroleum,

Mineral Law and Policy in the Faculty of Law of the University of Dundee.

Maureen Irish is Professor of Law in the Faculty of Law of the University of Windsor,

Canada.

Faizel Ismail is Ambassador Permanent Representative of South Africa to the WTO.

He has published two books on the WTO and is Associate Editor of the Journal of

World Trade.

Young-Ok Kim is Visiting Scholar at the Washington University School of Law.

Xiaojie Lu is Associate Professor at the Tsinghua University Law School, Beijing,

China.

Mitsuo Matsushita is Emeritus Professor of Law at the University of Tokyo and a

former member of the WTO Appellate Body.

Bryan Mercurio is Professor of Law at the Chinese University of Hong Kong Law

School.

Andrew D. Mitchell is Associate Professor at the Melbourne Law School of the

University of Melbourne; a barrister and solicitor of the Supreme Court of Victoria

and High Court of Australia; and Fellow of the Tim Fischer Centre for Global

Trade and Finance, Bond University. He is a former consultant to the International

Monetary Fund, Geneva. He holds PhD (Cantab), LLM (Harv), Grad Dip (Int Law)

(Melb), LLB (Hons) (Melb), and BCom (Hons) (Melb) degrees.

Hye Seong Mun is a Fellow of the Law and Development Institute and former

faculty member in the School of Medicine of Chiba University, Japan.

Colin B. Picker is Associate Professor of Law in the Faculty of Law of the University

of New South Wales. He holds an AB degree from Bowdoin College and a JD from

Yale Law School.

Joanne Wallis is barrister and solicitor of the Supreme Court of Victoria and High

Court of Australia. She is a PhD Candidate at the Department of Politics and

International Studies of the University of Cambridge and Honorary Fellow of the

School of Social and Political Sciences of the University of Melbourne. She holds

MA (Melb), MPIL (Melb), LLB (Hons) (Melb), and BA (Hons) (Melb) degrees.

about the law and development institute

The Law and Development Institute (LDI, www.lawanddevelopment.net) was

founded in 2009 as a nonprofit, academic network with an objective of promot￾ing law and development studies and projects. With the participation of over

xii About the Editors and Authors

twenty leading scholars from several countries, including the United States, Canada,

Australia, Singapore, Japan, Korea, and Israel, the LDI has initiated and supported

major academic publications, such as this book and the Law and Development

Review (www.bepress.com/ldr), organized international conferences, and has under￾taken law and development projects to assist developing countries.

Law and development studies concern the impact of international and domes￾tic legal orders on economic and social development. Development issues have

become a subject of considerable attention in the recent Doha Round negotiations

of the World Trade Organization (WTO) in relation to international trade law. The

Doha Round was suspended because of the large gaps between the developed and

developing countries in their positions on some of the key international trade law

and development issues. The LDI has supported and promoted this book in an effort

to bridge these gaps and promote regulatory reform to facilitate development in the

world trading system.

Acknowledgments

This book would not have been possible without the valuable assistance of many

individuals. The editors are grateful to all the authors, who contributed excellent

chapters to this book, patiently waited during the lengthy review and editorial process,

and cooperated with us on our various requests. We also appreciate comments made

by several anonymous reviewers that have helped to improve this book significantly.

We are also thankful to our editorial assistants, including Flora Ho, Sarah Choe,

Hyunwoo Kim, Semi Kim, Hyuntae Choi, and Jesse Fishman, for their assistance.

Last but not least, we are grateful to Cambridge University Press for its decision to

publish this book and to its staff members for all their hard work. Our heart also

goes out to many other individuals who have provided valuable assistance but could

not all be listed in this limited space. We remember them with much gratitude and

appreciation.

The Editors

xiii