International Economic Law and Monetary Measures

International Economic Law and Monetary Measures

Limitations to States’ Sovereignty and Dispute Settlement

Elgar International Economic Law series

Annamaria Viterbo

The 2007–2010 global financial crisis re-opened the debate on the reform of the international monetary and financial system. This well-argued book demonstrates the strategic role of international economic law in ensuring international monetary stability and global financial stability.

Chapter 5: Exchange Restrictions and Capital Controls under the WTO Legal Framework

Annamaria Viterbo

Subjects: law - academic, international economic law, trade law


INTRODUCTION This chapter examines the rules of international trade law on exchange restrictions and capital controls. We will devote particular attention to the interactions between the IMF and the WTO legal frameworks, and to ex ante coordination clauses aimed at avoiding norm conflicts between the GATT/GATS and the IMF agreements. 1. 1.1 EXCHANGE RESTRICTIONS UNDER THE GATT LEGAL FRAMEWORK GATT Art. XV In the aftermath of World War II, the IMF and the planned International Trade Organization (ITO) were designed to complement each other and to shape a world economic order that would lead to a period of monetary stability and trade growth. The Bretton Woods founding fathers established that the IMF would have jurisdiction over exchange restrictions, while the ITO – and afterwards the General Agreement on Tariffs and Trade (GATT) – would cover measures limiting trade, both types of measures being in principle prohibited.1 1 Jackson, John H. (2010), ‘History of the GATT: Overview and Birth Defects’, in Rüdiger Wolfrum, Peter-Tobias Stoll and Holger P. Hestermeyer (eds.), WTO – Trade in Goods, Max Planck Commentaries on World Trade Law, Vol. 5, Leiden: Martinus Nijhoff, pp. 1–24. See also Kennedy, David (2005), ‘GATT 1994’, in Patrick F.J. Macrory, Arthur E. Appleton and Michael G. Plummer (eds.), The World Trade Organization: Legal, Economic and Political Analysis, New York: Springer, pp. 89–186, at 147; Mavroidis, Petros C. (2007), Trade in Goods: The GATT and the Other Agreements Regulating Trade in Goods, Oxford: Oxford 205 M2857 - VITERBO TEXT.indd 205 25/01/2012 16:...

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