Trade Policy and International Legal Development
Chapter 5: WTO Obligations Affected by Members’ Use of Social Trade Regulations
5. WTO obligations affected by Members’ use of social trade regulations Despite their potentially infinite variety, social trade regulations are generally designed to do one of two things: either to limit market access of products, services, or service suppliers by or to the target country (e.g., import or export restrictions); or to permit discrimination among similar products, services, or service suppliers to the detriment of the target country (e.g., administrative/regulatory restrictions). In doing so, the trade measures purposely violate one or the other of the two most fundamental principles of WTO law: liberal market access and non-discrimination in the treatment of like goods and services. This is no coincidence, of course – the principles upon which the WTO legal system is founded are precisely those which foster greater trading relationships among Members in the expectation that mutual benefits will flow from such contacts. Social trade regulations are intended to hurt a trade partner (as punishment or as coercion) by withholding from it the expected gains from trade unless the partner accepts the promotion of the social norms supported by the sender. It is not surprising, therefore, that the use of such trade measures is at odds with the WTO system’s most basic obligations. That said, there are exceptions to the WTO principles of market access and non-discrimination built into the texts of the various multilateral agreements. Restrictions on access or discrimination are permitted, for instance, on the basis of public policy,1 national security concerns,2 or economic development needs.3 1...
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