Pub Date : 2021-09-17DOI: 10.1177/00157325211037101
Tanveer Ahmad Khan
This article analyses the dynamics between current account (CA) and capital account in post-liberalisation India. Contemporaneous occurrence of CA deficit along with capital account surplus suggests the possible causal relationship between the two accounts. The theoretical debate around capital account liberalisation (KAL) is developed with the intention to lend support to empirical results for policy formulation. The analysis of arguments for and against KAL liberates us in interpreting the empirical results. Within the framework of KAL, this article proceeds to estimate the relationship between current and capital account. A set of econometric tests are performed on an Indian quarterly data over the period from 1996 to 2018. Econometric analysis reveals that capital account affects CA negatively. Short-run capital and debt flow also affect CA negatively, while foreign direct investment (FDI) affects it positively. We find debt flow to be an important factor, contributing to CA imbalance. Such dynamics is critical for any decision about KAL. From the analysis, it is observed that India needs to encourage FDI, while maintaining strict control over short-term capital, which is highly disruptive, and proceed cautiously towards full KAL. JEL Codes: C32, F21, F32
{"title":"Current and Capital Account Dynamics in India: An Empirical Analysis of the Post-Reform Period","authors":"Tanveer Ahmad Khan","doi":"10.1177/00157325211037101","DOIUrl":"https://doi.org/10.1177/00157325211037101","url":null,"abstract":"This article analyses the dynamics between current account (CA) and capital account in post-liberalisation India. Contemporaneous occurrence of CA deficit along with capital account surplus suggests the possible causal relationship between the two accounts. The theoretical debate around capital account liberalisation (KAL) is developed with the intention to lend support to empirical results for policy formulation. The analysis of arguments for and against KAL liberates us in interpreting the empirical results. Within the framework of KAL, this article proceeds to estimate the relationship between current and capital account. A set of econometric tests are performed on an Indian quarterly data over the period from 1996 to 2018. Econometric analysis reveals that capital account affects CA negatively. Short-run capital and debt flow also affect CA negatively, while foreign direct investment (FDI) affects it positively. We find debt flow to be an important factor, contributing to CA imbalance. Such dynamics is critical for any decision about KAL. From the analysis, it is observed that India needs to encourage FDI, while maintaining strict control over short-term capital, which is highly disruptive, and proceed cautiously towards full KAL. JEL Codes: C32, F21, F32","PeriodicalId":29933,"journal":{"name":"Foreign Trade Review","volume":"26 1","pages":"41 - 65"},"PeriodicalIF":1.3,"publicationDate":"2021-09-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89470524","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-09-13DOI: 10.1177/00157325211039909
Ankita Dash, R. Chanda
Global value chains (GVCs) are the modus operandi of contemporary international trade and production. However, the operational underpinnings of what facilitates or hinders participation of firms in their respective sectoral GVCs are surprisingly understudied. This article attempts to discover the potential factors—ranging from regulatory, institutional, technological, trade-related and financial to sectoral, and input-related elements—affecting GVC participation of automotive firms in India. A firm-level field survey was undertaken to better understand firms’ perceptions regarding these factors. The findings were analysed using principal component analysis (PCA) and partial least squares structural equation modelling (PLS-SEM), which revealed that certain policies such as state government initiatives and the Competition Act, as well as trade facilitation measures like standardisation of procedural requirements and trade agreements were the most significant factors aiding firms’ participation in automotive GVCs, while institutional, technological and input-related aspects were deterrents to such participation. Our findings have important implications for policymaking in the country for encouraging greater GVC participation of firms, especially small and medium enterprises. JEL Codes: F14, F6
{"title":"Anatomizing India’s Presence in Automotive Global Value Chains","authors":"Ankita Dash, R. Chanda","doi":"10.1177/00157325211039909","DOIUrl":"https://doi.org/10.1177/00157325211039909","url":null,"abstract":"Global value chains (GVCs) are the modus operandi of contemporary international trade and production. However, the operational underpinnings of what facilitates or hinders participation of firms in their respective sectoral GVCs are surprisingly understudied. This article attempts to discover the potential factors—ranging from regulatory, institutional, technological, trade-related and financial to sectoral, and input-related elements—affecting GVC participation of automotive firms in India. A firm-level field survey was undertaken to better understand firms’ perceptions regarding these factors. The findings were analysed using principal component analysis (PCA) and partial least squares structural equation modelling (PLS-SEM), which revealed that certain policies such as state government initiatives and the Competition Act, as well as trade facilitation measures like standardisation of procedural requirements and trade agreements were the most significant factors aiding firms’ participation in automotive GVCs, while institutional, technological and input-related aspects were deterrents to such participation. Our findings have important implications for policymaking in the country for encouraging greater GVC participation of firms, especially small and medium enterprises. JEL Codes: F14, F6","PeriodicalId":29933,"journal":{"name":"Foreign Trade Review","volume":"22 1","pages":"429 - 451"},"PeriodicalIF":1.3,"publicationDate":"2021-09-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87348132","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-08-14DOI: 10.1177/00157325211032021
Nnanna P. Azu, Philip A. Nwauko
Digital revolution is instrumental to the wave of globalisation and transformation of the global economy. But the pace of digital transformation and service trade is low in the West African region. This article investigates the effect of digital transformation on the development of service trade in the region. This research captured digitisation in two standpoints: internet penetration rate and mobile subscription rate. The Im-Pesaran-Shin unit-root test affirms that the model is appropriate for panel autoregressive distributed lag estimation method. Adopting pool mean group estimator, the results attest for the existence of cointegrations in the model. The estimations reveal that the effect of digitisation on service trade is a long-run phenomenon. While the result is robust with export, it is not consistent with import. The long-run positive impact of digitisation on service export ranges from 0.087% to 0.159%, depending on the proxy for digitisation. The overall short-run effect is not statistically significant in export and not robust in import. It is reportedly consistent in some countries but not robust with some others. The region needs to rally in adopting and adapting to the new face of technology to improve service trade. JEL Codes: C23, F14, O33
{"title":"Evaluating the Effect of Digital Transformation on Improvement of Service Trade in West Africa","authors":"Nnanna P. Azu, Philip A. Nwauko","doi":"10.1177/00157325211032021","DOIUrl":"https://doi.org/10.1177/00157325211032021","url":null,"abstract":"Digital revolution is instrumental to the wave of globalisation and transformation of the global economy. But the pace of digital transformation and service trade is low in the West African region. This article investigates the effect of digital transformation on the development of service trade in the region. This research captured digitisation in two standpoints: internet penetration rate and mobile subscription rate. The Im-Pesaran-Shin unit-root test affirms that the model is appropriate for panel autoregressive distributed lag estimation method. Adopting pool mean group estimator, the results attest for the existence of cointegrations in the model. The estimations reveal that the effect of digitisation on service trade is a long-run phenomenon. While the result is robust with export, it is not consistent with import. The long-run positive impact of digitisation on service export ranges from 0.087% to 0.159%, depending on the proxy for digitisation. The overall short-run effect is not statistically significant in export and not robust in import. It is reportedly consistent in some countries but not robust with some others. The region needs to rally in adopting and adapting to the new face of technology to improve service trade. JEL Codes: C23, F14, O33","PeriodicalId":29933,"journal":{"name":"Foreign Trade Review","volume":"11 1","pages":"430 - 453"},"PeriodicalIF":1.3,"publicationDate":"2021-08-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84160372","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-08-12DOI: 10.1177/00157325211031317
Nadia Doytch, N. Yonzan, K. Reddy, F. De Beule
We study the trends and fluctuations in greenfield foreign direct investment (GFDI) during the first wave of the COVID-19 pandemic crisis on a global scale. We analyse the data of a data set of GFDI provided by fDi Markets (Financial Times) to understand the contraction of GFDI during the first three quarters of the year 2020, taking into account the sector of the investment and the host and home country. We analyse both the long-run trends and the quarter-over-quarter changes in GFDI to capture its fluctuations before and during the first wave of the COVID-19 crisis and the 2008 global financial crisis. Our findings cast light on which countries’ and industries’ GFDIs were most affected by the pandemic crisis and draw a comparison to the global financial crisis. To our surprise, many services industries have shown unexpected resilience of GFDI due to the flexibility for remote work. On the contrary, GFDI in the manufacturing industries, as well as the extractives and the utility industries, has shown a dramatic decline during the pandemic. These contractions raise questions of stability and resilience of the global supply chains these industries are a part of. JEL Codes: F21
{"title":"Tracking Greenfield FDI During the COVID-19 Pandemic: Analysis by Sectors","authors":"Nadia Doytch, N. Yonzan, K. Reddy, F. De Beule","doi":"10.1177/00157325211031317","DOIUrl":"https://doi.org/10.1177/00157325211031317","url":null,"abstract":"We study the trends and fluctuations in greenfield foreign direct investment (GFDI) during the first wave of the COVID-19 pandemic crisis on a global scale. We analyse the data of a data set of GFDI provided by fDi Markets (Financial Times) to understand the contraction of GFDI during the first three quarters of the year 2020, taking into account the sector of the investment and the host and home country. We analyse both the long-run trends and the quarter-over-quarter changes in GFDI to capture its fluctuations before and during the first wave of the COVID-19 crisis and the 2008 global financial crisis. Our findings cast light on which countries’ and industries’ GFDIs were most affected by the pandemic crisis and draw a comparison to the global financial crisis. To our surprise, many services industries have shown unexpected resilience of GFDI due to the flexibility for remote work. On the contrary, GFDI in the manufacturing industries, as well as the extractives and the utility industries, has shown a dramatic decline during the pandemic. These contractions raise questions of stability and resilience of the global supply chains these industries are a part of. JEL Codes: F21","PeriodicalId":29933,"journal":{"name":"Foreign Trade Review","volume":"118 1","pages":"454 - 475"},"PeriodicalIF":1.3,"publicationDate":"2021-08-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87969152","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-08-01DOI: 10.1177/00157325211010568
Oliver Braunschweig
Matthew C. Klein and Michael Pettis, Trade Wars Are Class Wars: How Rising Inequality Distorts the Global Economy and Threatens International Peace. Yale University Press, 2020, US$28, 269 pp., ISBN 978-0-300-24417-5.
{"title":"Book review: Matthew C. Klein and Michael Pettis, Trade Wars Are Class Wars: How Rising Inequality Distorts the Global Economy and Threatens International Peace","authors":"Oliver Braunschweig","doi":"10.1177/00157325211010568","DOIUrl":"https://doi.org/10.1177/00157325211010568","url":null,"abstract":"Matthew C. Klein and Michael Pettis, Trade Wars Are Class Wars: How Rising Inequality Distorts the Global Economy and Threatens International Peace. Yale University Press, 2020, US$28, 269 pp., ISBN 978-0-300-24417-5.","PeriodicalId":29933,"journal":{"name":"Foreign Trade Review","volume":"25 1","pages":"364 - 367"},"PeriodicalIF":1.3,"publicationDate":"2021-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89361687","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-07-20DOI: 10.1177/00157325211018890
H. Roelfsema, C. Findlay, Xianjia Ye
To delve deeper into the rise of trade in commercial services as the most important determinant of the recent increase in digital trade, this article offers a decomposition of international service trade using the latest release of the Inter-Country Input–Output (ICIO) tables. The analysis decomposes international service trade into a split between (a) direct services exports and services embodied in goods, (b) advanced economies and the major emerging markets, and (c) the major commercial services industries. We show that overall direct service exports have become more important relative to services embodied in goods, especially in advanced economies (the ‘cross-border’ effect). Further, we show that for emerging markets, the rise of the exports of services comes from the increase in volume of export of goods, which embed services and not because of an increased share of services embodied in the domestic value of exported goods (the ‘embodied volume’ effect). Finally, we show that the increase in services trade can be attributed to the increase in traded information technology (IT) services and not so much to that in financial and business services that are increasingly traded digitally across borders (the ‘plain vanilla digitalisation’ effect). JEL Codes: F14, F15, G20
{"title":"Decomposing International Trade in Commercial Services","authors":"H. Roelfsema, C. Findlay, Xianjia Ye","doi":"10.1177/00157325211018890","DOIUrl":"https://doi.org/10.1177/00157325211018890","url":null,"abstract":"To delve deeper into the rise of trade in commercial services as the most important determinant of the recent increase in digital trade, this article offers a decomposition of international service trade using the latest release of the Inter-Country Input–Output (ICIO) tables. The analysis decomposes international service trade into a split between (a) direct services exports and services embodied in goods, (b) advanced economies and the major emerging markets, and (c) the major commercial services industries. We show that overall direct service exports have become more important relative to services embodied in goods, especially in advanced economies (the ‘cross-border’ effect). Further, we show that for emerging markets, the rise of the exports of services comes from the increase in volume of export of goods, which embed services and not because of an increased share of services embodied in the domestic value of exported goods (the ‘embodied volume’ effect). Finally, we show that the increase in services trade can be attributed to the increase in traded information technology (IT) services and not so much to that in financial and business services that are increasingly traded digitally across borders (the ‘plain vanilla digitalisation’ effect). JEL Codes: F14, F15, G20","PeriodicalId":29933,"journal":{"name":"Foreign Trade Review","volume":"11 1","pages":"238 - 256"},"PeriodicalIF":1.3,"publicationDate":"2021-07-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87963837","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-07-08DOI: 10.1177/00157325211021503
L. Singh
This article investigates the impacts on the India–Association of Southeast Asian Nations (ASEAN) Free Trade Agreement (IAFTA) on trade creation and trade diversion. The gravity model is employed, where multilateral resistance terms are included. A panel data set of 45 countries that included India, ASEAN-10 nations and India’s top 34 trading partners in 2018 were used for the period from 1996 to 2018. The article explored that IAFTA leads to a trade creation in total bilateral trade in terms of exports and imports. The analysis further explored that the import creation effect was higher than that of the export creation effect.
{"title":"Impact of India-ASEAN Free Trade Agreement: An Assessment from the Trade Creation and Trade Diversion Effects","authors":"L. Singh","doi":"10.1177/00157325211021503","DOIUrl":"https://doi.org/10.1177/00157325211021503","url":null,"abstract":"This article investigates the impacts on the India–Association of Southeast Asian Nations (ASEAN) Free Trade Agreement (IAFTA) on trade creation and trade diversion. The gravity model is employed, where multilateral resistance terms are included. A panel data set of 45 countries that included India, ASEAN-10 nations and India’s top 34 trading partners in 2018 were used for the period from 1996 to 2018. The article explored that IAFTA leads to a trade creation in total bilateral trade in terms of exports and imports. The analysis further explored that the import creation effect was higher than that of the export creation effect.","PeriodicalId":29933,"journal":{"name":"Foreign Trade Review","volume":"498 1","pages":"400 - 414"},"PeriodicalIF":1.3,"publicationDate":"2021-07-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73805176","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-07-08DOI: 10.1177/00157325211018329
N. Yasar
This study investigates the relationship between external borrowing and economic growth in the Commonwealth Independent States during the period 1995–2018. Autoregressive distributed lag (ARDL) model is employed to determine the co-integration relationship among the series and then vector error correction model (VECM) is used to analyse the causality between external debt and income. The obtained results suggest that there is a negative long-term unidirectional causal relationship running from external debt to GDP presenting a strong evidence of existence of debt overhang hypothesis. The possible reasons for this unidirectional causal relationship can be explained by poor management of provided financial resources and incomplete governance in economic transition process along with structural rigidities and immature institutions in these countries which, in the long term, resulted in insufficient capital charged to service external debt. The policymakers in these post-Soviet countries should not use foreign loans to capitalise the deficits in the economies; instead, they should be more determined in employing these funds in the areas that will create national value-added production and, thus, future income. JEL Classification: C10, F34, H63
{"title":"The Causal Relationship Between Foreign Debt and Economic Growth: Evidence from Commonwealth Independent States","authors":"N. Yasar","doi":"10.1177/00157325211018329","DOIUrl":"https://doi.org/10.1177/00157325211018329","url":null,"abstract":"This study investigates the relationship between external borrowing and economic growth in the Commonwealth Independent States during the period 1995–2018. Autoregressive distributed lag (ARDL) model is employed to determine the co-integration relationship among the series and then vector error correction model (VECM) is used to analyse the causality between external debt and income. The obtained results suggest that there is a negative long-term unidirectional causal relationship running from external debt to GDP presenting a strong evidence of existence of debt overhang hypothesis. The possible reasons for this unidirectional causal relationship can be explained by poor management of provided financial resources and incomplete governance in economic transition process along with structural rigidities and immature institutions in these countries which, in the long term, resulted in insufficient capital charged to service external debt. The policymakers in these post-Soviet countries should not use foreign loans to capitalise the deficits in the economies; instead, they should be more determined in employing these funds in the areas that will create national value-added production and, thus, future income. JEL Classification: C10, F34, H63","PeriodicalId":29933,"journal":{"name":"Foreign Trade Review","volume":"9 1","pages":"415 - 429"},"PeriodicalIF":1.3,"publicationDate":"2021-07-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88197616","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-07-08DOI: 10.1177/00157325211024003
Kaveri Deb
Trade across countries in the world has assumed a new dimension with the emergence of global value chains (GVCs). GVCs are associated with trade in intermediate parts and components being processed and assembled in multiple countries. The current article analyses the impact of India’s participation in GVCs on the wage gap between male and female workers. Dearth of studies exploring this issue in the Indian context is a motivation for the current research. India’s participation in GVCs is measured by two indicators—domestic value added in intermediate goods as a share of gross exports (DVAXINT) and foreign value-added share of gross exports (FVAX). Both pooled and panel regression analyses based on secondary sources of data suggest that none of the indicators of GVCs have been helpful in improving the relative wages of female workers in India. JEL Codes: C33, F14, F16, F23
{"title":"Global Value Chains in India and Their Impact on Gender Wage Disparity","authors":"Kaveri Deb","doi":"10.1177/00157325211024003","DOIUrl":"https://doi.org/10.1177/00157325211024003","url":null,"abstract":"Trade across countries in the world has assumed a new dimension with the emergence of global value chains (GVCs). GVCs are associated with trade in intermediate parts and components being processed and assembled in multiple countries. The current article analyses the impact of India’s participation in GVCs on the wage gap between male and female workers. Dearth of studies exploring this issue in the Indian context is a motivation for the current research. India’s participation in GVCs is measured by two indicators—domestic value added in intermediate goods as a share of gross exports (DVAXINT) and foreign value-added share of gross exports (FVAX). Both pooled and panel regression analyses based on secondary sources of data suggest that none of the indicators of GVCs have been helpful in improving the relative wages of female workers in India. JEL Codes: C33, F14, F16, F23","PeriodicalId":29933,"journal":{"name":"Foreign Trade Review","volume":"37 1","pages":"452 - 472"},"PeriodicalIF":1.3,"publicationDate":"2021-07-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89340040","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-06-14DOI: 10.1177/00157325211015468
Swargodeep Sarkar
The most sanctified obligation of the World Trade Organization (WTO) is the promotion and facilitation of international trade and liberalisation of the world economy. Although WTO members are committed to the WTO principle of free flow of goods and services among its members, the WTO permits its members to retain certain regulatory powers under its system to impose trade-restrictive measures based on certain exceptions, like, among other things, public morality under Article XX(a) of the General Agreement on Tariffs and Trade (GATT, 1994). Nevertheless, the question remains: what is public morality for a WTO member, and how far may this clause be invoked in defence of adopting trade-restrictive measures? Recently, the WTO panel on the US tariff case revived the long-standing debate on international trade versus public morality. Is a WTO member free to choose any trade-restrictive measure under the cloak of public morality? Then, what mechanism has the WTO panel/AB (Appellate Body) envisaged to check WTO members from adopting any trade-restrictive measure based on public morals? This article tries to answer these questions by analysing previous WTO disputes related to trade and morality. Against this background, this article looks back at the history of the public-morals exception clause, revisits previous WTO case laws on the public-morals exception and tries to ascertain the precise meaning of public morality—how the WTO Dispute Settlement Body (DSB) checks and balances two conflicting principles, that is, the right to regulate and the principle of free trade—and whether WTO has successfully developed a coherent jurisprudential approach to deal with contradictory interests, that is, trade versus morality. JEL Codes: F, F1, F13
{"title":"Free Trade vis-à-vis Morality: Revisiting the Public-Morals Exception Clause in the World Trade Organization","authors":"Swargodeep Sarkar","doi":"10.1177/00157325211015468","DOIUrl":"https://doi.org/10.1177/00157325211015468","url":null,"abstract":"The most sanctified obligation of the World Trade Organization (WTO) is the promotion and facilitation of international trade and liberalisation of the world economy. Although WTO members are committed to the WTO principle of free flow of goods and services among its members, the WTO permits its members to retain certain regulatory powers under its system to impose trade-restrictive measures based on certain exceptions, like, among other things, public morality under Article XX(a) of the General Agreement on Tariffs and Trade (GATT, 1994). Nevertheless, the question remains: what is public morality for a WTO member, and how far may this clause be invoked in defence of adopting trade-restrictive measures? Recently, the WTO panel on the US tariff case revived the long-standing debate on international trade versus public morality. Is a WTO member free to choose any trade-restrictive measure under the cloak of public morality? Then, what mechanism has the WTO panel/AB (Appellate Body) envisaged to check WTO members from adopting any trade-restrictive measure based on public morals? This article tries to answer these questions by analysing previous WTO disputes related to trade and morality. Against this background, this article looks back at the history of the public-morals exception clause, revisits previous WTO case laws on the public-morals exception and tries to ascertain the precise meaning of public morality—how the WTO Dispute Settlement Body (DSB) checks and balances two conflicting principles, that is, the right to regulate and the principle of free trade—and whether WTO has successfully developed a coherent jurisprudential approach to deal with contradictory interests, that is, trade versus morality. JEL Codes: F, F1, F13","PeriodicalId":29933,"journal":{"name":"Foreign Trade Review","volume":"27 1","pages":"476 - 490"},"PeriodicalIF":1.3,"publicationDate":"2021-06-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74447744","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
京公网安备 11010802042870号
京ICP备2023020795号-1
扫码关注我们
求助内容：
应助结果提醒方式：