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Mu Yaping: A Legal Analysis of Regional Economic Integration under the WTO System
发布者:发布时间:2018-10-18 19:19阅读:75

"Economic globalization" has become a well-known phenomenon. The mutual penetration and interdependence of the international community in the fields of trade, investment and finance are deepening. Under the multilateral trading system represented by the World Trade Organization (WTO) Agreement, the obstacles to international economic circulation are steadily weakening, and he demand for international economic integration is constantly increasing. It can be asserted that the the world economy is growing to be and will inevitably be an indivisible organic whole. At the same time, the organic integration of the regional economy has become the reality, and regional economic integration is also developing rapidly.Regional economic organizations represented by the European Union (EU), the North American Free Trade Area (NAFTA) and the Asia-Pacific Economic Cooperation (APEC) is showing great vitality. Therefore, the WTO system, which is the mainstay of the world's multilateral trading system, is facing the shock of various kinds of trade protectionism from regional economic groups. It should be noted that regional economic integration is a "double-edged sword". It may be a necessary first step in the economic globalization and help to promote the gradual integration of the world economy.But it may also become a huge obstacle to the economic globalization. Which makes people "live in a divided world in 25 years."

 

Therefore, how to coordinate the relationship between the WTO and regional economic groups?How to share the fruits of economic globalization in different countries and regions with unbalanced economic development? And how to include the regional economic integration into the multilateral trading system which is represented by WTO agreements?And how to include the regional economic integration into the process of world economic integration has become an urgent theoretical and practical issue.

 

Ⅰ.Deviation or the same destination:the contradiction and unification of economic globalization and regional economic integration.

 

  1. ideal home?Correct understanding of economic globalization:Analyzing the rich content of economic globalization at present, there is no unified and clear definition of "economic globalization" in the economic community in which there are disputes about "globalization" and "economic globalization". Some scholars even hold that globalization is only a myth. Economic globalization will not be successful and come to and end. There are no precise concepts about globalization and economic globalization in the field of law. There is no clear definition of these two concepts in international laws and domestic laws. Even the WTO agreements have no relevant interpretation. Economic globalization is only an idea that reflects the reality, but this does not mean that legal analysis is impossible,because what we want to analyze is not the idea itself, but the social relations it implies and the international economic and trade order system it contains, and the deeper coordination of the will of the state and the balance of national interests behind it.Although there has not formed a unified and complete theory about"economic globalization" and even a unified definition,people have already obtained some consensus in terms of the economic globalization’s characteristics, characteristics, impact, etc., . The author asserts that economic globalization refers not only to the effective allocation and rational flow of goods, currencies, capital and resources in the international market, but also to the international institutional arrangements which can fully reflect the coordinated wills of all countries in the world and make up for the principles、rules、institutions and process that the market defects.It should be noted that economic globalization is not only a fact, but also a gradual process and a process of building the international economic and trading system. we should regard economic globalization as a long process and look at it from the perspective of building an international economic and trading system.Only in this way,can we get to know the competition of strengths, the coordination of national will and the balance of national interests through dazzling reality without being trapped in others’ thoughts. After the cold war, the economic factors has been more important in international relations and have become the objective of international economic cooperation.The effective allocation of resources in a wider range has come true.most countries have begun to implement market-oriented economic reforms. International economic organizations,such as International Monetary Fund, the World Bank and the World Trade Organization and its predecessor General Agreement on Trade and Trade have also begun to vigorously promote the liberalization of trade and investment, and have promoted the free and large-scale flow of funds, technology and personnel around the world. All these have become the reasons for the accelerated development of economic globalization, while fast-upgrading science and technology, represented by information technology, is the indispensable material foundation of economic globalization. Of course, we also note that today's economic globalization is still dominated by developed countries, with transnational corporations as the main driving force of the worldwide industrial restructuring. From this perspective, in a certain period,economic globalization will more reflect the will and interests of developed countries. 2. More and more scholars hold that economic globalization is an objective state and the law of the development of human society. It is irreversible. What we should study is not that we should not participate in the process of economic globalization, but how we can participate in the economic globalization according to the specific national conditions, conform to the historical trend, seek advantages and avoid disadvantages and strive to minimize the negative effects of economic globalization.

 

The author holds that economic globalization should not be accepted or opposed in an abstract way. Only by analyzing the distribution of national interests hidden behind economic globalization and the construction of international economic and trading system can we make a value judgment on economic globalization and understand the internal relationship between economic globalization and regional economic integration. It should be noted that today's economic globalization has not completely escaped the impact of the old international economic order. In the process of economic globalization, a few developed countries still benefit the most, which makes the gap between developing countries and their economic strength wider and wider. Therefore, it is our objective of economic globalization to get away from the old international economic order as soon as possible and to establish a fair, equitable rand reasonable new order. What we need and pursue is not the economic globalization that established by some economic superpower states and groups to compete with each other, but the economic globalization that really promotes the common development of all countries. The Agreement on the Establishment of the World Trade Organization in Marrakech  made it clear at the outset,that the WTO takes the establishment of a "complete, more practical and lasting multilateral trading system" as its own responsibility, with the aim of "improving living standards, ensuring full employment, guaranteeing substantial income and largely stable growth in effective demand and expanding the production and trade of goods and services" it should make active efforts to ensure that developing countries, especially the least developed among them, can obtain a considerable share of the growth of international trade according to their economic development needs. If all countries in the world reconstruct the international economic order in accordance with such a purpose and distribute the benefits of economic globalization rationally, economic globalization will truly become the common ideal of all countries in the world.

 

B.  "double-edged sword"!

 While the economic globalization is booming, the regional economic integration is also developing quietly. Regional economic integration refers to the process of economic and trade union established by two or more countries which are close to each other Geographically in order to seek common economic and trade development by concluding treaties. It is usually achieved through the form of regional economic and trade organizations. Regional economic integration has shown signs since World War II, accelerated the pace in the 1980s, and has been a force in the 1990s. According to statistics, there were 163 regional economic integration agreements that GATT and the World Trade Organization notified from 1947 to 1997, of which 60% were in force. Nowadays, the most influential, successful and dynamic regional economic integration organizations are the European Union, the North American Free Trade Area and the Asia-Pacific Economic Cooperation. It should be noted that regional economic integration has negative impacts on economic globalization in some aspects, and in some cases even restricts the development of economic globalization. However, they are not contrary to each other, but should be regarded as two parallel paths. The author holds that even though the theory of global free trade is economically perfect, it can only be regarded as a long-term goal for all countries. To achieve this goal, we need to properly handle and take into account the immediate interests of all countries, especially the major interests of a country's economy and people's livelihood and the ability to deal with emergencies and special situations. Only in this way will it be possible to establish a realistic and stable international economic and trade order. This requires the international community to seek the compromise and balance that are acceptable to all countries between long-term goals and immediate interests. No country will abandon its immediate fruits for some vague interests.If people do not take into account the differences in economic conditions between different regions and countries and pursue global unified rules blindly, it is bound to fail in practice, because most countries will resist such economic integration arrangements, or simply passively participate in the process of globalization. Just as we do not approve or oppose economic globalization in an abstract way, the author does not approve or oppose regional economic integration in an abstract way, but assert the proper and skillful operation of regional economic integration. Regional economic integration should really take into account the economic situations of all countries, properly coordinate the interests in the process of regional integration, and effectively improve the living standards.Regional economic integration should take economic globalization as the ultimate goal. The international economic and trade legal system should be developed in the process of coordinating and unifying economic globalization and regional economic integration.

 

Ⅱ. dream or reality: the basis and influence of regional economic integration under the GATT and WTO system                        

  1. The GATT and WTO agreements provide the legal basis and driving force for regional economic integration. Article 24 of GATT 1947 concentrates the provisions on regional economic integration in GATT 1947. This is the first time that the international community, in the form of a multilateral treaty, has defined the concepts of the two representative forms of regional economic integration, the customs union and the free trade zone, from a legal point of view, and lay down its conditions.Generally, people classify regional economic integration into five levels: preferential trade arrangement, free trade area, customs union, common market and economic union according to the extent of trade barrier elimination. The GATT 1947 only stipulated three levels: customs union, free trade area and the interim agreement to establish customs union or free trade area.  It has not been able to provide for a more open common market and economic alliance. With the progress of the times and the rapid development of regional economic integration, Article 24 of GATT has been criticized more and more for its lack of rigor, but its contribution to international economic law can not be denied. The clause pioneered the practice of regional economic integration under the multilateral trading system, and legally clarified the forms of regional economic integrated forms such as customs union and free trade, and vigorously promoted the development of regional economic integration. According to Article 24 of GATT, a customs union means "to replace two or more tariff zones with a single tariff zone" and must satisfy the following conditions: (1) All trades in substance between the constituent regions of the union, or all trades in substance with products originating in the respective regions, has been eliminated from tariffs and other restrictive trade regulations; (2) The trades of each member of the League with non-member area shall be governed by essentially the same tariffs and other trade regulations; (3) Tariffs levied on non-member contracting parties and other trade regulations applied shall not, as a whole, be higher or stricter than those general limitation level of the regulations that imposed on the territories when there was not an alliance or an interim agreement was established.

 

Free trade zones refer to groups of more than two tariff zones and must satisfy: (1) members of their constituent zones have essentially abolished tariffs and other restrictive trade regulations for products originating in the zones; (2) members of their constituent zones have levied concerns on non-member contracting parties (GATT contracting parties) Taxes and other trade regulations in force shall not be higher or stricter than the levels of tariffs and trade regulations imposed by the constituent zones in the absence of such free trade zones or provisional agreements. In addition, Article 24 also stipulate the interim agreement for joining or establishing the two regional economic blocs. Article 24, as a major exception to the most-favored-nation treatment principle of GATT, aims to ensure that countries that have concluded regional trade agreements form genuine free trade among themselves and provide adequate compensation for the damage caused to the trade interests of other GATT members. It is based partly on the historical precedent of the special regime of border tariffs between neighbouring countries, and partly on the policy that the general welfare of the world can be enhanced by a trading system that removes all trade restrictions between countries. This is a concept of "either have, or do not have", tolerating some of the disadvantages of trade preferences in exchange for substantial freedom of trade between several countries.

 

Of course, due to historical constraints, GATT Article 24 also has shortcomings and ambiguities and brings difficulties to specific implementation.  For example: (1) with regard to the removal of tariffs and all other trade restrictions on "all trade in substance", the lack of a clear interpretation of what is "all trade in substance" in Article 24 often leads to disputes; (2) with regard to the external tariffs and other trade regulations of the Customs Union "as a whole, shall not be higher than or higher than those general limitation level of the regulations that imposed on the territories when there was not an alliance or an interim agreement was established. " ,there has been no universal acceptance ; (3) It is difficult to determine the criteria for the "reasonable period" for the transformation of an interim agreement into a customs union or a free trade area. For example, some interim provisional agreements provide for reaching the goal in 20 years, but it is difficult for countries to measure whether such provisions are in conformity with Article 24; (4) there is problem about procedural provisions for new customs unions, free trade zones or interim agreements. These issues were considered and discussed in the Uruguay Round negotiations, which led to the birth of the Understanding on the Interpretation of Article 24 of the 1994 GATT.

 

2.Understanding on Interpreting Article 24 of GATT 1994" promotes the development of regional economic integration.

Due to the defects of Article 24 of GATT, it has encountered difficulties in the specific implementation process, and related disputes have arisen one after another. In particular, there was a great deal of controversy in the GATT’s deliberations on whether the "Common Market"established by six Western European countries in 1957 and the subsequent seven-country free trade area established in 1960,according to Stockholm Convention were in conformity with the standards of. Finally, it came to nothing , which to a great extent broke GATT's legal system. In the Uruguay Round negotiations, these issues have been taken seriously by the participants. They supplemented and perfected Article 24 of GATT 1994, and reached the Understanding on the Interpretation of Article 24 of GATT 1994.In its preamble, it reiterates that the purpose of such agreements should be to facilitate trades between the parties’ territories, not to raise trade barriers between other members and those territories.And when such agreements are formed or expanded, the participants should avoid to the greatest extent possible adverse effects on the trade of other members. Then, 15 paragraphs were used to clarify or compensate the problems exposed in the implementation of Article 24 of GATT. The main conclusions can be summarized as follows: Firstly, the evaluation of tariffs and other trade laws before and after the formation of the customs union. The Understanding clearly states that tariffs and fees should be comprehensively assessed on the basis of weighted average tariff rates and tariffs imposed on. For those non-tariff rates, i.e. for those that are difficult to quantify and summarize, the scope of the impact of other trade regulations may require a review of individual measures, regulations, the products involved and the trade flows affected. Second, there is the question of the time limit for interim agreements to be transferred to the customs union and free trade area. The Understanding provides that a "reasonable period" may exceed 10 years only in exceptional circumstances. And if members of a party to an interim agreement consider that 10 years is not enough, they must provide the Council for Trade in Goods with a comprehensive statement requiring a longer period of time. Third, it specifies the handling of tariff changes caused by the formation of customs unions. First, if the members of a customs union need to raise bound tariffs, they must follow the procedures specified in the guidelines adopted on 10 November 1980 (BISD 27, PP. 26-28) and Article 28 of the Understanding for the Interpretation of Article 28 of GATT 1994. Secondly, with regard to the compensatory adjustments that should be provided by the members of the Customs Union to raise the tariff rate for the formation of a common external tariff rate, the Understanding requires that due consideration be given to the reduction of the same tariff number made by the territory of other members at the time of the formation of the customs union; if such reductions are insufficient to provide the necessary compensatory adjustments, the tariff is the same. The Union will provide compensation in the form of reductions in other tax codes, and the Customs Union may modify or withdraw concessions on its own if no compensation agreement has been reached within a legal reasonable period of time, and the affected member has the right to revoke substantially equivalent concessions. Finally, the Understanding stipulates that GATT does not impose any obligation to require compensatory adjustments to the territory of other members of the Customs Union for those members who benefit from tariff reductions in response to the formation of the Customs Union or the conclusion of an interim agreement leading to the formation of the Customs Union. The reason for the lengthy length of the Understanding to regulate this issue lies in its efforts to make the issues involved physically reasonable and procedurally feasible. Fourthly, the Understanding specifies the powers of the Council for Trade in Goods to consider customs unions and free trade zones. This is clearly to compensate for the lack of compliance with previous deliberations and to increase the Council's managerial authority. It should be noted that the Understanding, in providing for the relevant powers of the Council for Trade in Goods, uses such terms as "examine" "review" "further review" which contain the nature of law enforcement supervision. Fifthly, the Understanding explicitly applies the WTO dispute settlement mechanism to any matter arising from an interim agreement on a customs union, a free trade area or an agreement leading to the formation of a customs union or a free trade area. Sixth, the Understanding concludes by stressing that members are fully responsible for complying with all the provisions of GATT 1994 and should take reasonable measures to ensure compliance by the regional and local governments and competent authorities within their territory. Objectively speaking, the provisions of the "Understanding" are more detailed, but the effect of its implementation remains to be verified. However, as some scholars have commented, its role in strengthening the WTO's management of customs unions and free trade zones should be fully affirmed. At least, the past attitude towards the regional collectivization and the anarchy have come to an end.

 

3.Positive and negative effects of regional economic integration on the multilateral trading system of WTO

on one hand, regional economic integration "deviates" from the principle of multilateral most-favored-nation treatment of WTO and constitutes a preferential arrangement within regional organizations; on the other hand, it further reduces or even eliminates trade barriers within regional organizations and realizes small size. The real free trade in the area is one step ahead of WTO. The dual effects of regional economic integration on the economy determine its positive and negative impacts on the multilateral trading system. The positive impact of regional economic integration on the multilateral trading system is mainly manifested in the following aspects: First, balancing the strength of various groups in multilateral trade negotiations is conducive to the formation of a multilateral trading system that takes into account the interests of all parties. By forming regional economic blocs, developed countries have greatly increased their strength and can compete with individual super-economic powers, thus breaking the situation in which a small number of super-economic powers control the formulation of multilateral trade rules; and developing countries, by forming regional economic blocs, are also conducive to striving for more interests. Second, regional economic integration can become a "proving ground" for the multilateral trading system. Although many people believe that the world has entered the era of globalization, what kind of multilateral trading system should be built and how to rebuild the new international economic order should be studied in theory and tested in practice. However, regional economic integration involves fewer subjects and has relatively simple interests. The multilateral system can play an important role in testing the whole body. Third, regional negotiations and multilateral negotiations can promote each other. Since members of a regional organization speak with the same voice, if an issue has been agreed within it, many further compromise steps will be eliminated in multilateral negotiations; and because of the relevant rules of the WTO agreement, the degree of liberalization within a regional economic organization should be greater than that of the whole. The border system is high, so the starting point for negotiation between regional organizations is relatively high. It is worth noting that regional economic integration also has a negative impact on the multilateral trading system:First, due to the interests of small groups of regional economic organizations, in practice, the internal rules of regional economic organizations are often inconsistent with the principles and systems of the multilateral trading system, which often affects the effective implementation of the multilateral trade legal system. On the one hand, when the regional economic organizations are established, their legal frameworks often do not fully meet the requirements; on the other hand, in the course of the operation of regional economic organizations, there are often cases of “small actions” that violate the rules. The previous GATT could not do anything about it. After the "Understanding" was reached, the WTO should have the ability to change the state of this law. Second, regional economic integration organizations have different degrees of "trade transfer effect". It deviates from the principle of comparative advantage, causes frictions inside and outside the organization, hinders the steady and sound development of the multilateral trading system, and may also cause WTO members to fall into frequent trade dispute. Third, regional economic organizations have strengthened the monopoly power in the international market, which may make the stronger stronger and the weaker weaker, thus delaying the pace of rebuilding the international economic order.

 

First, regional economic organizations may monopolize the international market prices of individual commodities, making them significantly biased towards the organization; secondly, the unified actions of regional economic organizations can expand the scope of implementation of trade protectionist measures, affecting the entire organization; and finally, composed of developed countries, the regional economic organizations, such as the European Union, have their strengths and may price out of the market tempted by their economic strength. Fourth, because regional economic integration focuses on immediate interests, it may make countries focus on regional arrangements and ignore the process of world trade liberalization.

 

III. Trends or pursuits: Prospects and realization of regional economic integration under the WTO system

A.Win-win interaction: The global trade system and regional economic system that  regional economic integration led by economic globalization turns to are all systems for coordinating national interests. Each country seeks to maximize its benefits from its own interests by a combination of multilateral and regional arrangements. After World War II, regional economic integration experienced three development climaxes: the first occurred in the 1950s and 1960s, when many countries learned from the pre-war trade barriers that led to the world economic crisis, and established regional trade groups to achieve Trade liberalization in the region; the second occurred in the 1970s and early 1980s. After two oil crises, trade protectionism in the world rose, the effectiveness of the GATT-maintained multilateral trading system declined. The hope of the world’s trade freedom was once again pinned on the regional economic group, and it set off a second climax. The third time occurred in the 1980s to the beginning of the establishment of the WTO. The GATT Uruguay Round negotiations were delayed and the world was generally disappointed and payed more attention to regional trade liberalization. After the conclusion of the Uruguay Round negotiations, due to the implementation of the results of the negotiations, and the shortcomings of the agreement rules, many countries still lack confidence in the multilateral trading system, and the momentum of regional economic integration is still strong. It can be expected that after entering the 21st century, regional economic integration will usher in its fourth climax under the WTO's unified multilateral trading system: First, the imbalance of world economic and political development is the root cause of the development of regional economic integration. , (Note 15)

 

The economic strength of each country is large and small; the external relations are strong and weak; the competitiveness is high and low; and the international environment is superior or inferior. The development of each other will of course be unbalanced. In order to strive for initiative in the competition, all countries It needs to be united with countries that are geographically close to their own, and even the most powerful United States is no exception. This imbalance cannot be changed for a long period of time. Then, the development of regional economic integration is unstoppable. Second, the United States, Japan, and Europe are the three poles of the world economy. In order to enhance their strength and gain advantages in the three-pole competition, it is inevitable that they will be integrated. The United States leads the North American Free Trade Area; the European internal integration is getting closer; and Japan is also planning to unite with Asia. The checks and balance, the mutual competition and mutual cooperation between the groups have become an important trend in the development of the world economy and trade. It has been fully reflected in multilateral trade negotiations such as the Uruguay Round. Third, economic globalization has led to a further widening of the North-South gap. From 1960 to 1996, the average income gap between developed and developing countries increased by a factor of three. Due to this growth, the actual gap in income between developed and developing countries has reached 60 times. It can be seen that the distribution of interests in economic globalization is unequal. At the same time, developing countries face many challenges in the process of economic globalization, such as the risk of marginalization of low-income countries; the impact of increased trade and international competition on the relationship between environmental quality and labor standards; national sovereignty and society’s capabilities to determine the future and more. Faced with such problems, considering that economic globalization is not the evangelistic gospel, the vast number of developing countries hope to survive and develop in regional arrangements. Therefore, the idea of establishing a "second order" under the WTO will naturally be produced and put into practice. Fourth, in the process of promoting trade and investment liberalization, the rules of the Uruguay Round Agreement did not take into account the diversity of the economic development of all members and adopted a “one size fits all” approach. The implementation of these rules sometimes leads to obvious imbalances in the interests of the members. As a statutory exception to these unified rules, regional economic integration will inevitably become a tool for WTO members to circumvent the uniform rules.

 

B.Coordinating conflicts.it is inevitable to seek balance and power in the new international economic order. Then the urgent problem to be solved is how to coordinate the relationship between regional economic integration and economic globalization. The author believes that the ability to achieve coordination between the two conflicts depends on the following two aspects:

 

1.Strict implementation and improvement of relevant WTO rules. On the one hand, the WTO must strictly implement the trade liberalization rules reached in the Uruguay Round negotiations, ensure the smooth operation of the dispute settlement mechanism, eliminate the phenomenon of impunity, eliminate all kinds of barriers that hinder trade liberalization, and ease the inter-members. On the other hand, the WTO members cannot be satisfied with the existing status. They must start a new round of multilateral negotiations, resolve many unresolved issues, and constantly improve the WTO rules system in accordance with the new situation to seek breakthroughs in the international economic order. This order will better balance the economic interests of all countries in the world and build confidence in the multilateral trading system of developing countries.

 

  1. All regional economic organizations should clarify that their ultimate goal is to establish a new international economic order for global economic integration, and correct the attitude of regional organizations and WTO relations. Currently, regional economic organizations have shown some open attitudes. For example, APEC stressed in the ‘Bogor Declaration’ that members of the organization strongly oppose the establishment of an inward-looking trade group that deviates from the goal of global trade liberalization; the EU has repeatedly emphasized its denial of closure and exclusion, and do openness; the Summit of the Americas also emphasized that the establishment of a Pan-American Free Trade Area in the Americas is by no means a closed trade group. Yongtu Long, China's vice foreign economic and trade minister, showed China's attitude: regional cooperation between China and ASEAN will not create obstacles to the WTO. China and ASEAN will better share the benefits of economic globalization and regional economic integration.

 

Regional economic integration and economic globalization are like the "dual track" of the world economic trains that support high-speed advancement. They will play an objective role in a relatively long period of time and appear as an independent role. It will adversely affect or even hinder human progress and the development of the world economy to ignore or neglect any aspect. If we want to complete the "consolidation" in a hurry, it is objectively unrealistic, theoretically flawed, and practically impracticable. The right choice we should take is to take advantage of the situation, grasp the context, resolve conflicts, and coordinate interactions. Fortunately, the open China has adopted the right choices and has already launched an “expedition” to actively explore the space of regional economic cooperation while actively participating in the economic globalization process under the WTO system, and plans to establish within ten years. The concept of the China-ASEAN Free Trade Area is a prominent example.