THE NEXT BEST ALTERNATIVE: EXAMINING THE VIABILITY OF COMMERCIAL REGIONALISM AS A SOLUTION TO THE WTO CRISIS
By Amulya Upadhyay
Towards the end of 2019, the global trading network suffered a major setback when it saw the Appellate Body come to an end. The persistent blocking of appointments to the Body, along with a widespread discontent for its decision-making procedure, was reason enough for it to be rendered defunct. Though temporary solutions have been suggested, they lack the capability of being resolute answers and divert the attention of members from restoring the two-tier dispute settlement system.
In a climate like this, countries will seek existing solutions capable of holding a reputation like that of the Appellate Body. Regional Trade Agreements fulfill such requirements with their administrative framework and standalone Dispute Settlement Mechanisms (DSMs) of redressal. Enshrined in Article XXIV of the GATT, RTAs are instruments of economic integration that provide an extensive level of liberalization between contracting parties. The incremental adjudication of their ad-hoc DSMs shows that these mechanisms are continuously evolving to find better avenues for dispute settlement between the parties, ones that are capable of balancing a state’s interest and ensuring that the responding member does not evade adjudication.
The increasing willingness of countries like the United States to renegotiate the terms of its constituent RTAs is enough to support the fact that countries are now gearing up to conceptualize a rule-based international trading system through the support of regional institutions. Can RTAs then be considered as blueprints for negotiating new multilateral trade rules? The paper attempts to answer this by determining the perception of RTAs within the multilateral trade network. The author proposes that administrative and judicial mechanisms within the RTAs effectively resolve disputes between parties without projecting a conflict to the multilateral trading system. However, such mechanisms are not devoid of obstacles, and the author discusses suggestions to resolve the same before concluding the analysis.
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