Reassessing The Trade–Development Nexus In International Economic Law: The Paradigm Shift In Asia-Pacific Regionalism

Northwestern Journal of International Law & Business, Sep 2017

Abstract: This article reassesses the trade–development nexus in international economic law and provides the first examination of the approach to realize the United Nations Sustainable Development Goals through regional integration. It argues that the emerging New Regional Economic Order in the multipolar system will fortify the coalition of developing countries in structuring the legalization of pro-development trade policy. For decades, the misconceived concept of special and differential treatment has ignored the reality of the North–South Grand Bargain and disconnected the World Trade Organization from its development objectives. The development crisis of the Doha Round requires a feasible “Plan B” for the Global South. By making interrelated theoretical and substantive claims, this article opens an inquiry into the assertive role of developing countries that prompted the paradigm shift in Asia–Pacific regionalism. The realist and dependency theories are utilized to decipher the geopolitical complexity of the rapidly evolving South–South free trade agreements. As a timely case study, the analysis is based on the creation of the Association of Southeast Asian Nations Economic Community and its implications for economic powers such as the United States and China. It provides an account of the bloc’s services trade-oriented development policy under the balance of power strategy. Finally, this article offers regulatory reform proposals on how to integrate development assistance and remove trade barriers. Transnational legal harmonization and human rights protection in line with international labor principles are also indispensable. Such reforms will strengthen the best practices for global regionalism and reinvigorate the trade–development connection in the multilateral trading system.

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Reassessing The Trade–Development Nexus In International Economic Law: The Paradigm Shift In Asia-Pacific Regionalism

Reassessing the Trade-Development Nexus Reassessing The Trade-Development Nexus In International Economic Law: The Paradigm Shift I n Asia-Pacific R egionalism Pasha L. Hsieh 0 1 Recommended Citation 0 Thi s Article is brought to you for free and open access by Northwestern University School of Law Scholarly Commons. It has been accepted for inclusion in Northwestern Journal of International Law & Business by an authorized editor of Northwestern University School of Law Scholarly Commons 1 Pasha L. Hsieh, Reassessing The Trade-Development Nexus In International Economic Law: The Paradigm Shift I n Asia-Pacific R egionalism , 37 Nw. J. Int'l L. & Bus. 321, 2017 - Copyright 2017 by Pasha L. Hsieh Northwestern Journal of International Law & Business Printed in the U.S.A. Vol. 37, No. 3 Reassessing The Trade–Development Nexus In International Economic Law: The Paradigm Shift In Asia–Pacific Regionalism Pasha L. Hsieh* By making interrelated theoretical and substantive claims, this article opens an inquiry into the assertive role of developing countries that prompted the paradigm shift in Asia– Pacific regionalism. The realist and dependency theories are utilized to decipher the geopolitical complexity of the rapidly evolving South–South free trade agreements. As a timely case study, the analysis is based on the creation of the Association of Southeast Asian Nations Economic Community and its implications for economic powers such as the United States and China. It provides an account of the bloc’s services trade-oriented development policy under the balance of power strategy. Finally, this article offers regulatory reform proposals on how to integrate development assistance and remove trade barriers. Transnational legal harmonization and human rights protection in line with international labor principles are also indispensable. Such reforms will strengthen the best practices for global regionalism and reinvigorate the trade–development connection in the multilateral trading system. * Associate Professor of Law, Singapore Management University School of Law. J.D., LL.M., University of Pennsylvania; LL.B., National Chengchi University, Taiwan. E-mail: . This research was supported by the Singapore Ministry of Education Academic Research Fund Tier 1 grant (C234/MSS14L002). I wish to thank Professors Meredith Kolsky Lewis, Bryan Mercurio, Julien Chaisse, Locknie Hsu, Yip Man, Bernard Hoekman, Dukgeun Ahn, Melanie Milo, and participants at the International Law Association-American Society of International Law Asia-Pacific Research Forum, the Joint Asian International Economic Law Conference, and the Singapore-World Trade Organization (WTO) Policy Dialogue on the World Trading System for their insights and comments on earlier drafts of this article. I also acknowledge the valuable assistance of Jevan Li, Nurul Ayu Fajarani and Jolene Ng. All errors are my own. Northwestern Journal of International Law & Business I. INTRODUCTION The convergence of economic liberalization and development policy has formed the cornerstone of multilateral trade negotiations and international economic law for decades. Geopolitical challenges remain when it comes to reconciling the mercantilist concept of enhancing market access with the principle of redistributive justice that demands preferential treatment.1 More fundamentally, the legalization of the trade–development nexus reflects the global North–South conflicts that underpin divergent national interests between developed and developing countries.2 Unanimously adopted by the United Nations (UN) in 2015, the 2030 Agenda for Sustainable Development seeks to transform such long-standing conflicts to cooperation.3 With the aim to eradicate poverty and reinforce inclusive economic growth, the new Sustainable Development Goals (SDGs) conceive of international trade as the essential development apparatus.4 The SDGs mandated the revitalization of development by completing the negotiations of the Doha Round of the World Trade Organization (WTO).5 Yet, states’ irreconcilable stances on liberalizing restrictions on agriculture, non-agricultural market access (NAMA), and services trade led the Doha Round talks to an unresolved standstill.6 From Seattle to Nairobi, the WTO Ministerial Conferences have generated more frustrations than achievements.7 The fate of the Doha Round hinges on whether it can achieve Northwestern Journal of International Law & Business the aspirational commitment to development in tandem with liberalizing trade under the WTO and free trade agreements (FTAs).8 To understand the role of trade politics in shaping today’s global economic governance, it is pivotal to trace back to the origin of the North– South clash in the UN and the WTO. The WTO’s predecessor, the General Agreement on Tariffs and Trade (GATT), and the Bretton Woods Institutions were established in the 1940s and provided the framework that governed postwar economic order.9 The most-favored-nation (...truncated)


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Pasha L. Hsieh. Reassessing The Trade–Development Nexus In International Economic Law: The Paradigm Shift In Asia-Pacific Regionalism, Northwestern Journal of International Law & Business, 2017, Volume 37, Issue 3,