Since the outbreak of the COVID-19 pandemic, global trade and the rules-based multilateral trading system have experienced unprecedented disruptions and mounting challenges. While COVID-19 is a well-known cause, many other problems are arguably more fundamental and hence likely to have a systemic and enduring impact. One prominent problem concerns the nexus between trade and sustainability. The early 2000s were dominated by ‘trade and … ’ debates that explored the intersection of trade and environmental and social values. Since the mid-2010s, however, that nexus has been increasingly warped through the rise of economic nationalism and (green) industrial policy, the escalation of geopolitics, and strategic competition among major powers, amongst other factors. Cumulatively, these disruptions and challenges have pushed governments to shift their thinking, strategies, priorities, and even their definition of the ‘end goal’ of trade policy. With trade increasingly being viewed as a means rather than the end, resilience, diversification, national security, inclusiveness, and sustainability have become possible end goals of trade policy.

Recent years have seen an increased focus on the implementation of Preferential Trade Agreements (PTAs). While the number of PTAs has risen remarkably since early 2000, data on the utilization of preferential tariffs under these agreements point out that some businesses have not gained access to all the benefits that PTAs can provide. When utilization rates are low, the impact of the agreement will likely differ from what was anticipated by ex-ante economic research. This paper conducts a dynamic Computable General Equilibrium (CGE) analysis of the expected impact of the EU–Japan Economic Partnership Agreement and compares a scenario that includes realistic preference utilization data with a standard scenario where all tariff liberalization is assumed to be fully utilized by businesses. The results show considerable differences between the two scenarios and illustrate the need to make the inclusion of credible utilization data standard practice in the modelling of international trade.

The 2022 Agreement on Fisheries Subsidies (AFS) is the culmination of over 20 years of negotiations within the WTO's Doha Development Round. Although it can be considered a small victory in the fight against declining fish stocks, the Agreement remains unfinished and underdeveloped. Of particular concern is the enforceability of the Agreement. While WTO Members recognize that the AFS was created to deal with a problem that has both socioeconomic and environmental implications, the Agreement relies on established WTO dispute settlement rules, which were created to resolve trade disputes. The paper assesses the difficulties of enforcing the AFS under these rules and considers additional provisions that could be included in subsequent negotiating rounds to ensure an effective and enforceable agreement. Recommendations cover different stages of the dispute settlement process and include alternative means of dispute resolution, measures to expedite proceedings, and retaliation procedures adapted to the AFS.

Industrial policy interventions affecting international trade and investment are motivated by a mix of economic and non-economic objectives. Some are explicitly protectionist, targeting an expansion of domestic production; others are not but have adverse impacts on trade, reducing the potential role of trade as a means to help attain non-economic objectives efficiently. The prospects for open trade to contribute to the realization of non-economic objectives are enhanced if states consider the extent to which they have similar goals and cooperate in designing industrial policies to attain them. Cooperation to attenuate negative spillovers and improve the prospects of attaining underlying goals is in the self-interest of states. Arguments that international cooperation on industrial policy is politically infeasible or constitutes an undesirable erosion of sovereignty are misconceived given the significant opportunity costs of uncoordinated unilateral industrial policy interventions.

The Dispute Settlement Mechanism (DSM), once regarded as the jewel in the crown of the World Trade Organization (WTO), has been facing a variety of serious criticisms for its inherent limitations and problems while its appellate review function has been paralyzed. Discussions on the reform of the WTO DSM have been under way for several years now. Many key items are on the reform agenda, one of which is to introduce Alternative Dispute Resolution (ADR) proceedings to the WTO DSM. Among several options of ADR, ‘mediation’ can offer an important set of tools for the WTO and its Members to resolve disputes in a more efficient and prompt manner. If properly structured, mediation can complement the existing binding proceedings of panels and the Appellate Body. At the same time, introduction of mediation to the WTO DSM may also cause additional legal and practical problems. It may cause further delays, confidentiality traps, due process myriads, and enforcement loopholes. It is vital to introduce mediation provisions to address those critical problems. Systematized and structuralized mediation in the WTO DSM will be able to offer a viable alternative path to resolve certain complex and sensitive disputes.

Amid a new era of disruption spawned by looming climate threats and significant geopolitical tensions, an increasing number of countries have favored a more robust green industrial policy (GIP) to reduce carbon emissions and achieve other economic, political, and geostrategic objectives. The use of multi-purpose GIPs not only raises questions regarding the policies' compatibility with the World Trade Organization (WTO) rules but also, more broadly, profoundly implicates the interface between energy, trade, and the environment. This article selects China, the United States, and the European Union as case studies and provides a thorough analysis of the specific text and context of their GIPs to identify the new trends that deviate from past practices in order to capture the policy transformation. It highlights the disruptively adverse implications of the multi-purpose GIPs on the multilateral trading system. However, the WTO has an opportunity to mitigate such disruptions and avoid a seemingly unavoidable clash by facilitating international cooperation and coordination in the design and implementation of multi-purpose GIPs, particularly among major clean energy producer countries. In doing so, the WTO can strengthen its credibility and stability while also minimizing the misalignment of the diverse objectives and ensuring the decarbonization efforts will not undermined.

In an era marked by the ‘technologization’ of modern warfare and the privatization of military supply chains, numerous items possess dual-use potential, capable of serving both civilian and military ends. Concurrently, governments increasingly view the acquisition of specific goods, materials, services, and technologies by rival states as a threat to their security. As a result, economic restrictions imposed on dual-use items, including export controls, have proliferated in recent years. These measures have elicited concerns regarding disguised protectionism and potential non-compliance with trade agreements. Central to the debate is the difficulty to strike a balance between addressing legitimate security imperatives and preventing economic protectionism. This article delves into the intersection of trade and security in the regulation of dual-use goods. It offers a focused examination of Article XXI(b)(ii) of the General Agreement on Tariffs and Trade (GATT) concerning trade restrictions on products destined for military use. The paper first reveals limitations of this provision in governing the regulation of dual-use items. Furthermore, it introduces the concept of a ‘purpose test’ provided by the provision as a safeguard against abusive invocation. Lastly, it sheds light on the challenge posed by the standard of proof issue, which complicates the review and mitigation of bad-faith invocations of security exceptions.

Multifaceted geopolitical conflicts have led to disruptions in the trade regime and multilateral negotiations. As a paradigm shift, green regionalism has emerged as a new normative process for regional economic frameworks to integrate and operationalize environmental sustainability. The article offers the first interdisciplinary analysis of green regionalism in world trade law. It argues that green regionalism, which has evolved amid various waves of global regionalism, constructs the normative foundation for ‘Trade and Sustainability 2.0’. The article employs the concept of recognition in international relations to unveil the motivations and actions of major states in catalyzing green regionalism. Legal and political challenges confronting the Environmental Goods Agreement of the World Trade Organization, environmental agreements, and mega-trade agreements are also examined. Second, the article explores the multipolar frameworks for implementing green regionalism. Case studies involving recent developments of US and EU trade pacts, as well as of new Asia-Pacific green economy agreements, shed light on the trade-sustainability nexus. Hence, the theoretical and empirical implications of the research are valuable for devising trade law approaches to advancing Sustainable Development Goals.

The obligation of stability generally requires host States to maintain a relatively stable regulatory framework to mitigate political risks facing foreign investments. It has played a significant role in international investment tribunals’ review of host States’ renewable energy transition policies. This paper critically reviews tribunals’ interpretation of the obligation with a particular focus on the Spanish cases involving renewable energy incentive schemes. It canvasses the two ‘dimensions’ adopted by investment tribunals in the interpretation of stability, namely the protection of legitimate expectations and States’ right to regulate for public purposes. Examining the contents of the two dimensions separately, this paper argues that legal stability should be disentangled from the notion of legitimate expectations and be assessed through the reasonableness of regulatory changes per se. It further argues that an intrusive interpretation of legal stability lacks legal and institutional bases; instead, more deferential standards should be adopted in the review of renewable energy transition policies.

In the face of ongoing disruptions to the multilateral trade regime, from deadlock at the WTO to the rise in unilateralism, this contribution examines the role that free trade agreements (FTAs) can play in supporting the adoption of common standards for sustainable development. It does this in three moves: first, it reframes the role of FTAs from sources of obligation and mechanisms of compliance to sites of economic diplomacy where governments can shape international standards through FTA structures; second, it unpacks the relationship between regulation and standards through three case studies (dolphin-safe labelling, automotive standards, and nutrient profiling), identifying means through which FTAs can be leveraged by trade policy actors; third, it draws on these lessons to examine how FTAs can support the uptake of key new standards and quasi-standards for sustainability, in this case, the ISO Net Zero Guidelines. Finally, this contribution reflects on the implications of reappraising the development of world trade law as part of the practice of economic diplomacy.

The urgency to tackle climate change has placed sustainable development at the centre of recent trade related debates. An emerging consensus is that trade should be considered and can be used as means to achieve sustainable development goals. As the circumstances are changing, one issue to be addressed is how to adjust trade negotiations which used to be the main approach to pursuing market opening and liberalization with the support of the theory of comparative advantage. In this context, this paper examines trade negotiations on environmental services by focusing on developing countries' participation. Environmental services and related trade play a critical role in achieving environmental and sustainable development goals. Nevertheless, developing countries' participation in environmental services trade negotiations has been limited. By analysing the reasons behind such limited participation and assessing some new approaches, this paper attempts to explore how environmental services trade negotiations could be adapted to better engage developing countries and serve Sustainable Development Goals.

The exercise of environmental ‘leverage’ via trade-related measures and trade in environmental goods offers opportunities to tackle the climate crisis and advance transnational decarbonization. Inward-looking, adversarial, and short-term national security-centred approaches, however, are disrupting the trade and climate change mitigation linkage. This article employs the race for critical raw materials and US and EU strategies to promote the net-zero transition at the domestic level as case studies to illustrate the environmental pitfalls of the ‘securitization’ of the trade and climate change mitigation nexus. The article demonstrates that the pursuit of strategic dominance in key net-zero sectors, attempts to exclude systemic rivals and reshore supply chains, opportunistic forms of friendshoring and loose agreement on regulatory means jeopardize recourse to environmental ‘leverage’ and undermine decarbonization at both national and transnational levels. This analysis casts a light on the inherent tension between national security and climate change mitigation. Taking stock of these findings, the article advocates a radically different approach to the governance of the trade and climate change mitigation nexus.

‘De-risking’ is the latest buzzword in the China strategy of the United States and its allies. It means limiting dependence on and engagement with China in select strategic sectors. One of such sectors concerns critical minerals (CMs) which are essential for the ongoing green economic transition. To secure access to CMs and reduce reliance on China, the US and its allies have been developing networks for ally-shoring supply chains. A major problem with the ‘de-risking’ strategy in this regard is that it treats China as the risk and hence excludes China from the discussions and collaboration on global supply chain issues. In this paper, we argue that this strategy fails to consider China's strategies and policies regarding CMs. We therefore offer a detailed analysis of China's policies which shows that they have been primarily aimed at addressing internal challenges and policy priorities in China rather than dominating, weaponizing, or causing disruptions in global supply chains. To address supply chain risks most effectively, international collaborative frameworks should engage with, rather than exclude, China. Confrontational strategies with ‘China being the risk’ at the core might themselves be a risk by undermining rational policymaking and leading to disruptive policies.

With the recent passage of the Carbon Border Adjustment Mechanism (CBAM), the free allocation of emission permits under the EU Emissions Trading System (EU ETS) that currently acts as a safeguard against emissions leakage and industrial relocation will progressively be phased out. Because the CBAM only covers imports, however, European goods exported into global markets stand to become more vulnerable to emissions leakage. Different policy options have been discussed to counter such export-related leakage, but they variously face concerns regarding their environmental, political, and legal implications. We describe and evaluate the three most important policy options based on their potential to reduce export-related leakage, support the net-zero transformation in Europe as well as globally, ensure conformity with international trade law, secure administrative feasibility, and foster political acceptance by affected trade partners. While no single option outperforms its alternatives on all criteria, our analysis identifies targeted innovation support as a promising option because it minimizes legal and political risks while also offering climate benefits beyond leakage protection for European industry. We then discuss the sectors that are most likely to require innovation support, the policy instruments that could serve to operationalize such support, and potential funding sources. We conclude with guiding principles for technology support measures, reflecting on the implications of the current surge in industrial policy within Europe and beyond.

The article explores how the COVID-19 pandemic revived discussions on the importance of local pharmaceutical production for promoting health security and resilient health systems. It examines the World Health Organization's hub and spoke mRNA vaccine production model (mRNA hub), a global initiative that aims to establish sustainable, local mRNA manufacturing capabilities in low- and middle-income countries in response to the inequities in access to COVID-19 vaccines and the trade disruptions during the pandemic. Using the mRNA hub as case study, the paper discusses how the tectonic shift towards local production implicates supply and license agreements, and thus IPRs. The paper maps the intellectual property challenges that might impact the mRNA hub's sustainability and provides recommendations on how to enhance the initiative's chances of success and foster a more equitable pharmaceutical sector in the future.