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The study of ideas in EU-China disputes in the WTO

by Salvatore FP Barillà
This article is based on research presented at the UACES Graduate Forum Research Conference 2021 (17-18 June, online)

 

In the context of trade policy, economic capacity and market size are often considered central analytical factors. It is assumed that the larger the market size of a state, the more likely it will be to engage in a dispute with the World Trade Organisation (WTO). This assumption is especially prominent for disputes between global powers and developing countries.

 

Nonetheless, materialistic theories do not seem to fully address the situation of EU-China trade disputes in the WTO. When considering the EU and China, two of the largest market economies and two global powers, the expectation is that they should both have requested the establishment of a panel in the WTO dispute settlement mechanism (DSM) on a number of occasions. Nonetheless, when looking at the cases initiated by the two actors, this expectation is not empirically accurate.

 

The EU is the second most prolific user of the DSM after the United States (US) in terms of initiation of disputes with 104 cases as complainant, while China has only 21. Why?

Traditional drivers used to analyse the reasons why states engage in trade disputes in the WTO suggest a more intensive use of the DSM by China. Like the EU, China is one of the world’s largest economies. China has the legal capacity to engage in a dispute, like the EU, so what explains this discrepancy in the available data if traditional materialistic explanations fail to do so?

 

My research aims to prove the causal relationship between domestic ideas and governments’ decisions to request the establishment of a WTO panel. I argue that the EU and China are representative of different ideas, namely programmatic beliefs. My research proposes that if a government whose programmatic beliefs are centred on mediation and arbitration , then the government will follow its programmatic beliefs. On the contrary, if a government whose programmatic beliefs are based on the preference of judicial remedies requests the establishment of a panel, then the government will be following its programmatic beliefs.

The EU is expected to favour the establishment of a panel to mediation. In this sense, the EU will interpret material factors (like economic capacity, or market size) as conducting the decision towards the establishment of a panel. China is expected to prefer mediation over the establishment of a panel. Attempts of mediation in official documents, as well as in media records, will be analysed as evidence.

 

Chinese ideas of dispute settlement are based on the Confucian tradition of win-win relationships, 關係 (guan xi), in which the preservation of the relationship with the other party is essential to the positive outcome of the dispute. The concept of legal tradition is broader than the mere corpus of laws and political acts that are part of a state’s legislation. It embraces principles, traditions and practices of the state. In this sense, it seems fair to claim that legal traditions are part of a state’s culture and might play a role in a government’s behaviour. Furthermore, the administration of conflict resolution was originally given to family elders (heads of families or clans). This type of local conflict resolution served as a way of preventing other conflicts among citizens. There was no procedural law because the public official would decide the outcome of disputes. Public administration was not separated from the judiciary body. This lack of separation of powers in China.

 

European and Western ideas, which have been absorbed by the WTO, are based on a dialectical vision of disputes, in which one party wins and the other loses. This dialectical vision of the dispute is also due to the fact that traditionally in the West, legal institutions have been seen more keenly as the main institutions to turn to in order to solve a conflict. In this sense, it can be argued that the WTO itself was built on the Western idea of judicial remedy.

 

Norms, or, better, programmatic beliefs can guide, inspire, or justify governments’ decisions to act in a specific way.

 

This brief overview shows how the investigation of ideas, or, more specifically, programmatic beliefs can provide explanations for governments’ decisions to request the establishment of a panel in the WTO. In particular, this overview shows how the EU’s programmatic beliefs would suggest a more intensive use of the DSM. On the contrary, Chinese programmatic beliefs would imply a less frequent use of the WTO’s judicial body. My research aims to provide empirical evidence confirming these theoretical propositions by analysing EU-China disputes in the WTO DSM.

 

 


 

Salvatore FP Barillà is a PhD candidate in Politics at the School of Social and Political Science of the University of Edinburgh. He holds a combined bachelor and master’s degree in Law from LUISS university, and a double master’s degree in European Studies and International Relations from LUISS university and China Foreign Affairs University. He is interested in International Political Economy, International Trade and Investment Law, and EU-China studies.

 

Institutional  website: https://www.sps.ed.ac.uk/staff/salvatore-fp-barilla

Twitter: @sfpbarilla

 


 

The European Commission’s support for the production of this publication does not constitute an endorsement of the contents, which reflect the views only of the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

 

 



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