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Working Papers / Global Economics: Trade Investment and Development

2017

Promoting Coherence between PTAs and the WTO through Systemic Integration

Author(s): Pamela Apaza Lanyi and Armin Steinbach

Topic(s): Trade, Investment and International Cooperation //

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ABSTRACT

Promoting coherence between PTAs and the WTO through systemic integration The proliferation of preferential trade agreements (PTAs) has resulted in a heterogeneous regime of trade rules applicable among WTO Members. The interplay between PTA and WTO rules has several implications, including risks of legal tensions and incoherence between both regimes, as well as between overlapping networks of PTAs. Consequently, adjudicative bodies both under regional PTAs and global WTO dispute settlement mechanisms are increasingly confronted with taking account of alien legal sources for the purpose of interpretation. Coherence between PTA and WTO rules thus depends on the degree to which adjudication at both levels – PTA and WTO – allows integration of alien legal sources. This paper explores the role of systemic integration as a method of interpretation under public international law allowing adjudicating bodies to deal with possible tensions and promote coherence within international trade law. It traces the various approaches to systemic integration pertaining to international trade rules as employed under both WTO and PTA adjudication. While systemic integration offers a public international law tool for reducing fragmentation of substantial law, there is heterogeneity in adjudicative practice regarding the readiness to employ systemic integration for the purpose of interpretation. The article identifies possible avenues through which future dispute settlement could exploit the potential for coherence through systemic integration, as well as elements which could be taken into consideration when integrating multilateral and preferential rules. It also provides insight on how PTAs could facilitate the application of systemic integration by adjudicating bodies at both levels.