McGill Law Journal ~ Revue de droit de McGill
EAST ASIAS ENGAGEMENT WITH COSMOPOLITAN
IDEALS UNDER ITS TRADE TREATY DISPUTE
PROVISIONS
C.L. Lim*
An East Asian view about how trade dispute
settlement systems should be designed is slowly
emerging. Democratically-inspired trade law scholar-
ship and cultural explanations of the international law
behaviour of the Southeast and Northeast Asian trad-
ing nations have failed to capture or prescribe the ac-
tual treaty behaviour of these nations. Instead, such
behaviour has resulted in the emergence of two differ-
ent treaty models for the peaceful settlement of trade
disputes. The first, which seems firmly established,
may be found in ASEANs 2004 dispute settlement
protocol and the regimes established under the China-
ASEAN, Korea-ASEAN, Japan-ASEAN, and ASEAN-
Australia-New Zealand FTAs. A second model, based
on the Trans-Pacific Strategic Economic Partnership
Agreement, could in time become an alternative model
for an Asia-Pacific-wide FTA (i.e., including the East
Asian nations within it). It adopts a more open ap-
proach; one which better accommodates greater trans-
parency in dispute proceedings. At least for now, the
two models coexist, obviating the need for East Asias
legal policy-makers to choose a clear, dominant design
for treaty-based trade dispute settlement in the region.
But it also means that East Asias trading partners
can influence East Asian nations, at least in those
trade agreements thatlike the Trans-Pacific Part-
nership Agreementinvolve negotiations with trans-
continental partners.
de
merge
des
Les
rglement
lentement.
Un point de vue est-asiatique sur la conception
diffrends
systmes
des
commerciaux
crits
acadmiques dinspiration dmocratique traitant du
droit commercial ainsi que les explications culturelles
du comportement des pays de lAsie du Sud-Est et du
Nord-Est en matire de droit international narrivent
ni cerner, ni prescrire leur comportement rel en
matire de traits. Ce comportement a plutt men
lmergence de deux modles de traits diffrents pour
la rsolution pacifique des diffrends commerciaux. Le
premier, qui semble solidement tabli, se trouve dans
le protocole de rsolution des diffrends de lANASE de
2004 ainsi que dans les rgimes tablis sous les
accords de libre-change (AL) Chine-ANASE, Core-
ANASE, Japon-ANASE et ANASE-Australie-Nouvelle-
Zlande. Un second modle, celui-ci bas sur lAccord
de partenariat conomique stratgique transpacifique
(APEST), pourrait ventuellement devenir un modle
dAL alternatif qui couvrirait toute lAsie-Pacifique
(i.e. y compris les pays de lAsie de lEst qui en font
partie). Ce modle adopte une approche plus ouverte
qui favorise mieux la transparence lors des procdures
relatives aux conflits. Pour linstant, les deux modles
coexistent. Cela fait en sorte que les responsables des
politiques juridiques de lAsie de lEst nont pas
choisir de modle clair et dominant pour la rsolution,
par lentremise de traits, des diffrends commerciaux
dans la rgion. Nanmoins, cela signifie aussi que les
partenaires commerciaux de lAsie de lEst peuvent
exercer de linfluence sur les pays est-asiatiques, du
moins quand il est question daccords commerciaux
qui, comme lAPEST, comprennent des ngociations
avec des partenaires transcontinentaux.
* Professor of Law, Chair of the East Asian International Economic Law & Policy Pro-
gram and Associate Dean for Academic Affairs, University of Hong Kong; Visiting Pro-
fessor of Law, Kings College London. This paper benefited from a grant received from
the Japan Society for the Promotion of Science. An earlier draft was read at the October
2009 meeting of the Asia WTO Research Network. I am grateful to Junji Nakagawa,
Dan Magraw, Julien Chaisse, Joel Trachtman, and the two anonymous reviewers of the
McGill Law Journal for their helpful comments. All views and errors are mine. Email:
chin.leng.lim@post.harvard.edu.
Citation: (2011) 56:4 McGill LJ 821 ~ Rfrence : (2011) 56 : 4 RD McGill 821
Chin Leng Lim 2011
822 (2011) 56:4 MCGILL LAW JOURNAL ~ REVUE DE DROIT DE MCGILL
Introduction
Five Arguments for Greater Transparency in Trade
Dispute Settlement
A. Is There a World Trade Court?
B. Is There a Trend Toward Greater Transparency?
C. Democracy as Ideal
D. A Heightened Search for Legitimacy Through
1. A Judicial System?
2. Still a Diplomatic Body
Cosmopolitan Engagement
E. The Need to Pursue Democratically Coherent
Trade Policies
I.
II.
Settling East Asian Trade Disputes
A. Asia and the International Settlement of Disputes
B. ASEAN
C. Trade Dispute Settlement in ASEANs Agreements
1. Studying East Asias Regional Trade Treaties
with China, Korea, Japan, Australia, and New Zealand
1. Introduction
2. Closed Proceedings and Confidential Submissions in
Trade Disputes
3. Arbitrators Confidentiality Obligation
4. Rules Governing the Presence of Parties and Third
Parties
5. Confidentiality of Tribunal Deliberations
6. Keeping the Existence of a Dispute Confidential
D. Enter the United States, and the Trans-Pacific Strategic
Economic Partnership Agreement
III.
Analytical Limitations of the Cultural Explanation
Conclusion
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825
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832
836
838
842
842
842
846
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851
851
852
852
853
854
854
855
856
859
EAST ASIAS ENGAGEMENT WITH COSMOPOLITAN IDEALS 823
Introduction
In the last ten years, there has been a proliferation of Regional Trade
Agreements (RTAs)1 in the East Asian region.2 Parties to RTAs are free to
choose between various models of dispute settlement, but we might also
ask what sort of trade dispute settlement model East Asian countries
should adopt. Should they choose closed or open models of trade dis-
pute settlement design, especially in light of the debate on increasing the
transparency of WTO dispute settlement? Should trade dispute proceed-
ings be open to the public, and should arbitral tribunals and panels re-
ceive unsolicited amici curiae briefs? East Asiacomprising the North-
east and Southeast Asian sub-regionsdeserves our attention because
this vast region promises to be a melting pot of ideas about trade rule de-
sign in light of the emergence in recent years of transcontinental RTAs
between the United States and Asian nations, as well as the entry of
Canada, Australia, the European Communities (EC) and others into the
RTA race in the wider Asia-Pacific region.
US RTAs, for example, have conformed to an open model.3 Others,
such as Australias FTAs, have been more equivocal and have adopted
both transparent and closed regimes. This, presumably, is a result of indi-
vidual negotiating dynamics and possibilities as much as it involves ques-
tions about Australias foreign policy priorities. On the other hand, the
Association of Southeast Asian Nations (ASEAN) has resisted an open
model, either in the dispute settlement system for the ASEAN Free Trade
Area (AFTA),4 or under the various ASEAN Plus One FTAs with China
(China-ASEAN FTA),5 Korea (Korea-ASEAN FTA),6 Japan (the Japan-
1 This paper uses a broader termRTAswhich would include both free trade agree-
ments (FTAs) and customs unions, unless a more specific term (e.g., FTAs) is more
appropriate in the context in which the specific term arises.
2 See CL Lim, Whos Afraid of Asian Trade Regionalism, and Why? in Ross P Buckley,
Richard Weixing Hu & Douglas W Arner, eds, East Asian Economic Integration: Law,
Trade and Finance (London, UK: Edward Elgar, 2011) (forthcoming).
3 See e.g. United States-Singapore Free Trade Agreement, 6 May 2003, art 20.4.(4)(d) (en-
tered into force 1 January 2004), online: Office of the United States Trade Representa-
tive
Agreement, 6 June 2003, art 22.10(1) (entered into force 1 January 2004), online: Office
of the United States Trade Representative
4 See Framework Agreements on Enhancing ASEAN Economic Cooperation, 28 January
1992, online: ASEAN
Agreement on the Common Effective Preferential Tariff Scheme for the ASEAN Free
Trade Area, 28 January 1992, online: ASEAN
5 Framework Agreement on Comprehensive Economic Co-operation between ASEAN and
the Peoples Republic of China, 4 November 2002, online: ASEAN
work Agreement on Comprehensive Economic Co-operation between ASEAN and the
824 (2011) 56:4 MCGILL LAW JOURNAL ~ REVUE DE DROIT DE MCGILL
ASEAN FTA, hereafter Japan-ASEAN),7 and with Australia and New
Zealand (AANZFTA).8 Many ASEAN and East Asian countries are also
the ones arguing against further transparency in Genevas dispute set-
tlement system (e.g., regarding public submissions, open proceedings, and
amici curiae briefs). They argue that transparency threatens the inter-
governmental nature of the system, making East Asia and the wider Asia-
Pacific region an important site in which such debate now takes place.
Part I addresses some of the main arguments for having greater
transparency in trade dispute settlement. Part II discusses developments
in East Asia and the Asia-Pacific region. Part II also evaluates the likeli-
hood of greater transparency in East Asian trade dispute settlement de-
sign as these nations begin to integrate their economies between them-
selves, and also with their trading partners within the broader Asia-
Pacific region and beyond. Part III argues against resorting to cultural
and democratic explanations of (and prescriptions for) East Asian treaty
behaviour in favour of a pragmatic understanding that accepts both the
entrenchment of an East Asian, closed model of trade dispute settle-
ment, and the limited success of democratic arguments thus far in modify-
ing the treaty behaviour of these nations. Democratically informed schol-
arship is more likely to have an impact on East Asias current and future
transcontinental trading partners, although this paper does not claim
that Western FTAs are prime exemplars of cosmopolitanism. There is
simply a greater likelihood of receptivity to cosmopolitan ideals in the dip-
lomatic and trade treaty-related behaviour of a number of Western trad-
ing nations. As we will go on to see, the United States and the European
Union have championed greater transparency in WTO trade dispute set-
tlement.
In any event, what we are seeing today is the emergence of a new, for
export model of trade dispute settlement design within East Asia where
East Asian nations sometimes find themselves negotiating trans-
continental deals with Western nations. Taken alongside East Asias own
Peoples Republic of China, 29 November 2004, online: ASEAN
6 Agreement on Trade in Goods under the Framework Agreement on Comprehensive Eco-
nomic Cooperation among the Governments of the Member Countries of the Association
of Southeast Asian Nations and the Republic of Korea, 24 August 2006 (entered into
force 13 December 2005), online: ASEAN
7 Agreement on Comprehensive Economic Partnership among Japan and Member States
of the Association of Southeast Asian Nations, 14 April 2008, online: Ministry of Foreign
Affairs of Japan
8 Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area, 27 Feb-
ruary 2009 (entered into force 1 January 2010), online: Australian Department of For-
eign Affairs and Trade
EAST ASIAS ENGAGEMENT WITH COSMOPOLITAN IDEALS 825
closed treaty model, we are therefore beginning to see two different
treaty models of trade dispute settlement emerge from within the Asian
region. While this new phenomenon seems real enough, its causes may be
harder to explain. Could it be that some East Asian trading nations now
believe that trade agreements ought to conform to cosmopolitan ideals?
Can the West now expect this of East Asia? This paper argues against
the view that there has been any significant change in fundamental be-
liefs within East Asian policy circles. East Asias own closed model is al-
most invariably employed when East Asians enter into intra-regional
treaties. The more cosmopolitan arrangement under the Trans-Pacific
Strategic Partnership Agreement, which we will discuss further below,9
may be explained precisely on the basis that it is meant to form the basis
of a cross-Pacific deal with trading partners for whom, presumably, cos-
mopolitanism is something more than a convenience.
I. Five Arguments for Greater Transparency in Trade Dispute Settlement
A brief overview of some of the main arguments in favour of having an
open model of trade dispute settlement may be useful, before looking at
the current forms of East Asian treaty behaviour.
(1) The WTO Dispute System is a Law Court. The first argument re-
lies on the fact that the WTOs dispute settlement system already resem-
bles a judicial process.10 According to this argument, if the WTO dispute
system is a judicial system, or is closely akin to one, then it should be
open in the same way that judicial proceedings elsewhere, both domesti-
cally and internationally, are both public and transparent.11 Insofar as
many East Asian RTAs have adopted the WTO as a benchmark, these
9 The Trans-Pacific Strategic Economic Partnership Agreement is my main example here
as that is where a cosmopolitan model may be found of a treaty that is intended to have
broad regional application (i.e., as opposed to some of the many small bilaterals that
are, today, scattered about East Asia). See Trans-Pacific Strategic Economic Partner-
ship Agreement, 18 July 2005, online: SICE
10 See Robert E Hudec, The New WTO Dispute Settlement Procedure: An Overview of
the First Three Years (1999) 8:1 Minn J Global Trade 1 [Hudec, New WTO]; Michael
K Young, Dispute Resolution in the Uruguay Round: Lawyers Triumph over Diplo-
mats (1995) 29 Intl Law 389; JHH Weiler, The Rule of Lawyers and the Ethos of Dip-
lomats: Reflections on WTO Dispute Settlement in Roger B Porter et al, eds, Efficiency,
Equity, and Legitimacy: The Multilateral Trading System at the Millennium (Washing-
ton, DC: Brookings Institution Press, 2001) 334; Arie Reich, From Diplomacy to Law:
The Juridicization of International Trade Relations (1996-1997) 17 Nw J Intl L & Bus
775.
11 Thomas A Zimmermann, Negotiating the Review of the WTO Dispute Settlement Under-
standing (London: Cameron May, 2006) at 168; Bryan Mercurio & Rebecca Laforgia,
Expanding Democracy: Why Australia Should Negotiate for Open and Transparent
Dispute Settlement in its Free Trade Agreements (2005) 6:2 Melb J Intl L 485 at 493.
826 (2011) 56:4 MCGILL LAW JOURNAL ~ REVUE DE DROIT DE MCGILL
RTA systems should therefore be judged against a WTO/judicial standard
of openness. The argument turns on the nature or true character of the
WTO systemwhether the WTO model is truly a judicial model today, or
still resembles a diplomatic model of trade dispute settlement. We will
see that it contains elements of both.
(2) The Trend Today is for the World Trade Court to Become More
Open. A second argument has to do with the perception that there is now
a trend towards having more transparency in WTO dispute settlement.
According to this argument, if the WTO system is becoming more trans-
parent,12 then closed RTA dispute systems that mimic or copy the WTO
dispute settlement system are increasingly in danger of being inconsistent
with that which they had set out to copy.13
(3) Democracy and Cosmopolitanism as International Legal Ideals. A
third, related argument has to do with debate about what the WTO sys-
tem (and RTA dispute systems) should, ideally, become. WTO dispute set-
tlement should continue to move towards an open model and become
more transparent. Closed models should be avoided. One reason for say-
ing this is that there is an emerging international law principle of democ-
ratic governance which, in turn, is related to cosmopolitan ideals. In this
paper, however, we will refer to two meanings of cosmopolitanism which
have been adapted to the trade policy context. The first refers to a theory
of politics founded upon the notions of individual freedom, choice, and
autonomy (i.e., normative individualism, or the idea that our moral con-
cepts refer, in the last analysis, to individual rights). According to this
first meaning, the state qua treaty actor should act in ways that respect
and promote individual freedom, choice, and autonomy.14 A basic re-
quirement of sovereign trade treaty behaviour is therefore that such be-
haviour should be made known to individual citizens in the first place;
without such knowledge, the citizen will be unable to freely exercise a
consumer choice.15 In the latter case, the state acts illegitimately. Typi-
cally, such consumer choices will relate to particular trade policy out-
comes, including the outcomes of trade disputes. Secondly, cosmopoli-
ticsa term coined by Pascal Lamyhas now become a term of art. It re-
12 See WTO, United StatesContinued Suspension of Obligations in the ECHormones
Dispute, WTO Doc WT/DS320/8; CanadaContinued Suspension of Obligations in the
ECHormones Dispute, WTO Doc WT/DS321/8 (2005) (Communication from the
Chairman of the Panels) [ECHormones].
13 Mercurio & Laforgia, supra note 11 at 496-97.
14 Fernando R Tesn, The Kantian Theory of International Law (1992) 92:1 Columbia L
Rev 53.
15 Robert F Housman, Democratizing International Trade Decision-making (1994) 27:3
Cornell Intl LJ 699 at 701.
EAST ASIAS ENGAGEMENT WITH COSMOPOLITAN IDEALS 827
fers to a counter-statist view of the world trading order, one that em-
braces non-governmental, non-sovereign participation and debate.16 In the
first sense, the states internal legitimacy is at stake, while the second
sense of the term cosmopolitanism implicates the legitimacy of the world
trading system.
(4) Legitimacy is Functionally Important. A fourth argument is that
an undemocratic or anti-democratic dispute settlement system lacks
popular legitimacy, feeds the globalization backlash, and threatens the
functioning, health, and long-term viability of both the global trading sys-
tem and regional trading systems.17 This argument responds to the vari-
ous criticisms of the WTO following events in Seattle in 1999.18 These
range from dissatisfaction over the loss of jobs (e.g., Ross Perots reference
to a giant sucking sound going South),19 to the environmental impact of
economic globalization, as well as human and labour rights concerns over
the proliferation of third world sweatshops. Friends of the WTO generally
believe tragic misunderstanding underlies these criticisms about what the
WTO is and what it does. They argue that such doubt can be dispelled if
only there were greater knowledge about the WTOthat is, greater
transparency in what it does,20 and better understanding of how its dis-
pute settlement system works.21 Their arguments are not confined to sav-
ing the WTO system. Perot was talking about NAFTA.22
(5) Democratic Nations Must Push for Democratic Dispute Regimes.
A fifth argument has to do with the need for policy coherence between
the domestic political regimes of individual RTA countries and the supra-
national RTA systems they create. Thus, democratic nations should advo-
cate open, democratic trade dispute settlement in their RTA negotiations
16 Pascal Lamy, Harnessing Globalization, Do We Need Cosmopolitics? (Lecture deliv-
ered at the London School of Economics, 1 February 2001) online: London School of
Economics
17 Related to this are other benefits of bringing transparency to bearnamely, that trans-
parency increases the quality of third-party decision making, reduces the risk of corrup-
tion or undue influence, and could lead to a more coherent body of jurisprudence.
18 Jeffrey J Schott, ed, The WTO After Seattle (Washington, DC: Institute for International
Economics, 2000).
19 Transcript of 2d TV Debate between Bush, Clinton and Perot, The New York Times
(16 October 1992) A11.
20 James Bacchus, Trade and Freedom (London: Cameron May, 2004) [Bacchus, Trade
and Freedom].
21 Ibid.
22 See William Greider, A New Giant Sucking Sound, The Nation (31 December 2001)
online: The Nation
828 (2011) 56:4 MCGILL LAW JOURNAL ~ REVUE DE DROIT DE MCGILL
or risk undermining democracy both at home and abroad.23 While admit-
ting that trade policy probably cannot be used internationally to promote
periodic elections,24 such proponents argue that it can nonetheless be used
to promote ancillary valuesfor example accountability, openness, and
transparency.
hearsal of some old debates.
These arguments merit a closer examination, even if they require re-
A. Is There a World Trade Court?
1. A Judicial System?
The WTO dispute settlement system (DSS) today represents a far
more judicialized regime than the GATT regime of old, which evinced a
nuanced diplomatic style of adjudication.25 It is argued that the WTO
dispute settlement system should, therefore, be just as transparent. To
quote Zimmermann:
It is held that the lack of transparency in WTO dispute settlement
emanates from the old diplomatic model of dispute settlement
where compromise was encouraged and confidentiality played an
important role. In the litigation setting of a more judicial dispute
settlement system, withholding litigation documents would no
longer be appropriate.
By contrast, opponents to more transparency argue that the gov-
ernment-to-government nature of the WTO should be preserved.
Enhanced transparency would only lead to increased public pressure
on negotiators and thereby preclude mutually agreed settlements.26
Likewise, Mercurio and Laforgia have argued that:
It should come as no surprise that … the WTO model of dispute set-
tlement is a closed onethe GATT was, and the WTO is, a member-
driven organisation … [While] the dispute settlement process in the
GATT began as conciliation[,] … as the system moved towards an ad-
judicatory model, the reasons for keeping the process closed became
less persuasive.27
23 Mercurio & Laforgia, supra note 11 at 512-14.
24 Strictly speaking, nothing stops RTAs from being used to impose direct electoral obliga-
tions.
25 Hudec, New WTO, supra note 10 at 7. See also Young, supra note 10; Weiler, supra
note 10; Reich, supra note 10.
26 Zimmermann, supra note 11 at 168.
27 Mercurio & Laforgia, supra note 11 at 493.
EAST ASIAS ENGAGEMENT WITH COSMOPOLITAN IDEALS 829
The view that the WTO system resembles adjudication is unobjectionable
in itself. But it is a different matter when adjudication as a shorthand
expression for describing WTO dispute settlement becomes a statement
about what all trade dispute settlement should be about. In any event, the
fact that the WTO has moved towards adjudication, and resembles adju-
dication, does not make it so in the strictest sense of the word.
Arbitration and international adjudication are distinguishable by the
feature that both result in legally binding decisions or awards. Transpar-
ency is not a traditional distinguishing feature. In that sense they are no
different from resort to good offices, conciliation, and mediation, which
typically occur behind closed doors. Even as transparency increasingly be-
comes a feature of international adjudication and inter-state arbitration,
the WTO and RTA dispute systems remain distinguishable on this score
precisely because of their confidential nature. That is why WTO dispute
settlement is said to contain vestiges of the diplomatic model of dispute
settlement.28
There are other features to consider. First, WTO panel and appellate
body reports are not binding awards. They require adoption by a political
bodythe WTO dispute settlement body (DSB).29 No court reports to a po-
litical body and seeks political approval of its judgments, and even with
adopted panel and appellate body reports (that is. those which have al-
ready been adopted by the DSB) there is still the view that they do not
impose legally binding obligations as such.30
Secondly, to the extent that the WTO dispute settlement system re-
sembles arbitration, it resembles arbitration only in its archaic form. In
previous times, a friendly sovereign who was asked to arbitrate a dispute
between two nations might entrust the matter to experts who would then
make their recommendation to that sovereign in due course. The friendly
ruler would adopt their recommendation and issue a binding award.31
If that sounds familiar, it is precisely what the DSB does as a body com-
prising all the members of the WTO. The adopted report thereby enjoys
the imprimatur of the whole membership, almost all of whom are sover-
28 Debra P Steger, Peace Through Trade: Building the World Trade Organization (Lon-
don: Cameron May, 2004), at 296.
29 Agreement Establishing the World Trade Organization, April 1994, Annex 2, art 16(4),
17(14), online: WTO
30 See Judith Hippler Bello, The WTO Dispute Settlement Understanding: Less is More,
Editorial Comment, (1996) 90:3 AJIL 416; John H Jackson, The WTO Dispute Settle-
ment UnderstandingMisunderstandings on the Nature of Legal Obligation, Edito-
rial Comment, (1997) 91:1 AJIL 60 [Jackson, WTO Dispute Settlement]; Giorgia
Sacerdoti, Correspondence, (1997) 91 AJIL 89-90.
31 See e.g. Argentine-Chile Frontier Case (1969) 38 ILR 10.
830 (2011) 56:4 MCGILL LAW JOURNAL ~ REVUE DE DROIT DE MCGILL
eigns, much like enlisting the services of a powerful monarch as arbitra-
tor. In this respect too, WTO dispute settlement still retains the features
of diplomatic settlement.
Thirdly, the degree of control that disputing parties wish to exert over
the dispute settlement process, particularly over the selection of arbitra-
tors, distinguishes WTO panel settlement from international adjudica-
tion. One of the issues debated from time to time has been the proposal
for the WTO to have permanent panellists. The European Communities
have formally proposed such an arrangement, for example,32 although the
proposal goes back as far as 1998.33 Yet, to date, the WTO does not have
such a permanent set-up for panels. Instead, an ad hoc appointments sys-
tem characteristic of arbitration currently exists and is likely to remain on
account of the current lack of support for a permanent panel body (PPB).34
In fact, some of the arguments made against the idea of permanent panel-
lists are reminiscent of arbitration.35 They have to do with the extent to
which the sovereign members should exercise some degree of control over
the dispute settlement process.36
Fourthly, consultations are secret and may occur in parallel with dis-
pute settlement proceedings.37 In that regard too, WTO dispute settle-
ment continues to retain elements of diplomatic settlement. If it resem-
bles arbitration, it again represents that older model, which is often as-
sociated with secrecy.38 In diplomatic arbitration, such secrecy may extend
to the fact or the content of negotiations to resolve a dispute.39 Arbitra-
32 WTO, Dispute Settlement Body, Contribution of the European Communities and its
Member States to the Improvement of the WTO Dispute Settlement Understanding,
WTO Doc TN/DS/W/1, Special sess, (2002) at 2-4 (Section I: Moving from Ad Hoc to
More Permanent Panelists), 9 (Amendment of Certain Provisions of the Understand-
ing on Rules and Procedures Governing the Settlement of Disputes) at para 7, online:
WTO
33 Zimmermann, supra note 11 at 133.
34 Ibid at 135.
35 See AHA Soons, ed, International Arbitration: Past and Prospects (Dordrecht: Martinus
Nijhoff, 1990).
36 See Thomas Cottier, The WTO Permanent Panel Body: A Bridge Too Far? (2003) 6:1 J
Intl Econ L 187.
37 Agreement WTO, supra note 29, arts 5(2)(3).
38 On the historical importance of secrecy as a diplomatic doctrine, see GR Berridge, Di-
plomacy: Theory & Practice, 3d ed (London: Palgrave, 2005) at 110.
39 Ibid.
EAST ASIAS ENGAGEMENT WITH COSMOPOLITAN IDEALS 831
tions of such kind have probably not fallen entirely into disuse even to-
day.40
It is therefore an exaggeration to say that the WTO dispute settlement
system is adjudicatory, and to draw from that metaphysical finding the
proposition that all trade dispute settlement should represent domestic
court proceedings. At most, it may be said that WTO dispute settlement
resembles international adjudication in some important aspects.41 As for
the WTO systems resemblance to arbitration, there are many forms of
arbitration lying along an imaginary spectrum, and the WTO system still
contains significant elements that fall towards the diplomatic end of that
spectrum.
2. Still a Diplomatic Body
Admittedly, saying that no court submits its ruling to the approval of
a political body is not the end of the matter altogether. The DSBs adop-
tion of the panel or appellate body report is virtually automatic under the
WTOs Dispute Settlement Understanding (DSU) due to the operation of a
reverse consensus ruleso long as one DSB member favours adoption,
the report will be adopted.42 And however much the DSB is a political
body, the appellate body is not,43 and political debate in the DSB does not
affect the panel and appellate body report adoption process as such.44
What truly makes the WTO dispute settlement system a diplomatic
mechanism is that in the case of adjudication the winning plaintiff cannot
negate a judicial ruling. In the case of the WTO, the winning plaintiff, act-
ing with the consent of the other WTO members in the DSB, canin
40 For a view on the resilience of the distinction between legal and non-legal disputes,
see the discussion in MCW Pinto, The Prospects for International Arbitration: Inter-
State Disputes in Soons, supra note 35, 63 at 93-95.
41 Such a resemblance can be seen in the compulsory jurisdiction of the WTO dispute set-
tlement system, automatic adoption of panel and appellate body reports, and automatic
authorization of retaliation; in the appellate bodys rituals, such as the quasi-judicial
principle of collegiality that it adopts, the swearing in ceremony for appellate body
members, and the adversarial manner in which the latter conducts its proceedings; and
in securing a fairly high degree of predictability in its decision making, as well as a pi-
ous reliance on the Vienna Convention on the Law of Treaties when facing interpreta-
tive issues. See Steger, supra note 28 at 300-305.
42 See Jackson, WTO Dispute Settlement, supra note 30 at 60. See also Agreement WTO,
supra note 29, arts 6(1), 16(4), 17(14), 22(6).
43 See generally Keisuke Iida, Legalization and Japan: The Politics of WTO Dispute Set-
tlement (London: Cameron May, 2006) at 21 (the appellate body is legalistic, unlike the
panels, and leaves political considerations to the DSB).
44 See generally CL Lim, Law and Diplomacy in World Trade Disputes (2002) 6 Sing
JICL 436.
832 (2011) 56:4 MCGILL LAW JOURNAL ~ REVUE DE DROIT DE MCGILL
principle, at leastseek the rejection of a ruling of a panel or the appel-
late body. The WTO dispute settlement system was designed to cure the
situation where the losing party could block the adoption of a GATT panel
report, but it was probably not designed to deal with the situation where
the winning party, or the party which brought the claim, refuses to adopt
the report.45 While this seems unlikely to occur often in practice, it does
show that the system is unlike a domestic court. The WTO system does
not fully separate political rule from judicial rule. The WTOs political
branch holds sway over its adjudicatory system notwithstanding the fact
that the DSUs negative consensus rule is often easily, even routinely,
met.46
B. Is There a Trend Toward Greater Transparency?
In Geneva, the transparency debate was first sparked by the leakage
of panel reports. This resulted in questions about whether members could
actually discuss pending cases. It was against this backdrop that debate
arose about the merits of greater transparency,47 leading to diplomatic
proposals being put forward by the United States and Canada.48
Among the reasons given for greater transparency has been the need
to secure heightened legitimacy for the dispute settlement system, and
the futility of concealing parties arguments where panel reports will
eventually become public anyway. Another factor was the wider policy ar-
gument that greater openness is generally a good thing in trade policyit
leads to a Dracula effect (exposing evil to sunlight helps to destroy it).49
This view is well captured in James Bacchussplea:
We must open the doors of the WTO, and … let in the light of public
scrutiny. We must let the five billion people in the world who are
served by the WTO see the WTO … if we do not, the Members of the
45 See, for example, the Nicaraguan complaint against the 1985 US embargo, where Nica-
ragua itself blocked the adoption of the report on account of the fact that the panel was
prevented from addressing the issues which Nicaragua wanted addressed (i.e., the le-
gality of the US embargo under GATT article XXI): GATT, Minutes of Meetings (held on
29 May 1985), GATT Doc C/M/188 at 16, online: GATT Digital Library
46 C.f. Steger, supra note 28 at 300.
47 See e.g. Ruggiero Calls on Members Not to Talk about Cases Undergoing Dispute Set-
tlement, International Trade Reporter 15:8 (25 February 1998); WTO Chief Floats So-
lutions to Problem of Leaked Reports, International Trade Reporter 15:17 (29 April
1998). See also the further sources cited in Zimmermann, supra note 11 at 167, n 1.
48 Ibid.
49 Attributed to Jagdish Bhagwati. See Walter Goode, Dictionary of Trade Policy Terms,
5th ed (New York: Cambridge University Press, 2007) at 133 (dracula effect).
EAST ASIAS ENGAGEMENT WITH COSMOPOLITAN IDEALS 833
WTO will never secure the increased public support that will be
needed worldwide to continue to maximize all the mutual gains that
can be made from trade through a ruled-based world trading sys-
tem.50
Much depends, however, on what we mean by transparency. Accord-
ing to Bacchus, it does not mean that panel deliberations should be ex-
posed. He admits that no court does this. But panel proceedings, appellate
body oral hearings, and dispute settlement body meetings must be open
(some of this is already beginning to happen). Likewise, panels and the
appellate body should accept unsolicited amici curiae briefs.51
Others, such as the United States, go further. The United States has
not only proposed that panel, appellate body, and arbitration proceedings
should be open to the public, but that parties submissions should also be
made public, except for sections involving confidential information.52 Can-
ada made the same proposal,53 while the EC has proposed a slightly dif-
ferent version of the argumentthat is, that within ten days of panel es-
tablishment, the parties should agree on whether the proceedings should
be open to the public in whole or in part.54 According to the EC proposal,
the first substantive hearing could also be divided into two sections, one
that is open to the public, and the other closed. Amongst the Asian coun-
tries, Japan also called for parties submissions to be made public within
two weeks of each meeting.55
50 James Bacchus, Let the Sunshine in: One View of Dispute Settlement Understanding
Review in Julio Lacarte & Jaime Granados, eds, Inter-Governmental Trade Dispute
Settlement: Multilateral and Regional Approaches (London: Cameron May, 2004) 141 at
143.
51 Ibid at 145. For a survey of individual WTO Members views, see CL Lim, The Amicus
Brief Issue at the WTO (2005) 4:1 Chinese Journal of International Law 85 [Lim, The
Amicus Brief].
52 WTO, Dispute Settlement Body, Contribution of the United States to the Improvement
of the Dispute Settlement Understanding of the WTO Related to Transparency, WTO
Doc TN/DS/W/13, Special sess, (2002) at 2, s II (Open Meetings), online: WTO
53 WTO, Canada, Transparency and Derestriction, WTO Doc WT/GC/W/98, online: WTO
States and Canada on Transparency in WTO Work: Procedures for the Circulation and
Derestriction of WTO Documents, WTO Doc WT/GC/W/106, (1998), online: WTO
54 WTO, Contribution of the European Communities, supra note 32 at 20, para 32.
55 WTO, Dispute Settlement Body, Proposal by Japan on Negotiations on Improvements
and Clarifications of the Dispute Settlement Understanding, WTO Doc TN/DS/W/22,
Special sess, (2002) at 4, online: WTO
Japan]. For all these positions, see Zimmermann, supra note 11 at 169-70.
834 (2011) 56:4 MCGILL LAW JOURNAL ~ REVUE DE DROIT DE MCGILL
However, other Asian and developing countries such as Mexico, Ma-
laysia, Egypt, India, Taiwan, and the African Group strongly opposed this
view.56 The Asian states had previously played a notable role in resisting
unsolicited amici curiae briefs by (unsuccessfully) opposing the legal
power of panels and the appellate body to receive them.57 Other WTO
members have also opposed making WTO proceedings and submissions
public on account of the inter-governmental nature of the WTO dispute
settlement system. For example, Brazil, Chile, India, Mexico, and Uru-
guay have voiced their opposition to the possibility of media trials.58
Likewise with Norways concern with external pressure from interest
groups,59 while Switzerland has expressed the over-riding concern that
public access might actually prevent settlement in individual cases.60
Even if, in other respects, there is already a trend towards greater
WTO transparency (e.g., in the declassification of WTO documents and so
forth),61 the dissenting voices amongst members still need to be accounted
for. One of the most significant reasons given for saying that there is now
a trend towards openness ignores this fact. Much depends upon how we
should view the appellate bodys 2005 ruling in the ECHormones com-
pliance dispute. There, the appellate body allowed proceedings to be made
public through closed-circuit television. The appellate body reasoned that
nothing in the rules precluded the parties from opening up the hearings to
observers if the parties so chose.62 But that ruling, precisely because it re-
flects only the views and agreement of the parties in that case, cannot be
taken to support a more general view that
[t]his decision provides further evidence that not only is the WTO
moving away from the closed system, but that FTAs that narrowly
56 Ibid at 170.
57 See CL Lim, The Asian WTO Members and the Amicus Brief Controversy: Arguments
and Strategies (2006) 1 Asian J WTO & Intl Health L & Poly 85 [Lim, Asian WTO
Members].
58 Mercurio & Laforgia supra note 11 at 504.
59 Special Session of Dispute Settlement Body, Minutes of Meeting (held on 16 April 2002),
WTO Doc TN/DS/M/1 at para 30, online: WTO
60 WTO, Dispute Settlement Body, Minutes of Meeting (held on 10 September 2002), WTO
Doc TN/DS/M/4, Special sess, at para 45, online: WTO
Norwegian and Swiss objections are discussed in William J Davey, Reforming WTO
Dispute Settlement in Mitsuo Matsushita & Dukgeun Ahn, eds, WTO and East Asia:
New Perspectives (London: Cameron May, 2004) 91 at 135, n 126 [Davey, Reforming
WTO].
61 See Steve Charnovitz, The WTO and Cosmopolitics (2004) 7:3 J Intl Econ L 675 at
677-78.
62 ECHormones, supra note 12.
EAST ASIAS ENGAGEMENT WITH COSMOPOLITAN IDEALS 835
interpret the mechanisms based on WTO provisions may now con-
tradict the very system they copied.63
No RTA party would disagree that dispute proceedings could, or even that
they should, be opened up if the parties jointly agreed to do so. It is a use-
ful juncture to introduce a silent but significant development on the Asia-
Pacific RTA scene. The Trans-Pacific Strategic Economic Partnership
Agreement (currently comprising the basis of the Trans-Pacific Partner-
ship talks between New Zealand, Singapore, Chile, Brunei, Australia,
Vietnam, Peru, the United States, and Malaysia)64 provides exceptions to
the confidentiality rule should the parties to a dispute agree.65 Even with-
out such express treaty clauses, nothing should preclude bilateral RTA
parties from opening up dispute settlement proceedings (that is, waiving
their rights by agreement) where the matter solely concerns their rights
and obligations inter se. Presumably, the explicit provisions creating the
exceptions under the Trans-Pacific Strategic Economic Partnership
Agreement were thought necessary because of its plurilateral nature.
In the case of the ECHormones ruling, Canada, the United States,
and the ECthe principal proponents of transparencyall agreed to open
the hearings.66 The ruling was based specifically on the joint request of
the parties, and while it applies to cases in which the parties so agree,
that is not the same thing as saying that the WTO dispute settlement sys-
tem as a whole is moving away from the closed model. At most, the appel-
late body did not prevent the parties from choosing to adopt a procedure
which the rules do not explicitly disallow. It would have been more sig-
nificant had the appellate body ruled that hearings should be open re-
gardless of the views of the parties, or of one of the parties, or if WTO
members other than those very members who proposed greater openness
were to switch towards making such joint requests in their disputes. None
of this has yet occurred.
We might welcome the ECHormones compliance ruling. But to say
that there is a trend towards an open model, and that RTA parties that
have simply bilateralized and adopted the DSU in their RTAs are now
bound to adopt a more open model, overstates the matter. We cannot ex-
trapolate the pattern of things to come from the wishes of a few members.
63 Ibid.
64 The latest reports reveal that, as of August 2010, Canada has also expressed an interest
in joining the negotiations. See Canada Peeping in on Trans-Pacific Partnership Talks;
Investment Reform Urged by US Groups, The Council of Canadians (20 August 2010),
online: Council of Canadians Trade Blog
65 See further, Part II.C.4, below.
66 ECHormones, supra note 12.
836 (2011) 56:4 MCGILL LAW JOURNAL ~ REVUE DE DROIT DE MCGILL
C. Democracy as Ideal
Should RTAs perform no democratic role at all? With the demise of the
Cold War, there has been increased attention since the 1990s on whether
international law should uphold a right to democratic governance.67 Such
attention has been concerned with the activities of the Human Rights
Committee, the European Court of Human Rights, the European Com-
mission, and the Inter-American Commission in furthering an interna-
tional law right to democratic governance.68
But since RTA dispute settlement bodies also resemble these other in-
ternational courts, tribunals, and bodies, and because trade law also in-
volves the application of international legal rules, questions have under-
standably arisen about whether RTA dispute settlement should promote,
or at least not defeat democratic ideals.
Around the same time, fierce debate erupted over the democratic le-
gitimacy of supranational trade bodies such as the WTO and NAFTA.69
There was intense scrutiny of the domestic implications of entry into the
WTO in the United States and the European Union, leading to congres-
sional hearings in the former and litigation in the case of the latter.70 One
issue had to do with the perceived loss of sovereignty in light of common
perceptions about the enormous power that the WTO dispute settlement
system wields over national regulatory policies.71
It is therefore unsurprising that having greater transparency in RTA
dispute settlement systems has also come up for debate. Perhaps the best-
known argument for democratic trade decision making is that offered by
Robert Housman. According to Housman, universality may be better se-
67 See Thomas M Franck, The Emerging Right to Democratic Governance (1992) 86:1
AJIL 46; James Crawford, Democracy and International Law (1993) 64 Brit YB Intl L
113.
68 See ibid at 125-26.
69 For writing in the popular arena, see e.g. John R MacArthur, The Selling of Free
Trade: NAFTA, Washington, and the Subversion of American Democracy (Berkeley:
University of California Press, 2001).
70 See e.g. Walter Dellinger, Whether Uruguay Round Agreements Required Ratification
as a Treaty: Memorandum to Ambassador Michael Kantor, United States Trade Repre-
sentative (22 November 1994), online: Office of Legal Counsel, US Department of Jus-
tice, Office of Legal Counsel
Tribes testimony on the effect of the WTO DSS on states rights); Re the Uruguay
Round Treaties (1994), 1994 ECR I-5267, [1995] 1 CMLR 205 (Court of Justice of the
European Communities) (concerning the scope of the Commissions powers under arti-
cle 113 EC).
71 See e.g. John H Jackson, Sovereignty, the WTO and Changing Fundamentals of Inter-
national Law (Cambridge: Cambridge University Press, 2006).
EAST ASIAS ENGAGEMENT WITH COSMOPOLITAN IDEALS 837
cured by infusing trade decision making and regime design with democ-
ratic credentials because this can help prevent value-based economic
clashes.72 Nonetheless, Housman admits that
because many of the elements of democratic governance at the na-
tional level (for example, the election of representatives in free and
fair elections) are inapplicable in the statially oriented world of in-
ternational trade decision-making, this [argument] … focuses more
narrowly on the element of democracy that is most applicable to in-
ternational relations: the democratic right of citizens to have knowl-
edge of and participate in decisions that will [affect] their interests.73
Housmans proposal tries to avoid confusing domestic democratic legiti-
macy with international legitimacy.74 He distinguishes the international
legitimacy that supranational trade bodies require from, for example, the
kind of view expressed by the US house majority leader during the Peo-
ples Republic of Chinas WTO accession talksthat is, that trade policy is
a democratic tool and [w]e must look towards expanded trade as a sig-
nificant opportunity to build greater understanding and encouragement of
freedom and democracy.75 Yet it is doubtful that such a distinction can
always be maintained. In practice, an attempt to make trade decision
making and dispute settlement more participatory is just as likely to be
seen by a trading partner as an encroachment into its internal affairs. In-
sofar as democratic arguments could therefore lead potential RTA part-
ners towards a sense of rejection, or cause such countries to conceive of
the issue as a contest of moral-political values, they are likely to be self-
defeating. Questions about RTA design depend ultimately on the consent
of the RTA partners. Their resolution therefore involves negotiation, not
debate.
So how might democratic trade dispute regimes be promoted in East
Asia? For many East Asian countries, legitimacy is not always a matter of
addressing democratic gaps in public participation but involves the need
to secure better public understanding of the intended economic benefits of
trade liberalization. Various trade ministry and official RTA websites are
72 Housman, supra note 15 at 701.
73 Ibid at 703. Housmans argument draws on Carole Pateman, Participation and Democ-
ratic Theory (Cambridge: Cambridge University Press, 1970). But see Keohane and
Nye, who argue that democratic arguments are judged by their inputs, where the
main issues here are transparency and accountability: Robert O Keohane & Joseph S
Nye Jr, The Club Model of Multilateral Cooperation and Problems of Democratic Le-
gitimacy in Porter et al, supra note 10, 264 at 281-82.
74 For this criticism, see Robert E Hudec, Comment, in Porter et al, supra note 10, 295 at
298. See also Steger, supra note 28 at 264.
75 See also Raj Bhala, Enter the Dragon: An Essay on Chinas WTO Accession Saga
(2000) 15 Am U Intl L Rev 1469.
838 (2011) 56:4 MCGILL LAW JOURNAL ~ REVUE DE DROIT DE MCGILL
largely directed at informing businesses and voters about these benefits.
Why do they not focus on participation in trade policy decision making, as
opposed to commercially useful knowledge and consumer knowledge? We
need to distinguish two very different senses of transparencya thick
and a thin sense of the term. The cosmopolitan view, which we described
earlier, involves the thick sense of advocating trade policy-related public
information, but there is also a thin sense of doing so. East Asian nations
do not appear to question the view that members of the public (citizens,
workers, and consumers) will need to know something about how trade
policies will affect them, even if some East Asian nations have questioned
the need to introduce greater transparency into WTO trade dispute set-
tlement.76 So they agree that information about the aims and effects of
particular trade policies may have to be communicated to the public. But
while cosmopolitanism requires the communication of such information,
East Asian nations may have entirely extraneous policy reasons to do so
as part of an effort to sell individual policies (e.g., the benefits of having
an FTA program) to their citizenry. Impressionistically, at least, East
Asian nations are less likely to justify their policies along democratic
lines, but are more likely to talk about anticipated trade and commercial
gains. Another reason why providing public information may have noth-
ing to do with upholding cosmopolitan ideals may be gleaned from the ob-
servation that few East Asian nations (except Japan) have agreed with
the United States and Europe about the principled arguments for having
greater transparency at the WTO,77 and even fewer intra-East Asian
FTAs have evinced a high degree of commitment towards fostering
greater transparency in their trade dispute settlement arrangements.78
Finally, it can be counter-productive for democratic trading nations to
frame trade negotiations in explicitly democratic terms. This could cause
potential RTA partners to doubt the existence of a genuine commitment
towards building a trade relationship, and can backfire.
D. A Heightened Search for Legitimacy Through Cosmopolitan Engagement
Perhaps what we are searching for is a more pragmatic and attractive
version of the democratic argument. One example may be the view that a
transparent and accountable international trade decision making process
is more likely to be perceived to be legitimate. The argument arose from
the WTOs legitimacy crisis. It reflects James Bacchuss argument, dis-
cussed above, that if the WTO would only let in a little light, such mis-
76 Malaysia and Taiwan are two examples. See Zimmermann, supra note 11 at 170.
77 WTO, Proposal by Japan, supra note 55 at 4.
78 Discussed below, Parts II.B-C.
EAST ASIAS ENGAGEMENT WITH COSMOPOLITAN IDEALS 839
understandings might be resolved.79 In short, different rules or rule mak-
ing institutions enjoy differing degrees of compliance pull (that is, per-
ceived legitimacy),80 and getting institutional design right will likely
have a bearing on the legitimacy of the particular international body.81
To be sure, the WTO as a whole has become more transparent.
Documents have been declassified, and NGO participation has in-
creased.82 What is less certain is whether the WTOs legitimacy crisis had
that much to do with transparency in the first place. Complaints about
the legitimacy of WTO action are often substantive in nature, not merely
procedural or political. In the aftermath of the backlash against the WTO,
the current Director-General, Pascal Lamy, has called for greater atten-
tion to cosmopolitics in giving a name to what he sees as a potential so-
lution for the WTOs crisis. The solution furnished responds to a perceived
political-procedural need to involve non-governmental stakeholders more
closely in the everyday life of the WTO as an organization.83 While that
might address the poor light in which the WTO is sometimes viewed, a
number of examples suffice to illustrate that the real problem is not that
the WTO suffers from bad press, but rather why it does.
Saying that the WTO is easily misunderstood is insufficient. Where
governmental regulation of the market is justified ultimately on democ-
ratic grounds, new limitations on governmental action at the suprana-
tional level naturally lead to concerns over the possible emergence of a
democratic gap. Yet calling for greater citizen participation and ac-
countability treats the difficulty as nothing more than a shallow political
or public relations problem while genuine, substantive concerns about
commercial fairness and social justice lurk in the background. To take the
example of allegations of judicial activism on the part of the appellate
body in anti-dumping cases,84 businesses are allowed to express a legiti-
mate concern when it comes to dumping because they are rightly con-
79 See also Bacchus, Trade and Freedom, supra note 20 at 51-198 (an attempt to throw
light on what the appellate body does, and to justify what the WTO is and what it does
on the basis of liberty).
80 See Thomas M Franck, The Power of Legitimacy Among Nations (Oxford: Oxford Uni-
versity Press 1990). See also Steger, supra note 28 at 264-66. For its application to
NAFTA Chapter 11 (investor-state) arbitration, see Charles H Brower II, Structure,
Legitimacy, and NAFTAs Investment Chapter, (2003) 36 Vand J Transnatl L 37.
81 In the context of DSU reform, the majority of members, including the developing coun-
tries, have supported the US proposal for swifter circulation of panel reports: Davey,
Reforming WTO, supra note 60 at 135, n 125.
82 See Charnovitz, supra note 61 at 677-78.
83 See ibid at 675.
84 See Raj Bhala, New WTO Antidumping Precedents (Part One: The Dumping Margin
Determination) (2002) 6 Sing JICL 335 at 401; Steger, supra note 28 at 288.
840 (2011) 56:4 MCGILL LAW JOURNAL ~ REVUE DE DROIT DE MCGILL
cerned that a level commercial playing field should exist. When busi-
nesses that are regulated differently engage in predatory pricing, for ex-
ample, their competitors are entitled to protest. But when the appellate
body restricts the freedom of WTO members to employ trade remedies in
such cases, the fear arises that unfair trade from abroad cannot be
stopped by democratic national processes. In the United States, the con-
sent of business to the implementation of the GATT Tokyo Round was
based precisely on the promise of having effective trade remedy
rulesthat is, in exchange for allowing foreign trade competition. Busi-
ness accepted more competition provided it was fair.85 The appellate
bodys restraints on United States trade remedy action constitute the
real problem, not for lack of a better understanding of the appellate
body. The WTO is illegitimate because it is (alleged) to be unfair,86 not
because people are ignorant about what it does.
For other non-governmental actors, the problem is the reverse. For
them, it is not that the WTO limits governmental acts that would other-
wise favour business interests, but that it limits governmental action that
tries to rein in the excesses of the free market. Such concerns about la-
bour and environmental standards were admittedly a part of what the
Seattle talks were about, but while some have focused on the lack of unity
amongst the Quad countries, the Clinton administrations lack of fast
track authority or its correspondingly limited ambitions in Seattle, and
the disaffection of developing countries as possible explanations,87 others
only cite NGO dissatisfaction as the cause of a crisis at the WTO.88 Few
trade negotiators think that the Seattle talks broke down because the
WTO lacks popular legitimacy. If anything, a well-known, veteran trade
negotiator has criticized some developing country delegations for playing
to the gallery in Cancun, instead of getting on with the task of the nego-
tiations.89
The argument that some of the WTOs difficulties are attributable to
an absence of transparency in the way it handles disputes is therefore
something of a stretch. Transparency is important but is unlikely to ad-
dress the WTOs legitimacy crisis. Professor William Davey, who also fa-
85 Robert E Hudec, Essays on the Nature of International Trade Law (London: Cameron
May, 1999) at 236.
86 Ibid at 227-50 (arguing against the incoherence of such a standard of fairness in the
first place).
87 Jeffrey J Schott, The WTO after Seattle in Schott, ed, supra note 18, 3 at 5-8.
88 Joseph Stiglitz, Globalization and its Discontents (London: Penguin, 2003), 3-4, 227-28
[Stiglitz, Discontents].
89 Margaret Liang, The Realpolitik of Multilateral Trade Negotiations from Uruguay to
the Doha Round, Note, (2004) 8 SYBIL 149 at 152.
EAST ASIAS ENGAGEMENT WITH COSMOPOLITAN IDEALS 841
vours greater transparency in panel and appellate body hearings, pre-
sents one of the more careful and considered views:
I see no problems with having more openness … The problem of
pressure can be solved by closed-circuit TV, such that the audience
can see, but will not be seen … the reality is that some disputes draw
a great deal of attention. For these high-profile disputes, it is helpful
to the credibility of the WTO system at large for those who have an
interest in them to see how they are resolved.90
While arguing that given popular fears of globalization and the WTOs
connection therewith, such increased credibility can be viewed as essen-
tial to ensure the future effectiveness of the WTO itself, as well as the
dispute settlement system,91 Professor Davey admits to having no em-
pirical evidence to support this claim. In doing so, he comes closer than
most writers to asking whether legitimacy and transparency are con-
nected. The Indian delegation has pointed out that such a connection does
not exist.92 Daveys point is a far more modest one: [O]penness of this sort
would [at least] eliminate an argument that has been effectively used in
US newspapers,namely, the reference in full-page advertisements in
US newspapers to dispute settlement as involving faceless GATT bureau-
crats and star chamber proceedings could no longer be made.93 His ex-
planation accepts the transparency argument for what it is: a plea for bet-
ter public relations. But however well-considered, smart, and apt Daveys
argument is, it may have less to do with the legitimacy crisis as such.
At the other extreme, Joseph Stiglitz is less concerned with transpar-
ency than with reform. According to Stiglitz, the WTOs legitimacy crisis
requires a concerted response to environmental and labour concerns.
Transparency is a means by which popular opinion may then be brought
to bear on panellists and appellate body members.94 The danger in this
view is that it comes down to a prescription for panellists and appellate
body members to decide trade disputes in light of those values which re-
ceive the loudest expression, and it is difficult to see how that could be
more democratic.
In sum, the transparency argument is ultimately too little or too
much, depending on the version one favours. Calling for more transpar-
90 Davey, Reforming WTO, supra note 60 at 136.
91 Ibid at 136, n 129.
92 WTO, Dispute Settlement Body, Minutes of Meeting (held 15 July 2002), WTO Doc
TN/DS/M/3, Special sess, at para 59, online: WTO
of the Indian delegation), cited in Davey, Reforming WTO, supra note 60 at 136, n
129.
93 Ibid.
94 Stiglitz, Discontents, supra note 88 at 227-28.
842 (2011) 56:4 MCGILL LAW JOURNAL ~ REVUE DE DROIT DE MCGILL
ency amounts to saying that the WTO needs better public relations, or
that it needs wholesale reform anyway, particularly in the way the link-
ages are drawn between trade and environmental concerns, or trade and
labour concerns.95
E. The Need to Pursue Democratically Coherent Trade Policies
Many of these arguments are about the WTO, but they also apply to
RTAs, either because some RTA dispute systems are modelled after the
WTO or because the arguments themselves apply to RTAs by analogy.
The democracy argument reflects an ideal to which all trade policy deci-
sion making should aspire. Connected with these arguments for greater
democracy and legitimacy is the argument that Mercurio and Laforgia
have adapted from Housman and applied to RTAs. Mercurio and Lafor-
gias central argument is that democratic nations like Australia should
pursue accountable and participatory RTA rules for the likely impact of
such a policy in Southeast Asia and the wider Asia-Pacific region.96 Per-
haps this is true, but insofar as Mercurio and Laforgia are suggesting that
Australia would, or could, successfully effect a shift from a preference for
closed trade dispute settlement towards a preference for open trade dis-
putes, the evidence thus far goes plainly against it.
In the next part, we will look to the actual treaty behaviour of Asian
members, including those who have actively resisted the United States
and EC proposals at the WTO.97
II. Settling East Asian Trade Disputes
A. Asia and the International Settlement of Disputes
Resort to international adjudication had a slow start in Asia, with the
notable exception of India. Some of the reasons for Asian conservatism are
historic. Nations that are still adapting to the use of formal third party
dispute settlement, unlike other high-end and sophisticated users, are
simply less likely to innovate and adopt progressive policies. As for the
95 See Jos E Alvarez, Symposium: The Boundaries of the WTO, Foreword, (2002) 96
Am J Intl L 1. See also the various symposium papers published in (2002) 96 Am J Intl
L.
96 Mercurio & Laforgia, supra note 11 at 512-14.
97 Hong Kong, Japan, Philippines, Malaysia, Singapore, Thailand, India, and Pakistan
have also featured prominently in resisting unsolicited amici briefs, with Singapore of-
ten speaking for ASEAN as a whole. See Lim, Asian WTO Members, supra note 57.
EAST ASIAS ENGAGEMENT WITH COSMOPOLITAN IDEALS 843
Peoples Republic of China, Korea, and Japan, none has ever brought a
case before the International Court of Justice (ICJ).
A more encouraging picture in recent years has been the willingness of
Indonesia, Malaysia, and Singapore to bring various territorial disputes
before the ICJ, including the Indonesia-Malaysia dispute over the islands
of Sipadan and Ligitan,98 and the Malaysia-Singapore dispute over Pedra
Branca/Pulau Batu Puteh.99 The latter had been preceded by another Ma-
laysia-Singapore dispute brought before the International Tribunal for
the Law of the Sea (ITLOS).100 Before that, the last Southeast Asian case
that had appeared before the ICJ involved a 1962 territorial dispute be-
tween Cambodia and Thailand.101
South Asia, unlike the Northeast and Southeast Asian sub-regions,
has produced one case between Portugal and India,102 and three conten-
tious cases between Pakistan and India103 In none of these cases, either in
East or South Asia, was the underlying dispute economic in nature.
In contrast, WTO dispute settlement has been a resounding success in
Asia. Japan, India, South Korea, and China have been active participants
in WTO disputes. The first case ever brought before the WTO involved a
dispute between Singapore and Malaysia.104 With the experience of Ja-
pan,105 India, South Korea,106 and with Chinas recent spate of cases,107 the
98 See JG Merrills, Sovereignty over Pulau Ligatan and Pulau Sipadan (Indonesia v Ma-
laysia): The Philippines Intervention (2003) 51 Intl & Comp LQ 718.
99 Case Concerning Sovereignty over Pedra Branca/Pulau Batu Puteh, Middle Rocks and
South Ledge (Malaysia v Singapore), [2008] ICJ Rep 12.
100 Case Concerning Land Reclamation by Singapore in and Around the Straits of Johor
(Malaysia v Singapore), [2005] Reports of International Arbitral Awards 133 (Interna-
tional Tribunal for the Law of the Sea). See also CL Lim, The Uses of Pacific Settle-
ment Techniques in Malaysia-Singapore Relations (2005) 6 Melb J Intl L 313.
101 Case Concerning the Temple of Preah Vihear (Cambodia v Thailand), [1962] ICJ Rep 6.
102 Case Concerning Right of Passage over Indian Territory (Portugal v India), [1960] ICJ
Rep 6.
103 Case Concerning the Aerial Incident of 10 August 1999 (Pakistan v India), [2000] ICJ
Rep 12; Case Concerning Trial of Pakistani Prisoners of War (Pakistan v India), [1973]
ICJ Rep 347; Appeal Relating to the Jurisdiction of the ICAO Council (India v Paki-
stan), [1972] ICJ Rep 46.
104 The dispute was eventually settled; see WTO, MalaysiaProhibition of Imports of
(1995), online: WTO
Polyethylene and Polypropylene, WTO Doc WT/DS1/1
105 See Iida, supra note 43; Ichiro Araki, Beyond Aggressive Legalism: Japan and the
GATT/WTO Dispute in Mitsuo Matsushita & Dukgeun Ahn, eds, WTO and East Asia:
New Perspectives (London: Cameron May, 2004) 149; Saadia M Pekkanen, Interna-
tional Law, the WTO, and the Japanese State: Assessment and Implications of the New
Legalized System (2001) 27:1 Journal of Japanese Studies 79.
844 (2011) 56:4 MCGILL LAW JOURNAL ~ REVUE DE DROIT DE MCGILL
WTO has unarguably contributed to the reception of formalized dispute
settlement in international affairs in Asia. Prior to the establishment of
the WTO in 1995, the East Asian nations showed little interest in GATT
dispute settlement, Japan being the one notable exception.108 By mid-
2006, however, Korea had emerged as the most active East Asian com-
plainant with thirteen cases, compared to twelve each for Japan and Thai-
land during that period,109 and by late 2007, India had become the worlds
second most frequent developing country complainant after Brazil.110 A
notable feature in the last three years has been the sudden spate of cases
involving China (both as complainant and respondent) with new disputes
constantly emerging.111
At the same time, the sheer amount of RTA activity in Asia in recent
years has required the greater familiarization of these East Asian nations
106 See e.g. Chulsu Kim, East Asia in the WTO Dispute Settlement Mechanism in Yasu-
hei Taniguchi, Alan Yanovich & Jan Bohanes, eds, The WTO in the Twenty-First Cen-
tury: Dispute Settlement, Negotiations, and Regionalism in Asia (Cambridge: Cam-
bridge University Press, 2007) 261 at 261-66.
107 Henry Gao, Taming the Dragon: Chinas Experience in the WTO Dispute Settlement
System (2007) 34:4 LIEI 369; Tina Wang, Chinas Coming of Age in the WTO War,
Forbes (20 April 2009) online: Forbes
of Age].
108 Kim, supra note 106 at 261.
109 Ibid at 262.
110 Peter Van den Bossche, The Law and Policy of the World Trade Organization, 2d ed
(Cambridge: Cambridge University Press, 2008) at 231.
111 See Wang, Chinas Coming of Age, supra note 107; Denise Tsang, Beijing Hits Back
at Trade Partners on Protectionism; WTO Asked to Act on US Curbs on Chinese Poul-
try Imports, South China Morning Post [Hong Kong] (25 June 2009) online: Global
Factiva
Steel Pipes, South China Morning Post [Hong Kong] (11 September 2009) online:
Global Factiva
Tyre Move, South China Morning Post [Hong Kong] (14 September 2009) online:
Global Factiva
Economist (19 September 2009) online: LexisNexis
dan McGivern Chinese Import Restrictions on Publications and Entertainment Prod-
ucts Found to be WTO Inconsistent, ASIL Insights 13:19 (27 October 2009) online:
American Society of International Law
Disputes Round-Up, Bridges Weekly Trade News Digest 14:1 (13 January 2010) 3,
online: International Centre for Trade and Sustainable Development Periodicals
Bridges Weekly Trade Digest 14:5 (10 February 2010) 7, online: International Centre for
Trade and Sustainable Development Periodicals
WTO Case to Bring Down Chinese Internet Firewall, Bridges Weekly Trade Digest 14:3
(27 January 2010) 3, online: International Centre for Trade and Sustainable Develop-
ment Periodicals
Shoe Dispute, Bridges Weekly Trade Digest 14:5 (10 February 2010) 8, online: Interna-
tional Centre for Trade and Sustainable Development Periodicals
EAST ASIAS ENGAGEMENT WITH COSMOPOLITAN IDEALS 845
with the design of formal dispute settlement systems for their bilateral
and regional trade treaty regimes. Yet as one commentator points out:
While East Asian countries have been involved in a substantial
number of disputes in the WTO … [they] still cling to their non-
litigious tradition of the past. This is evidenced by the increasing
tendency to participate as co-complainants or third parties and the
substantial number of disputes being resolved through consulta-
tions. In addition, the lack of expertise in WTO law, as well as the
substantial legal costs … appear to be major obstacles … particularly
for developing-country Members.112
Similarly, East Asian nations participating in the Geneva debate on
reforming the WTO Dispute Settlement Understanding have tended to
avoid proposals on systemic issues. Japan and Korea, for example, have
focused on the so-called sequencing issue,113 China has issued a proposal
on increasing third party participation, while Malaysia has a proposal on
the costs of litigation for developing countries.114
Such conservatism is reflected in the RTA treaty behaviour of these
nations. By and large, they have chosen to adapt from the existing WTO
dispute settlement system, sometimes wholesale. This clearly does not
mean that current attempts by the European Union and the United
States to make the WTO dispute system more transparent will be sup-
ported by the East Asian nations. Indeed, the contrary is true. We have
seen that while Japan did support the call to make party submissions
public, Malaysia and Taiwan have objected to the United States-European
Union proposal. As for the unsolicited submission of amici curiae briefs by
NGOs to panels and the appellate body, Hong Kong, Malaysia, China, Ja-
pan, the Philippines, Singapore, and ASEAN as a whole have consistently
objected to panel and appellate body acceptance of such briefs.115
112 Kim, supra note 106 at 264.
113 This issue concerns the need to await the conclusion of non-compliance hearings before
engaging in unilateral retaliation.
114 Kim, supra note 106 at 264.
115 WTO, Dispute Settlement Body, Minutes of Meetings (held on 6 November 1998), WTO
Doc WT/DSB/M/50, online: WTO
Japan at 16, Malaysia at 6, and Thailand at 2-3); WTO, Dispute Settlement Body, Min-
utes of Meetings (held on 7 June 2000), WTO Doc WT/DSB/M/83, online: WTO
paras 19-20, Malaysia at para 23, and Thailand at para 27); WTO, General Council,
Minutes of Meeting (held on 22 November 2000), WTO Doc WT/GC/M/60, online: WTO
ASEAN members at paras 59-61). See Lim, Asian WTO Members, supra note 57; Lim,
The Amicus Brief, supra note 51.
846 (2011) 56:4 MCGILL LAW JOURNAL ~ REVUE DE DROIT DE MCGILL
In the next section, we will see that the design of bilateral FTAs be-
tween individual East Asian nations and countries such as the United
States is another matter altogether. In such cases, the individual East
Asian nation is more likely to accept an American treaty template, for ex-
ample, when negotiating with the United States. We will see that in cases
where East Asian nations such as Brunei and Singapore have partici-
pated in the design of regional FTAs that (as with the Trans-Pacific Stra-
tegic Partnership Agreement) have not only potential regional adherence,
but also a potential trans-continental reach. The conservative intra-East
Asian model has been laid aside in favour of a more cosmopolitan treaty
model.
1. Studying East Asias Regional Trade Treaties
The treaties surveyed in this paper have been carefully chosen to re-
flect regional, as opposed to bilateral, treaty behaviour. What we are look-
ing for is convergence in regional (that is, region-wide) treaty behaviour
and, currently, no single East Asian nation is able to significantly influ-
ence or dictate FTA treaty design within the region, or is likely to be able
to do so in the future. Individual bilateral treaties concluded by any indi-
vidual East Asian nation, to the extent that they even exhibit any high
degree of design consistency, are not likely to provide much indication of
region-wide behaviour.116
In Southeast Asia, countries like Singapore, Malaysia, and Thailand,
and to a lesser extent Brunei, have concluded various bilateral treaties
with both regional and extra-regional trading partners, most famously in
the case of Singapore, which has the most extensive network of bilateral
FTAs in the region.117 Likewise, Japans policy-makers concluded that it
116 There are often significant differences even when we compare the FTAs of a single East
Asian nation. For example, Chinas FTA with ASEAN is currently not as comprehen-
sive as its FTAs with Singapore, New Zealand, and Chile. See Jiangyu Wang, The Role
of China and India in Asian Regionalism in Muthucumaraswamy Sornarajah & Jian-
gyu Wang, eds, China, India and the International Economic Order (Cambridge: Cam-
bridge University Press, 2010) 333 at 352-56. Another example would be Singapores
FTAs. Even when we compare Singapores purely bilateral FTAs, there are significant
differences in structure and design. Singapores FTAs with Australia and the United
States adopt a negative list approach in its services commitments, while its FTAs with
New Zealand and Japan do not. There is no Singapore template as such. See Ong Ye
Kung, An Intuitive Guide to the Services Chapter of the US-Singapore Free Trade
Agreement in CL Lim & Margaret Liang, eds, Economic Diplomacy: Essays and Reflec-
tions by Singapores Negotiators (Singapore: Institute of Policy Studies, 2010) 169 at
172.
117 As of June 2010, Singapore had concluded bilateral FTAs with Australia, China, the
Hashemite Kingdom of Jordan, India, Korea, Japan, New Zealand, Panama, Peru, the
United States, and Costa Rica, in addition to its FTAs as an ASEAN Member, the
EAST ASIAS ENGAGEMENT WITH COSMOPOLITAN IDEALS 847
should not simply complete a deal with the whole of ASEAN; it proceeded
to conclude FTAs with Indonesia, Singapore, Malaysia, the Philippines,
Thailand, Brunei, and Vietnam within Southeast Asia, before concluding
the larger Japan-ASEAN deal.118 Japan had observed how China, which
had imagined that it would have to negotiate with one entity, ASEAN,
had ended up in ten separate bilateral negotiations from the outset. In
addition, Japan negotiated FTAs with extra-regional partners. Like Ja-
pan, Korea also adopted a simultaneous bilateral FTA policy,119 and en-
gaged in a host of bilateral treaties worldwide, including bilateral agree-
ments with individual ASEAN nations, while concluding the FTA with
ASEAN as a whole.
Yet in none of these cases do we see an East Asian model emerge from
the specific behaviour of any East Asian nation. This may also have to do
with the fact that, to date, China, Japan, and Korea have not yet been
able to conclude a deal between themselves and have instead focused
their efforts during the past ten years on concluding their respective trade
treaties with ASEAN instead. That is what makes ASEAN, which has
also concluded an FTA with China, Korea, and Japan, and an FTA with
Australia and New Zealand, and its closed model of dispute settlement so
central to any serious study of the regional treaty behaviour of the East
Asian nations.
Turning from bilateral to regional deals, the Southeast Asian nations
were the first to develop a sub-regional treaty (that is, under a closed
model) that the Peoples Republic of China was content to adopt in its
FTA with ASEAN.120 The China-ASEAN FTA is now the largest regional
FTA in East Asia. The existence of a China-ASEAN trade treaty spurred
Japan and Korea to complete FTAs with ASEAN. Both these treaties also
employed the ASEAN model and there are many similarities in the nego-
tiation and design of the China-ASEAN, Korea-ASEAN, and Japan-
ASEAN treaties.121 Convergence between the China-ASEAN, Japan-
Trans-Pacific Strategic Economic Partnership Agreement, (with Brunei, New Zealand,
and Chile) and FTAs with other regional trading areas such as the European Free
Trade Area and the Gulf Cooperation Council. See Lim & Liang, supra note 116, An-
nex, 293-95.
118 For the origins of this policy, see Hatakeyama Noboru, A Short History of Japans
Movement to FTAs (Part 3) (2003) 22 Journal of Japanese Trade & Industry 42.
119 Dukgeun Ahn, Koreas FTA Policy in The New International Architecture in Trade &
Investment: Current Status and Implications (Singapore: APEC, 2007) 49, online:
APEC
120 See further, David Chin, ASEANs Journey towards Free Trade in Lim & Liang, su-
pra note 116 at 209.
121 Ibid.
848 (2011) 56:4 MCGILL LAW JOURNAL ~ REVUE DE DROIT DE MCGILL
ASEAN, and Korea-ASEAN FTAs is what makes it possible to say that
there is now an emerging intra-East Asian model.
A notable divergence from this emerging regional model is that pro-
vided under the dispute settlement provisions of the Trans-Pacific Strate-
gic Economic Partnership Agreement.122 It is for this reason that we have
chosen to focus on a comparison between this treaty and the ASEAN,
China-ASEAN, Japan-ASEAN, and Korea-ASEAN treaties.
Finally, as we are solely concerned with East Asian inter-state trade
dispute settlement,123 we will leave aside investor-state dispute settle-
ment provisions under existing East Asian treaties.124
122 For the reasons given earlier, divergences from the East Asian model in individual, bi-
lateral FTAs are not as significant from a regional viewpoint. The significance of such
bilaterals is further reduced where they proceed from an extra-regional template,
such as in the case of US FTAs. Thus, the US-Singapore FTA has uncharacteristic pro-
visions that are the result of a US, as opposed to a Singapore, FTA template. Accord-
ing to the dispute provisions of the US-Singapore FTA, public consultations follow a re-
quest for consultations made by either of the two parties. There is also provision for the
submission of unsolicited amici curiae briefs by NGOs in relation to disputes occurring
under the US-Singapore FTA. Interestingly, Singapores late counsel for the US-
Singapore FTA negotiations had described these provisions in his recollections of the
negotiations in functional, not cosmopolitan, terms: The idea is to take into account the
views of all those affected and draw upon a broad range of perspectives in arriving at a
solution. See Sivakant Tiwari, The Role of Legal Counsel and Dispute Settlement in
Tommy Koh & Chang Li Lin, eds, The United States-Singapore Free Trade Agreement:
Highlights and Insights (Singapore: Institute of Policy Studies, 2004) 151. This con-
trasts with the US Chief Negotiators published recollections of the negotiations which
highlights the importance given to [e]nhanced transparency in the negotiations:
Ralph F Ives, The USSFTA: Personal Perspectives on the Process and Results in ibid,
123, 23 at 28.Transparency provisions will also likely be a negotiating issue in East
Asian nations bilateral FTAs with the European Union as the latter begins to negotiate
more FTAs with the East Asian nations. Until recently, the European Union had been
slow to engage East Asia in its FTA negotiations but, at the time of writing, this situa-
tion is swiftly changing as the European Union competes with the United States in the
East Asian region.
123 Notwithstanding the provision for investor-state dispute settlement within AFTA (i.e.,
ASEANs 1987 Agreement on the Promotion and Protection of Investment), the Korea-
ASEAN FTAs Investment Agreement, and Chapter 11 of the AANZFTA, there is little
that can usefully be said at the present time about confidentiality in the case of inves-
tor-state disputes under these treaty regimes. Unlike the corresponding provisions on
inter-state trade dispute settlement, the investment treaties themselves are largely si-
lent on the issue. Much will depend on the applicable arbitration rules, and it remains
to be seen whether the decisions emanating from NAFTA supporting greater transpar-
ency in investor-state proceedings will be applied to East Asian and Australasian inves-
tor-state disputes. Taking the Korea-ASEAN FTAs Investment Agreement as an ex-
ample, the investor may choose from ICSID Arbitration (including arbitration under
the ICSID Additional Facility Rules), arbitration under UNCITRAL arbitration rules or
any other arbitration or any other arbitration rules. The treaty is otherwise silent on
the issue of confidentiality. See Agreement on Investment under the Framework Agree-
EAST ASIAS ENGAGEMENT WITH COSMOPOLITAN IDEALS 849
B. ASEAN
Much has been written about Southeast Asias preference for diplo-
matic settlement according to the so-called ASEAN Way (that is, via
consultation and consensus, as opposed to legal settlement). However, fol-
lowing the creation of the ASEAN Free Trade Area (AFTA) in 1991 and
its relaunch in 1994, ASEAN moved towards having a dispute settle-
ment system. The result was ASEANs Protocol on the Dispute Settle-
ment Mechanism of 1996.125 The most important shift in thinking was the
authority given to ASEANs meeting of Senior Economic Officials (ASEAN
SEOM) to issue final and legally binding rulings by majority vote.126 The
1996 Protocol was eventually superseded by the Protocol on Enhanced
Dispute Settlement Mechanism of 2004 (2004 Protocol). The latter was
ment on Comprehensive Economic Cooperation among the Governments of the Member
Countries of the Association of Southeast Asian Nations and the Republic of Korea, 24
August 2006 (entered into force June 2007), online: International Enterprise Singapore
124 While discussing investor-state disputes in the context of internationalized contracts,
some commentators have, however, suggested that a party may in such circumstances
reveal its own case or the existence of the dispute without the consent of the other
party. See Nigel Rawding, Protecting Investments under State Contracts: Some Legal
and Ethical Issues (1995) 11:4 Arb Intl 341 at 343. In ICSID Arbitration under
NAFTA Chapter 11, there have been tribunal pronouncements in favour of the freedom
of the parties to make information regarding the arbitration publicly available, and also
the suggestion that confidentiality would be undesirable. See Cindy G Buys, The Ten-
sions Between Confidentiality and Transparency in International Arbitration (2003)
14 Am Rev Intl Arb 121 at 132-33; Jeffery Atik, Legitimacy, Transparency and NGO
Participation in the NAFTA Chapter 11 Process in Todd Weiler, ed, NAFTA Invest-
ment Law and Arbitration: Past Issues, Current Practice, Future Prospects (Ardsley,
NY: Transnational Publishers, 2004) 135 at 148, n 34; SD Myers Inc v Canada (2002),
126 ILR 161 (NAFTA Arbitration Tribunal); The Loewen Group, Inc v United States of
America, Case No ARB(AF)/98/3 (2003), 7 ICSID 421 at para 25 (International Centre
for Settlement of Investment Disputes). NAFTA parties have also confirmed that
[n]othing in NAFTA imposes a general duty of confidentiality; Notes of Interpreta-
tion of Certain Chapter 11 Provisions [NAFTA Free Trade Commission, July 31, 2001]
in Charles H Brower II, Jack J Coe Jr & William S Dodge, eds, NAFTA Chapter Eleven
Reports, Primary Materials, vol 1 (The Hague: Kluwer Law International, 2006) 138 at
para A(1). Under the Permanent Court of Arbitrations rules, which are based largely
on the UNCITRAL Arbitration Rules, confidentiality is generally a matter for parties to
agree upon. However, a presumption lies in favour of confidentiality; hearings are held
in camera, unless the parties agree otherwise under article 25(4), whereas under article
32(5) the award may only be made public with the parties consent; PCA Optional
Rules for Arbitrating Disputes between Two States, online: Permanent Court of Arbi-
tration
125 ASEAN Protocol on Dispute Settlement Mechanism, 20 November 1996 (entered into
force 26 May 1998), online: ASEAN
126 See Paul J Davidson, The ASEAN Way and the Role of Law in ASEAN Economic Co-
operation (2004) 8 SYBIL 165 at 173.
850 (2011) 56:4 MCGILL LAW JOURNAL ~ REVUE DE DROIT DE MCGILL
part of a series of reforms designed to take ASEAN closer to the aim of
having an ASEAN Economic Community.127
Mirroring the WTO DSS, the 2004 Protocol adopts the WTOs nega-
tive consensus procedure. A panel shall be established, and its report
(and in the case of appeals, the report of the ASEAN appellate body) shall
be adopted unless the SEOM decides by consensus not to do so. Similarly,
authorization for the suspension of concessions in case of non-compliance
shall be given unless the SEOM decides by consensus not to do so.128 As in
the case of the WTO, the provisions in the Protocol governing ASEANs
panel and appellate body procedures are preceded by provision for consul-
tations,129 good offices, conciliation, and mediation.130 In short, the 2004
Protocol created a regional version of the WTO dispute settlement system.
Under articles 8 and 12 of the 2004 Protocol, ASEAN panel and appel-
late body deliberations shall be confidential, and reports shall be drafted
in the absence of the parties.131 Article 13(2) provides that while parties
written submissions, too, shall be confidential, a party may publicly dis-
close its own position. Members shall treat as confidential information
submitted by another member to the panel or to the appellate body where
the information has been designated so. Upon the request of a member,
however, a non-confidential summary shall be provided to the requesting
member for public disclosure.132
The 2004 Protocol expressly states that the the interests of full trans-
parency under this ASEAN framework simply means that presenta-
tions, rebuttals and statements … shall be made in the presence of [only]
the parties.133 This is clearly a far cry from the democratic view of what
transparency should mean in trade dispute settlement (discussed in Part
I, above).
127 ASEAN Protocol on Enhanced Dispute Settlement Mechanism, 29 November 2004 (en-
tered into force 29 November 2004), online: ASEAN
Protocol].
128 Ibid, arts 5(1), 9(1), 12(13), 16(6).
129 Ibid, art 3.
130 Ibid, art 4.
131 Ibid, arts 8(5), 12(9) and App II, s II, para 2.
132 See also ibid, App II, s II, para 3. The drafting language is unclear. What is the distinc-
tion between written submissions, which must be disclosed to the other party but are
otherwise automatically to be treated as confidential, and the rule that Member
States shall treat as confidential information submitted by another Member State
that has been designated as such? The better interpretation may be that a party should
always mark its written submissions confidential.
133 Ibid, App II, s II, para 11.
EAST ASIAS ENGAGEMENT WITH COSMOPOLITAN IDEALS 851
needs, including its trade dispute settlement requirements.
Instead, ASEAN adopts a closed model for all its dispute settlement
C. Trade Dispute Settlement in ASEANs Agreements with China, Korea,
Japan, Australia, and New Zealand
1.
Introduction
The emergence of the 2004 ASEAN protocol coincided with the prolif-
eration of East Asian RTAs.134 It was a period during which various pro-
posals for East Asian economic integration were also heard, including
proposals for an agreement between ASEAN, China, Japan, and South
Korea, and possibly extending to the inclusion of Australia, New Zealand,
and India as well. In addition, there have been proposals for an agree-
ment between the twenty-one members of APEC,135 and a wider proposal
by Australias erstwhile Rudd administration to have the twenty-one
APEC economies and India within a single Asia Pacific Community.136
Together with the individual, mainly bilateral, RTAs recently concluded
or pursued by China, Korea, Japan, Australia, New Zealand, and virtually
all the individual ASEAN countries, these larger initiatives form part of a
complex network of intra-regional and extra-regional, transcontinental
RTAs, which aim to connect the East Asian and Asia-Pacific economies to
each other, as well as to East Asias trading partners in other continents.
The first major step towards a broader, regionalas opposed to a
purely bilateral model was the China-ASEAN FTA. There had been an
earlier proposal for China-Japan-Korea-ASEAN economic integration, but
failing consensus at the ASEAN Economic Ministers Meeting (AEM) in
Chiangmai in October 2000, the Chair had proposed separate RTAs be-
134 See Barry Desker, In Defence of FTAs: From Purity to Pragmatism in East Asia
(2004) 17:1 The Pacific Review 3.
135 [W]hile affirming our commitments to the Bogor Goals and the successful conclusion of
the WTO/DDA negotiations, we instructed Officials to undertake further studies on
ways and means to promote regional economic integration, including a Free Trade Area
of the Asia-Pacific as a long-term prospect, and report to the 2007 APEC Economic
Leaders Meeting in Australia (APEC Economic Leaders, Ha Noi Declaration, 14th
Meeting (held on 18-19 November 2006), Doc No 2006/AELM/DEC, 1-2, online: Asia-
Pacific Economic Cooperation Meeting Document Database
136 Rudd Pushes for Asia-Pacific Community, The [Melbourne] Age (4 June 2008) online:
The Age
the Asia Pacific, The Jakarta Post (11 June 2008) online: Jakarta Post
Community, The Hindu (12 August 2008) online: The Hindu
See further, CL Lim Australias Rudd Proposal: Business as Usual (2008) 14 Asian
YB Intl L 287.
852 (2011) 56:4 MCGILL LAW JOURNAL ~ REVUE DE DROIT DE MCGILL
tween ASEAN and China, ASEAN and Japan, as well as ASEAN and Ko-
rea. Between 2001 and 2009, ASEAN accordingly began concluding RTAs
with China (the China-ASEAN FTA), Korea (the Korea-ASEAN FTA),
Japan (Japan-ASEAN), India (AIFTA), and with Australia and New Zea-
land (AANZFTA).137 In each case, the dispute settlement provisions pro-
vide for the submission of inter-state disputes to arbitration.138
2. Closed Proceedings and Confidential Submissions in Trade Disputes
A closed dispute settlement model akin to ASEANs 2004 Protocol
was adopted in ASEANs FTAs with China, Korea, Japan, Australia, and
New Zealand. All these treaties contain explicit rules requiring closed
proceedings and the confidentiality of written submissions. These rules
are substantially similar to those adopted in the 2004 ASEAN Protocol.139
3. Arbitrators Confidentiality Obligation
There is an even closer resemblance between the China-ASEAN FTA,
Korea-ASEAN FTA, Japan-ASEAN FTA, and AANZFTA. Unlike
ASEANs 2004 Protocol, ASEANs agreements with these nations provide
for an arbitration tribunal. Nonetheless, there remain subtle differences
137 See Chin, supra note 120.
138 Investor-state arbitration is also provided for under AFTA, the Korea-ASEAN FTAs
Investment Agreement, and the AANZFTA. See further Agreement among the Govern-
ments of Brunei Darussalam, the Republic of Indonesia, Malaysia, the Republic of the
Philippines, the Republic of Singapore and the Kingdom of Thailand for the Promotion
and Protection of Investments, 15 December 1987, art X, online: ASEAN
of Brunei Darussalam, the Republic of Indonesia, Malaysia, the Republic of the Philip-
pines, the Republic of Singapore, and the Kingdom of Thailand for the Promotion and
Investments, 12 September 1996, art 5, online: ASEAN
Protection of
Comprehensive Economic Cooperation Among the Governments of the Member Coun-
tries of the Association of Southeast Asian Nations and the Republic of Korea, 2 June
2009, art 18, online: ASEAN
20. In the case of the Agreement for the Promotion and Protection of Investments, 1987,
the investor-state dispute settlement clause is infelicitously worded, but the intent
seems clear enough. See further M Sornarajah & Rajenthran Arumugam, An Over-
view of the Foreign Direct Investment Jurisprudence in Denis Hew, ed, Brick by Brick:
The Building of an ASEAN Economic Community (Singapore: ISEAS, 2007) 144.
139 China-ASEAN DSA, supra note 5, arts 9(1), 9(4); Agreement on Dispute Settlement
Mechanism Under the Framework Agreement on Comprehensive Economic Cooperation
Among the Governments of the Member Countries of the Association of Southeast Asian
Nations and the Republic of Korea, 13 December 2005, art 10(3) and Annex, art 21,
online: ASEAN
supra note 7, arts 68(8), 68(10), 68(11); AANZFTA, supra note 8, arts 13(6), 13(10), and
c 7, Annex at para 21.
EAST ASIAS ENGAGEMENT WITH COSMOPOLITAN IDEALS 853
even between these latter treaties. For example, the China-ASEAN FTA
and the Japan-ASEAN FTA are silent where the Korea-ASEAN FTA and
the AANZFTA expressly impose an obligation of confidentiality upon the
members of the arbitral panel and the persons retained by the arbitral
panel, permitting only the disclosure of information that is already in the
public domain.140
While arbitrators are generally bound by an ethical duty to maintain
confidentiality notwithstanding the China-ASEAN FTAs and the Japan-
ASEAN FTAs silence,141 it is noteworthy that the Korea-ASEAN FTA and
AANZFTA chose to make this a matter of express treaty obligation and to
extend that treaty obligation to persons retained by the arbitral panel.
4. Rules Governing the Presence of Parties and Third Parties
ASEANs trade deals with China, Korea, Japan, and with Australia
and New Zealand also statein somewhat curious languagethat the
parties are allowed to be present only when invited to do so by the tribu-
nal.142 This drafting language is derived from the ASEAN 2004 Protocols
Panel Working Procedures.143 With the exception of the China-ASEAN
Dispute Settlement Agreement, each treaty also makes express provision
for third parties to be heard.144 However, while the Japan-ASEAN and
Korea-ASEAN FTAs envisage a session being set aside during the first
meeting for this purpose, and also provide explicitly for the presence of
third parties during the entirety of this session, the AANZFTA only
states that third parties shall have an opportunity to be heard by the ar-
bitral tribunal at its first substantive meeting with the Parties to the dis-
pute.145
140 See Korea-ASEAN DSA, supra note 139, Annex at para 11. The rule that what is al-
ready in the public domain cannot by definition be confidential or secret is self-
explanatory. It can hardly be a secret that the Sun rises in the East, for example. See
also AANZFTA, supra note 8 at c 7, Annex at para 11 for similar provisions.
141 See Buys, supra note 124 at 124, n 8; American Arbitration Association & American
Bar Association, Code of Ethics for Arbitrators in Commercial Disputes, canon VI B,
online: American Bar Association
cedure for Arbitration Proceedings (Washington, DC: ICSID, 2003), 106-107, r 6.
142 China-ASEAN DSA, supra note 5, art 9(1); Korea-ASEAN DSA, supra note 139, art
10(3); Japan-ASEAN FTA, supra note 7, art 68(8); AANZFTA, supra note 8, c 17, art
13.
143 2004 Protocol, supra note 127, App II, s II, para 2.
144 Japan-ASEAN FTA, supra note 7, art 68(9); Korea-ASEAN DSA, supra note 139 Annex
at para 16; AANZFTA, supra note 8, c 17, art 10.
145 Ibid, c 17, art 10(3).
854 (2011) 56:4 MCGILL LAW JOURNAL ~ REVUE DE DROIT DE MCGILL
The AANZFTAs more restrictive formulation seems to have been de-
rived from the ASEAN 2004 Protocols provision for third parties.146 None-
theless, any practical difference between the ASEAN 2004 Protocol and
AANZFTA, or between these and the Japan-ASEAN and Korea-ASEAN
FTAs, would be more apparent than real. Both the AANZFTA and the
ASEAN 2004 Protocol go on to provide for an entire session being set
aside for third parties in their respective tribunal and panel working pro-
cedures instead.147
5. Confidentiality of Tribunal Deliberations
ASEANs 2004 Protocol148 and ASEANs FTAs with China, Korea, and
Japan, as well as with Australia and New Zealand, state that a tribunals
internal deliberations shall be confidential.149
Notably, the AANZFTAs Annex and the Korea-ASEAN FTA contem-
plate the retention of assistants, interpreters, and translators,150 and
while only tribunal members may take part in the deliberations,151 such
deliberations shall be kept confidential by tribunal members as well as
persons retained by the tribunal.152 ASEANs 2004 Protocol, and ASEANs
FTAs with China, Korea, and Japan contain express language forbidding
the parties to be present during the drafting of the award.153
6. Keeping the Existence of a Dispute Confidential
The most noteworthy difference between the 2004 Protocol and the
China-ASEAN, Korea-ASEAN, and Japan-ASEAN FTAs lies in the fact
that the latter treaties require the final report of the arbitral panel to be
146 2004 Protocol, supra note 127, art 11(2) (third-parties shall have an opportunity to be
heard by the panel).
147 Ibid, App II, s II, para 6; AANZFTA, supra note 8, c 7, Annex at para 19.
148 2004 Protocol, supra note 127, App II, s II, para 3.
149 This is in addition to a provision requiring their tribunals to meet in closed session. See
China-ASEAN DSA, supra note 5, arts 9(4) and 9(6); Korea-ASEAN DSA, supra note
139, Annex at para 11; Japan-ASEAN FTA, supra note 7, art 68(10); AANZFTA, supra
note 8, c 7, Annex at para 11.
150 See e.g. ibid, c 7, Annex at para 10.
151 Ibid, c 7, Annex at para 9.
152 See ibid, c 7, Annex at para 11; Korea-ASEAN DSA, supra note 139, Annex at para 11.
153 2004 Protocol, supra note 127, art 8(5); China-ASEAN DSA, supra note 5, art 9(6);
Korea-ASEAN DSA, supra note 139, Annex at para 17; Japan-ASEAN FTA, supra note
7, art 69(1).
EAST ASIAS ENGAGEMENT WITH COSMOPOLITAN IDEALS 855
made publicly available within ten days of the report being presented to
the parties.154 AANZFTA contains a similar rule stating:
The arbitral tribunal shall provide its final report to all other Parties
seven days after the report is presented to the Parties to the dispute,
and at any time thereafter a Party to the dispute may make the re-
port publicly available subject to the protection of any confidential
information contained in the report.155
The significance of this is that, in principle, the very existence of a dispute
solely between ASEAN members could be kept secret, whereas a dispute
arising under ASEANs FTAs with China, Korea, and Japan, and under
the AANZFTA, must eventually be disclosed.
D. Enter the United States, and the Trans-Pacific Strategic Economic
Partnership Agreement
Future agreements with the United States, Canada, and the Euro-
pean Union could alter Asias emerging approach towards dispute settle-
ment. Individual agreements with the United States such as the US-
Singapore FTA,156 the US-Australia FTA,157 and the Korea-US FTA dem-
onstrate elements of, and adherence to, an open model.158 But despite de-
154 China-ASEAN DSA, supra note 5, art 9(9); Korea-ASEAN DSA, supra note 139, art
12(3); Japan-ASEAN FTA, supra note 7, art 69(9).
155 AANZFTA, supra note 8, c 17, art 13(16). AANZFTA also contains a further express
provision protecting all confidential information in the report (ibid).
156 US-Singapore FTA, supra note 3, art 20.4(4)(d)(i) (mandating open proceedings), art
20.4(d)(iii) (subject to the protection of confidential information, written responses to a
request or questions from the panel to be made public), and art 20.4(d)(iv) (providing a
clause for amici curiae briefs: [T]he panel shall consider requests from nongovernmen-
tal entities in the Parties territories to provide written views regarding the dispute that
may assist the panel in evaluating the submissions and arguments of the Parties). For
a comprehensive overview of the US-Singapore FTA, see Koh & Lin, supra note 122.
157 The United States-Australia Free Trade Agreement, 18 May 2004, arts 21.8(1)(a) and
21.8(1)(d) (entered into force 1 January 2005), online: Office of the United States Trade
Representative
ings under article 21.8(1)(a) and requires written party submissions, written versions of
the parties oral statements, and written responses to a request or questions from the
panel to be made public under article 21.8(1)(d), subject to the protection of confidential
information. For an overview of the US-Australia FTA, see Andrew D Mitchell, The
Australia-United States Free Trade Agreement in Ross Buckley, Vai Io Lo & Laurence
Boulle, eds, Challenges to Multilateral Trade: The Impact of Bilateral, Preferential and
Regional Agreements (Netherlands: Kluwer Law International, 2008) 115.
158 Korea-United States Free Trade Agreement, 30 June 2007, art 22.10(1)(b), online: Office
of the United States Trade Representative
ceedings subject to the protection of confidential information)[KORUS]; KORUS man-
dates open proceedings in article 22.10(1)(b) subject to the protection of confidential in-
formation. For an overview of KORUS, see Yong-Shik Lee, The Beginning of Economic
856 (2011) 56:4 MCGILL LAW JOURNAL ~ REVUE DE DROIT DE MCGILL
bate at the WTO, the intra-East Asian and Australasian RTAs have thus
far demonstrated a preference for closed dispute settlement.
So East Asia now has two coexisting models for trade dispute settle-
ment. Putting aside Singapore, Australia, and Koreas FTAs with the
United States, the Trans-Pacific SEP Agreement, which at the time of
writing received considerable press attention following the Obama ad-
ministrations support for its enlargement through the Trans-Pacific
Partnership talks,159 allows its parties to agree on alternative dispute pro-
cedures. Failing such special agreement, the general procedures in Annex
15.B of the Agreement apply. Annex 15.B prescribes a closed model for
panel proceedings unless the parties decide otherwise.160 Parties sub-
missions may be designated confidential, but this is without prejudice to
the disclosure of a partys own submissions.161
The Trans-Pacific SEP Agreement is at once more open and demon-
strates a degree of flexibility absent in the East Asian RTAs discussed
above. As a result, there are potentially two models of East Asian trade
dispute settlement at the present time. The first is a closed model for the
internal management of Northeast Asian, Southeast Asian, and Aus-
tralasian trade relations inter se. The other is a flexible, for export only
arrangement, which would permit (and is intended to attract) future ac-
cession by trans-Pacific and trans-continental RTA partners.
Thus, the region has not only chosen a closed model, it has developed
a dexterous mechanism for its future treaty engagements with non-
regional trading partners.
III. Analytical Limitations of the Cultural Explanation
Many if not most of the East Asian nations we have discussed have
continued to resist both cosmopolitics and its legal counterpartnamely,
legal rules that would support, even increase non-governmental participa-
tion in WTO dispute proceedings. For these, unless and until a WTO
member consents to increased public participation, the WTO system
should therefore remain a government-to-government organization.
Integration between East Asia and North America? The US-Korea FTA in Buckley,
Lo & Boulle, supra note 157, 125.
159 See e.g. Office of the United States Trade Representative, Press Release,USTR Ron
Kirk Comments on Trans-Pacific Partnership Talks (18 June 2010), online: USTR
160 TPA, supra note 9, Annex 15 B at para 21.
161 Ibid, Annex 15 B at para 27.
EAST ASIAS ENGAGEMENT WITH COSMOPOLITAN IDEALS 857
We have also seen in Part I above that criticisms of this view rely on
arguments about the nature and contemporary direction of the WTO; ar-
guments which are sought to be justified by appealing to democratic the-
ory, to the need to treat transparency as a prerequisite of legitimacy, and
to the need for policy coherence on the part of democratic nations entering
into FTA negotiations. In rough terms, these are anti-authoritarian ar-
guments. Against this view, recent writings on arbitration and alternative
dispute resolution (ADR) demonstrate a strong thread of culturally- and
philosophically-oriented scholarship celebrating Asian,162 Confucian,
Chinese, and other forms of cultural exceptionalism,163 and which are
sometimes inadvertently or otherwise reminiscent of the East Asian Val-
ues debate of the 1990s.164
But there is also another way of looking at the treaty behaviour of the
East Asian trading nations. We could simply take Asian treaty behaviour
as representations of longer-term policy commitments. In studying such
behaviour, we find an increasing acceptance of the importance of formal
legal institutions in international economic relations and predictable legal
rules. We also find a general rejection of cosmopolitics.165 While cultural
critiques provide some explanation for this rejection, they fall short of ex-
plaining East Asias ready adoption of third party settlement, at least
when it comes to trade disputes, and the regions broad acceptance of the
need for stable, predictable international legal rules. Culture has not
caused East Asian nations to reject liberal economic rights either. Grant-
ing foreign investors the right to bring investor-state disputes under an
RTA investment chapter runs against authoritarianism, and calls for se-
rious explanation if the cultural perspective is to be believed.
Treating an emergent East Asian approach as an expression of cul-
tural difference is therefore intellectually dissatisfying if such differences
162 See Joel Lee and Teh Hwee Hwee, eds, An Asian Perspective on Mediation (Singapore:
Academy, 2009).
163 Qi Zhang, Consultations within WTO Dispute Settlement: A Chinese Perspective (Bern:
Peter Lang, 2007). See also, Randall Peerenboom, Chinas Long March toward Rule of
Law (Cambridge: Cambridge University Press, 2002) (arguing that China is not transi-
tioning towards a liberal, democratic conception of the rule of law).
164 Joanne R Bauer and Daniel A Bell, eds, The East Asian Challenge for Human Rights
(Cambridge: Cambridge University Press, 1999); Daniel A Bell, East Meets West: Hu-
man Rights and Democracy in East Asia (Princeton, NJ: Princeton, 2000).
165 This conclusion is reinforced by Asian comparative legal scholarships distinction be-
tween the acceptance by some Asian nations of a thin (formalist), but not a thick
(liberal) conception of the rule of law in their internal constitutional arrangements. See
Randall Peerenboom, ed, Asian Discourses of Rule of Law: Theories and Implementation
of Rule of Law in Twelve Asian Countries, France and the United States (London:
Routledge, 2004).
858 (2011) 56:4 MCGILL LAW JOURNAL ~ REVUE DE DROIT DE MCGILL
are treated simply as unalterable cultural facts.166 Confucian metaphors
have made their way into trade scholarship,167 but that picture must be
measured empirically against modern developments in actual treaty be-
haviour. The recent flurry of scholarship on the emergence of Japanese168
and, more recently, Chinese aggressive legalism (that is, litigiousness)
speaks to this change.169 Aggressive legalism at the WTO on the part of
the East Asian nations and strong rule-based and formalized dispute set-
tlement mechanisms show that the East Asian nations are not averse to
cultural adaptation.
In ASEANs case, where liberal democratic and non-liberal democratic
nations interact closely, the acceptance of binding inter-state dispute set-
tlement mechanisms for the management of their economic and other re-
lations, albeit within a highly closed dispute settlement model, suggests
prior deliberation and pragmatic choice, not culture. While the choice cur-
rently lies in favour of a closed model of trade dispute settlement, what
underlies the acceptance of an increasing numberindeed, an entire
noodle bowlof formal RTA rules is a broader intention to develop and
complement export-oriented, investment-friendly economic strategies. As
the Jakarta Post in Indonesia has observed:
The real aim of ASEAN in establishing a free trade area and in
building an economic community of ten nations is … to enhance the
competitiveness of the entire community, and thereby its attractive-
ness as an investment destination, both from within and more im-
portantly from outside ASEAN.170
This reflects Thailands discussion paper outlining the original proposal
for an ASEAN Free Trade Area, namely, a need to (a) prepare for greater
global trade liberalization following the Uruguay Round, (b) liberalize in-
ternal trade in order to attract foreign direct investment, (c) conduct trade
negotiations with external trading partners as a single entity, and (d) to
166 Recent scholarship on Chinese attitudes towards mediation in the Peoples Republic of
China has avoided such a singular perspective, and has sought to explain attitudes in
China along philosophical and historical-ideological lines (e.g., the influence of Commu-
nist ideology), in addition to the cultural explanation; see Gabrielle Kaufmann-Kohler
& Fan Kun, Integrating Mediation into Arbitration: Why it Works in China (2008)
25:4 J Intl Arb 479.
167 Zhang, supra note 163 at 9-13.
168 See e.g. Iida, supra note 43; Araki, supra note 106; Pekkanen, supra note 105.
169 Gao, supra note 107.
170 Romeo A Reyes, Are jobs being created or lost in AFTA?, The Jakarta Post (31 May
2005) online: Global Factiva
EAST ASIAS ENGAGEMENT WITH COSMOPOLITAN IDEALS 859
do so within APEC and the East Asia Economic Group.171 In other words,
the ASEAN FTAs are motivatedat least on the Southeast Asian side
by economic, not political, considerations in the language of neo-
functionalist theory.172
In cases where RTA dispute settlement design is likely to become a
negotiating issue, there is therefore a real likelihood of accommodating
some degree of pressure from external trading partners about conferring
greater transparency on trade disputes. This explains the difference be-
tween the ASEAN agreements and the Trans-Pacific SEP Agreement. But
in cases where the East Asian nationsthe nations of ASEAN, China,
Korea, and Japan, and even Australia and New Zealandare interacting
purely between themselves, transparency has been given a fairly low pri-
ority.
Conclusion
An East Asian view about how trade dispute settlement systems
should be designed is slowly emerging. Democratically inspired trade law
scholarship and cultural explanations of the international law behaviour
of the Southeast and Northeast Asian trading nations have failed to cap-
ture or prescribe East Asias regional treaty behaviour. Instead, such be-
haviour has resulted in the emergence of two different treaty models for
the settlement of trade disputes. In the course of our argument, we have
traced the treaty practice of ASEAN, together with those of China, Korea,
Japan, Australia, and New Zealand. We find two models of trade dispute
settlement emerging. The first is to be found in ASEANs 2004 Protocol
and the regimes established under the China-ASEAN FTA, Korea-
ASEAN FTA, Japan-ASEAN FTA, and AANZFTA. All adopt a closed,
sovereign-centric view of trade dispute settlement. The second is to be
found in the Trans-Pacific Strategic Economic Partnership Agreement.
Democratic arguments supporting greater transparency in trade dis-
putes are salient where authoritarianism is primarily at issue. But that is
not the case with East Asia. Major East Asian (and Australasian) trading
nations are democratic, with some of the newer democracies, such as In-
donesia, demonstrating an even more fervent popular commitment to de-
mocratic ideals. A cultural argument (e.g., an Authoritarian Asia argu-
171 The ASEAN Free Trade Area: A Proposal (Thai discussion paper, October 1991), cited in
Rudolfo Severino, Southeast Asia in Search of an ASEAN Community (Singapore:
ISEAS, 2006) at 223.
172 C.f. David Mitrany, A Working Peace System (Chicago: Quadrangle Books,1966), 92-99,
172; Ernst B Haas, The Uniting of Europe in Mette Eilstrup-Sangiovanni, ed, Debates
on European Integration: A Reader (New York: Palgrave Macmillan, 2006) 105 at 111.
860 (2011) 56:4 MCGILL LAW JOURNAL ~ REVUE DE DROIT DE MCGILL
ment) would have difficulty in explaining treaty behaviour that has
adapted along pragmatic lines of economic strategy. On the other side,
culture would also be a poor normative argument in response to the bene-
fits that greater transparency can bring, namely, its tendency to improve
the quality of third party decision making, to reduce the risk of corruption
or undue influence, and to lead to a more coherent body of jurisprudence.
While East Asia has demonstrated a basic acceptance of Hans Kel-
sens notion of institutionalized modes for the pacific settlement of inter-
national disputes,173 this has not amounted to a further acceptance of
Kantian cosmopolitanism.174 Contemporary developments in Asian trade
dispute settlement design reflect, instead, a world view in which the
Northeast and Southeast Asian trading nations interact on equal, sover-
eign terms while making small exceptions only as pragmatism might sug-
gest, such as the perceived need, under the Trans-Pacific SEP Agreement
and Koreas FTA with the United States, to have institutional arrange-
ments that transcontinental partners would presumably find more attrac-
tive. In their innermost vision of an intergovernmental world trading or-
der, the traditional modes of inter-state, classical diplomacy trump cos-
mopolitanism. The East Asian nations subscribe to realism in interna-
tional affairs, not liberalism.175
Similarly, democratically inspired trade law scholarship has had lim-
ited practical bearing, persuasive import, or predictive value in relation to
the behaviour of East Asian trading nations. Yet such scholarship speaks
to the regions potential transcontinental trading partners.
Frederick Abbott once likened the rise of RTAs to that of a new domi-
nant trade species.176 We can take the analogy further. East Asia now
has a new, regional subspeciesan East Asian RTA dispute settlement
modelfollowing the successive conclusion of the China-ASEAN, Korea-
ASEAN, and Japan-ASEAN FTAs, and the AANZFTA. Together with the
for export dispute settlement model found in the Trans-Pacific SEP
173 Hans Kelsen, Peace through Law (Chapel Hill: University of North Carolina Press,
1944), 116; Hans Kelsen, Law of the United Nations: A Critical Analysis of Its Funda-
mental Problems (London: Stevens: 1951) 484.
174 See generally Charnovitz, supra note 61 at 678. See also Tesn, supra note 14.
175 For realism and liberalism in international relations theory, see Kenneth W Abbott,
International Relations Theory, International Law, and the Regime Governing Atroci-
ties in Internal Conflicts, Symposium on Method in International Law, (1999) 93:2
AJIL 361.
176 Frederick M Abbott, A New Dominant Trade Species Emerges: Is Bilateralism a
Threat? in William J Davey & John Jackson, eds, The Future of International Eco-
nomic Law (Oxford: Oxford University Press, 2008) 133.
EAST ASIAS ENGAGEMENT WITH COSMOPOLITAN IDEALS 861
Agreement,177 and to a lesser extent the US-Singapore, Australia-US, and
the (as yet unratified) Korea-US bilateral deals, these two models coexist.
Each occupies its own niche in East Asias emerging trade architecture.
By this diversification of trade policy choices, East Asias policy-makers
have helped to create an environment where the two species will not be
forced to compete in an environment reminiscent of ecologys niche con-
cept:178
[I]f … two species are forced to compete in an undiversified environ-
ment one inevitably becomes extinct. If there is a diversification in
the system so that some parts favor one species, other parts the
other, the two species can coexist.
Another way of describing what now seems to be happening in the realm
of trade dispute settlement design in the East Asian region is that we
have two models. The first is historically derived from ASEANs own in-
ternal dispute settlement regime, which leans in towards Southeast
Asia, China, Korea, Japan, Australia, and New Zealand. The second
model is based on the model in the Trans-Pacific SEP Agreement (to
which Singapore, New Zealand, and Brunei are founding parties), the US-
Singapore FTA, Australia-US FTA, and Korea-US FTA, which lean out-
wards to the wider Asia-Pacific.
What this means is that East Asias transcontinental trading partners
have an historic opportunity to influence the treaty behaviour of the East
Asian nations, and beyond that, the political morality of East Asia. While
there is the risk, following the global financial crisis, that an ascendant
East Asia could become more insular,179 the trade policies, commercial
habits, and public treaty arrangements that accompany this may yet hold
the key to a continued engagement between East and West. When the
GATT was first established, the United States was the largest economy in
the world. Since then, first the European Union, then Japan, and now
China have also become the worlds most powerful economies, with na-
tional economic and political systems that are different, and in the case of
China considerably different, from that of the United States, Canada, and
Western Europe.180 From the social market economy model in Europe,181
177 See TPA, supra note 9, art 20.6, para 1 (inviting the participation of APEC economies
and other states).
178 G Evelyn Hutchinson, Concluding Remarks (1957) 22 Cold Spring Harbor Symposia
on Quantitative Biology: Population Studies 415 at 417.
179 See Simon SC Tay, Asia Alone: The Dangerous Post-Crisis Divide from America (Singa-
pore: John Wiley & Sons, 2010).
180 See Sylvia Ostry, The Post-Cold War Trading System: Whos on First? (Chicago: Univer-
sity of Chicago Press, 1997) for the now classic work on the systemic causes of trade fric-
tion during the Cold War era.
862 (2011) 56:4 MCGILL LAW JOURNAL ~ REVUE DE DROIT DE MCGILL
to the steered economic liberalization of China,182 these East Asian na-
tions (and the great majority of nations) now embrace Adam Smiths view
that as with people, nations too can trade and in that way cooperate with-
out coercion.183 The East Asian trading nations all accept the benefits that
an international division of labour will bring. Yet the commercial societies
they create within this simple system of natural liberty do not always
adhere to democratic ideals; their governments support the workings of
the market without recognizing that just as a free market fosters individ-
ual freedom, choice and autonomy,184 there is at least an argument to be
made for fostering free markets through policies which uphold these indi-
vidual values.
One way by which East Asias differences with the West may be ad-
dressed today is in negotiating the kinds of trade treaty provisions we
have seen in the sorts of highly secluded negotiating rooms where trade
treaty negotiators meet, and where these negotiators can and already do
deliberate the merits of cosmopolitan ideals and democratic thought.
181 Treaty of Lisbon Amending the Treaty on the European Union and the Treaty Establish-
ing the European Community, 13 December 2007, [2007] OJ, C 306/01. Article 2(3)
stipulates that the Lisbon Treaty obliges the member states of the European Union to
work together for a highly competitive social market economy, aiming at full employ-
ment and social progress.
182 See Randall Peerenboom, China Modernizes: Threat to the West or Model for the Rest?
(Oxford: Oxford University Press, 2007).
183 Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (New
York: Modern Library, 1994).
184 Bacchus, Trade and Freedom, supra note 20 at 155.
