Hostname: page-component-586b7cd67f-rdxmf Total loading time: 0 Render date: 2024-11-28T17:30:17.890Z Has data issue: false hasContentIssue false
  • English
  • Français

Governing the Interface of U.S.-China Trade Relations

Published online by Cambridge University Press:  27 July 2021

Gregory Shaffer
Gregory Shaffer*
Affiliation:
Chancellor's Professor, University of California, Irvine School of Law. Thanks to Anne van Aaken, Rachel Brewster, Tomer Broude, Henrique Choer Moraes, Kathleen Claussen, Jacob Cogan, Harlan Cohen, Mark Cohen, Christina Davis, Jacques deLisle, Henry Gao, Benton Heath, Jennifer Hillman, Rob Howse, Nicholas Lamp, Desiree LeClercq, Simon Lester, Tim Meyer, Marko Milanović, Amrita Narlikar, Anne Peters, Anthea Roberts, Dani Rodrik, Robert Wolfe, Mark Wu, Weihuan Zhou, and participants at workshops at Centro Estudios Internacionales Universidad Católica, Freie Universität Berlin, Harvard-Yale international law journals virtual conference, the University of California, Irvine, the University of Pennsylvania Center for the Study of Contemporary China, and the WTO Trade Dialogues Lecture Series, as well as five anonymous reviewers and editors Curt Bradley and Laurence Helfer, for their comments. Thanks also to Allyson Myers, Jessica Pierucci, and Christina Tsou for research assistance.
Get access Rights & Permissions [Opens in a new window]

Abstract

The strained U.S.-China trade relationship poses a frontal challenge to the multilateral trading system and has broad repercussions for international law. This Article addresses three dimensions of this relationship: (1) the economic dimension; (2) the geopolitical/national security dimension; and (3) the normative/social policy dimension. The Article advances a middle ground between those seeking to reinforce the World Trade Organization (WTO) system with new rules that limit the state's role in the economy, and those who reject WTO constraints in favor of a power-based system. It proposes pragmatic reforms to govern the interface of the two states’ respective systems across these three dimensions to facilitate ongoing exchange while giving each country latitude to protect itself from the externalities of the other's policies. The result would be greater room for bilateral and plurilateral bargaining, but conducted within the umbrella of the multilateral system.

Type
Lead Articles
Information
American Journal of International Law , Volume 115 , Issue 4 , October 2021 , pp. 622 - 670
Copyright
Copyright © The Author(s), 2021. Published by Cambridge University Press for The American Society of International Law

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1 Some might substitute the term “realism” for “bargaining.” For realists, the turn to law is a function of power and interest, with law playing little to no constitutive or independent institutional role. Nonetheless, law facilitates order under a realist model as well. Mearsheimer, John, Bound to Fail: The Rise and Fall of the Liberal International Order, 43 Int'l Sec. 7 (2019)Google Scholar.

2 The term “neoliberalism” is politically charged with many meanings. See Rodgers, Daniel, The Uses and Abuses of “Neoliberalism,” Dissent (Winter 2018)CrossRefGoogle Scholar, at https://www.dissentmagazine.org/article/uses-and-abuses-neoliberalism-debate. Yet, the phrase captures the proposed doubling down of rules to constrain state industrial policy, and helps differentiate such an approach from earlier variants of embedded liberalism.

3 The U.S.-China Trade Policy Working Group Joint Statement, US-China Trade Relations: A Way Forward (2019), available at https://rodrik.typepad.com/US-China%20Trade%20Relations%20-%20A%20Way%20Forward%20Booklet%20%28for%20print%29.pdf.

4 David Lawder, Trump Threat to “Decouple” U.S. and China Hits Trade, Investment Reality, Reuters (June 23, 2020), at https://www.reuters.com/article/us-usa-trade-china-analysis/trump-threat-to-decouple-u-s-and-china-hits-trade-investment-reality-idUSKBN23U2WU (quoting the president raising “a complete decoupling from China” as an option); Michael Hirsh, Trump's Economic Iron Curtain Against China, For. Pol'y (Aug. 23, 2019), at https://foreignpolicy.com/2019/08/23/trumps-economic-iron-curtain-against-china-hawk-peter-navarro-american-factory-obama (quoting Trump, “‘[o]ur great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA”).

5 See, e.g., David Dollar & Ryan Hass, Getting the China Challenge Right, Brookings (Jan. 25, 2021), at https://www.brookings.edu/research/getting-the-china-challenge-right; Max Boot, Opinion: No One Does More to Hurt America and Help China Than Trump, Wash. Post (July 21, 2020), at https://www.washingtonpost.com/opinions/2020/07/21/compete-with-china-we-first-need-defeat-trump.

6 Petros C. Mavroidis & André Sapir, China and the WTO: Why Multilateralism Still Matters 165 (2021). They also characterize their approach as a “middle ground,” but this time between “decoupling” and “staying idle.” They characterize the approach of Dani Rodrik, the convenor of the U.S.-China Trade Policy Working Group, as “staying idle.” Id. at 159. However, neither Rodrik nor this Article's framework represents “staying idle.” Rather, both advocate granting more policy space for countries, as opposed to even more constraining WTO rules on the state's role in the economy.

7 Mavroidis & Sapir, supra note 6, at 12 (“behave in a market-friendly manner”), 152 (“good WTO”), 153 (“‘Western’ habits”).

8 Id. at vii.

9 Author's count (seventy-three “Western,” eight “West,” and one “West's”). Id. For example, they stress that the trade conflict with China differs from the West's earlier one with Japan because Japan became “Westernized,” and thus “one of us,” “integrated into the ‘Western club.’” Id. at 7, 33, 142.

10 See, e.g., Damien Cahill, Polanyi, Hayek and Embedded Neoliberalism, 15 Globalizations 977 (2018); Sonia E. Rolland & David Trubek, Embedded Neoliberalism and Its Discontents: The Uncertain Future of Trade and Investment Law, in World Trade and Investment Law Reimagined: A Progressive Agenda for an Inclusive Globalization (Alvaro Santos, Chantal Thomas & David Trubek eds., 2019); see also Quinn Slobodian, Globalists: The End of Empire and the Birth of Neoliberalism (2018); Kristen Hopewell, Breaking the WTO: How Emerging Powers Disrupted the Neoliberal Project 2 (2016).

11 In this vein, cf. Center for Strategic & International Studies, The WTO: Looking Forward (Oct. 12, 2018), at https://www.csis.org/events/wto-looking-forward (“We need to recognize that the economic system of China is not compatible with the WTO norms;” and “the WTO as currently constituted is not equipped to deal with China”); Mark Wu, The WTO and China's Unique Economic Structure, in Regulating the Visible Hand?: The Institutional Implications of Chinese State Capitalism 313, 350 (Benjamin L. Liebman & Curtis J. Milhaupt eds., 2015) (“The Party-state's desire to preserve its unique political economy is threatening to shatter the liberal [WTO] project of building a strong multilateral trading regime. In the end, both cannot stand.”).

12 For an important, work that makes a moral argument for pluralism in light of moral disagreement in a world of sovereign states, and that cautions against universalist projects enforced unilaterally, see Brad R. Roth, Sovereign Equality and Moral Disagreement: Premises of a Pluralist Legal Order (2011).

13 Margaret Thatcher famously declared that “there is no alternative” to the market economy. Margaret Thatcher, Speech to Conservative Party Conference (Oct. 20, 1967); see also Nick Robinson, Economy: There Is No Alternative (TINA) Is Back, BBC News (Mar. 7, 2013), at https://www.bbc.com/news/uk-politics-21703018 (“the phrase forever associated with Mrs Thatcher in the 1980s”).

14 On the development of the transparency requirements in the WTO, see Steve Charnovitz, Transparency and Participation in the WTO, 56 Rutgers L. Rev. 927 (2004); Padideh Ala'i, Transparency and the Expansion of the WTO Mandate, 26 Am. U. Int'l L. Rev. 1009 (2011).

15 Office of the U.S. Trade Representative, 2019 Report to Congress on China's WTO Compliance (Mar. 2020), at https://ustr.gov/about-us/policy-offices/press-office/reports-and-publications/2019/2019-report-chinas-wto-compliance; Mark Wu, The “China, Inc.” Challenge to Global Trade Governance, 57 Harv. Int'l L.J. 261 (2016).

16 Gregory Shaffer, Legal Realism and International Law, in International Legal Theory: Foundations and Frontiers (Jeffrey L. Dunoff & Mark A. Pollack eds., 2021).

17 Top 20 Economies in the World, Investopedia (Dec. 24, 2020) at https://www.investopedia.com/insights/worlds-top-economies (citing IMF data for 2019).

18 China's Economic Outlook in Six Charts, IMF News (July 26, 2018), at https://www.imf.org/en/News/Articles/2018/07/25/na072618-chinas-economic-outlook-in-six-charts.

19 Alyssa Leng & Roland Rajah, Global Trade Through a US-China Lens, Interpreter (Dec. 18, 2019), at https://www.lowyinstitute.org/the-interpreter/chart-week-global-trade-through-us-china-lens.

20 Gregory Shaffer, Emerging Powers and the World Trading System: The Past and Future of International Economic Law (2021).

21 Greg Leiserson, Will McGrew & Raksha Kopparam, The Distribution of Wealth in the United States and Implications for a Net Worth Tax, Wash. Ctr. for Equitable Growth (Mar. 21, 2019), at https://equitablegrowth.org/the-distribution-of-wealth-in-the-united-states-and-implications-for-a-net-worth-tax (citing author's calculations from Board of Governors of the Federal Reserve System, Survey of Consumer Finances, at https://www.federalreserve.gov/econres/scfindex.htm).

22 Jonathan Cheng, China Is the Only Major Economy to Report Economic Growth for 2020, Wall St. J. (Jan. 18, 2021), at https://www.wsj.com/articles/china-is-the-only-major-economy-to-report-economic-growth-for-2020-11610936187.

23 Rachel Siegel, Andrew Van Dam & Erica Werner, 2020 Was the Worst Year for Economic Growth Since World War II, Wash. Post (Jan. 28, 2021), at https://www.washingtonpost.com/business/2021/01/28/gdp-2020-economy-recession.

24 European Comm'n Press Release, 17/2021, GDP Down by 0.7% in the Euro Area and by 0.5% in the EU (Feb. 2, 2021), at https://ec.europa.eu/eurostat/documents/portlet_file_entry/2995521/2-02022021-AP-EN.pdf/0e84de9c-0462-6868-df3e-dbacaad9f49f.

25 Hamza Shaban & Heather Long, The Stock Market Is Ending 2020 at Record Highs, Even as the Virus Surges and Millions Go Hungry, Wash. Post (Dec. 31, 2020), at https://www.washingtonpost.com/business/2020/12/31/stock-market-record-2020.

26 Data extracted from Fed. Res. Bank St. Louis, Unemployment Rate, https://fred.stlouisfed.org/series/UNRATE (U.S. unemployment peaked at 14.7%). Additionally, all but three states (Alabama, Missouri, and West Virginia) set all-time records for unemployment between February and July of 2020. Data extracted from U.S. Bureau of Labor Statistics, Local Area Unemployment Statistics, at https://www.bls.gov/web/laus/lauhsthl.htm; Madeleine Ngo, Small Businesses Are Dying by the Thousands—and No One Is Tracking the Carnage, Wash. Post (Aug. 11, 2020), at https://www.washingtonpost.com/business/on-small-business/small-businesses-are-dying-by-the-thousands-and-no-one-is-tracking-the-carnage/2020/08/11/660f9f52-dbda-11ea-b4f1-25b762cdbbf4_story.html.

27 Dani Rodrik, Straight Talk on Trade: Ideas for a Sane World Economy (2017); Gregory Shaffer, Retooling Trade Agreements for Social Inclusion, 2019 U. Ill. L. Rev. 1 (2019); Gabriel Zucman, How Corporations and the Wealthy Avoid Taxes (and How to Stop Them), N.Y. Times (Nov. 10, 2017), at https://www.nytimes.com/interactive/2017/11/10/opinion/gabriel-zucman-paradise-papers-tax-evasion.html (estimating that “$8.7 trillion, 11.5 percent of the entire world's G.D.P., is held offshore by ultrawealthy households in a handful of tax shelters, and most of it isn't being reported to the relevant tax authorities”).

28 Matthew C. Klein & Michael Pettis, Trade Wars Are Class Wars: How Rising Inequality Distorts the Global Economy and Threatens International Peace (2020); Branko Milanović, Global Inequality: A New Approach for the Age of Globalization (2016).

29 David H. Autor, David Dorn & Gordon H. Hanson, The China Syndrome: Local Labor Market Effects of Import Competition in the United States, 103 Am. Econ. Rev. 2121 (2013); Stefan Thewissen & Olaf van Vliet, Competing with the Dragon: Employment Effects of Chinese Trade Competition in 17 Sectors Across 18 OECD Countries, 7 Pol. Sci. Res. & Methods 215 (2019). The Autor, et al. study is criticized for not assessing net job effects from trade with China, as noted in Robert C. Feenstra & Akira Sasahara, The “China Shock,” Exports and U.S. Employment: A Global Input-Output Analysis, 26 Rev. Int'l Econ. 1053 (2018). Nonetheless, the impact on communities was significant, as was the political effect. David Autor, David Dorn, Gordon Hanson & Kaveh Majlesi, Importing Political Polarization? The Electoral Consequences of Rising Trade Exposure, 110 Am. Econ. Rev. 3139 (2020).

30 Tom Jacobs, Research Finds that Racism, Sexism, and Status Fears Drove Trump Voters, Pac. Standard (Apr. 24, 2018), at https://psmag.com/news/research-finds-that-racism-sexism-and-status-fears-drove-trump-voters (citing work of Diana Mutz and others); Daniel Trilling, The Irrational Fear of Migrants Carries a Deadly Price for Europe, Guardian (June 28, 2018), at https://www.theguardian.com/commentisfree/2018/jun/28/migrants-europe-eu-italy-matteo-salvini; Adam Tooze, Crashed: How a Decade of Financial Crises Changed the World 576 (2018) (“Even an issue such as trade was saturated with racial markers.”).

31 Shaffer, supra note 20, at 56.

32 Milanović, supra note 28, at 46–117. Over 850 million Chinese rose out of poverty in the last thirty-five years (to twenty-five million and declining) through trade-generated economic growth. World Bank Group, DataBank: Poverty and Equity, at http://databank.worldbank.org/data/reports.aspx?source=poverty-and-equity-database (number of poor at $1.90 per day at 2011 PPP).

33 Jennifer Harris & Jake Sullivan, America Needs a New Economic Philosophy. Foreign Policy Experts Can Help, For. Pol'y (Feb. 7, 2020), at https://foreignpolicy.com/2020/02/07/america-needs-a-new-economic-philosophy-foreign-policy-experts-can-help.

34 Author interview with Member of the WTO Secretariat, Geneva (June 30, 2017) (“Now the U.S. has become a wrecking ball to the system. It's like Gotham City where the Joker took over.”).

35 Gregory Shaffer, A Tragedy in the Making? The Decline of Law and the Return of Power in International Trade Relations, 44 Yale J. Int'l L. Online 37 (2018).

36 Biden's New China Doctrine, Economist (July 17, 2021), at https://www.economist.com/leaders/2021/07/17/bidens-new-china-doctrine.

37 According to the Pew Research Center, U.S. views of China have turned increasingly negative, with approximately 66% of U.S. adults, surveyed between March 3–29 of 2020, expressing unfavorable opinions of China, up from about 47% in 2017. Laura Silver, Kat Devlin & Christine Huang, Americans Fault China for Its Role in the Spread of COVID-19, Pew Res. Ctr. (July 30, 2020), at https://www.pewresearch.org/global/2020/07/30/americans-fault-china-for-its-role-in-the-spread-of-covid-19.

38 Elizabeth C. Economy, The Third Revolution: Xi Jinping and the New Chinese State (2018); Lauren Yu-Hsin Lin & Curtis J. Milhaupt, Party Building or Noisy Signaling? The Contours of Political Conformity in Chinese Corporate Governance, 50 J. Legal Stud. 187 (2021).

39 Kathrin Hille, “Wolf Warrior” Diplomats Reveal China's Ambitions, Fin. Times (May 11, 2020), at https://www.ft.com/content/7d500105-4349-4721-b4f5-179de6a58f08.

40 John Jackson earlier theorized trade agreements in terms of providing an “interface” between different systems, focusing on the economic dimension. John H. Jackson, The World Trading System: Law and Policy of International Economic Relations 248 (2d ed. 1997) (“The Interface Question”).

41 See the statement of U.S. Ambassador to the WTO Dennis Shea, in For U.S., WTO Reform Hinges on Economic Model “Convergence,” Inside U.S. Trade (Nov. 19, 2020), at https://insidetrade.com/daily-news/us-wto-reform-hinges-economic-model-%E2%80%98convergence%E2%80%99; and support for this paradigm on the political right and left in the United States, in Keith Johnson & Robbie Gramer, The Great Decoupling, For. Pol'y (May 14, 2020), at https://foreignpolicy.com/2020/05/14/china-us-pandemic-economy-tensions-trump-coronavirus-covid-new-cold-war-economics-the-great-decoupling.

42 Varieties of Capitalism: The Institutional Foundations of Comparative Advantage (Peter A. Hall & David Soskice eds., 2001).

43 The U.S.-China Trade Policy Working Group, supra note 3.

44 Id. at 4–5.

45 Id. at 1.

46 The Princeton Encyclopedia of the World Economy 126 (Kenneth A. Reinert, Ramkishen S. Rajan, Amy Joycelyn Glass & Lewis S. Davis eds., 2009). A classic example is an “optimal tariff” where a country exercising market power can raise its tariff to induce exporters to lower their prices to sell in its market, thus adversely affecting the terms of trade. Christian Broda, Nuno Limão & David E. Weinstein, Optimal Tariffs and Market Power: The Evidence, 98 Am. Econ. Rev. 2032 (2008).

47 The United States, European Union, and Japan successfully challenged these measures before the WTO in two cases, and China complied with the rulings. Appellate Body Reports, China–Measures Related to the Exportation of Various Raw Materials, WTO Doc. WT/DS394/AB/R, WT/DS395/AB/R, WT/DS398/AB/R (adopted Jan. 30, 2012); Appellate Body Reports, China–Measures Relating to the Exportation of Rare Earths, Tungsten, and Molybdenum, WTO Doc. WT/DS431/AB/R, WT/DS432/AB/R, WT/DS/433/AB/R (adopted Aug. 7, 2014). Cf. Richard Altieri & Benjamin Della Rocca, U.S. Further Tightens Huawei Blacklist, Putting a “Blanket Ban” on the Company, Lawfare (Aug. 28, 2020), at https://www.lawfareblog.com/us-further-tightens-huawei-blacklist-putting-blanket-ban-company.

48 Thomas M. Franck, Proportionality in International Law, 4 L. & Eth. Hum. Rts. 230 (2010) (including sections on “Jus ad Bellum,” “Jus in Bello,” “Individual Criminal Conduct,” “Non-Military Countermeasures,” “Trade Disputes,” and “Human Rights”); Thomas Cottier, Roberto Echandi, Rachel Liechti-McKee, Tetyana Payosova & Charlotte Sieber, The Principle of Proportionality in International Law: Foundations and Variations, 18 J. World Inv. & Trade 628 (2017).

49 For example, the United States signed an agreement with China in 2019 (colloquially known in the United States as the “phase 1” agreement), which requires the application of the proportionality principle to maintain orderly trade relations. Economic and Trade Agreement Between the Government of the United States of America and the Government of the People's Republic of China, Art. 7.4(4)(b), Jan. 15, 2020, available at https://ustr.gov/sites/default/files/files/agreements/phase%20one%20agreement/Economic_And_Trade_Agreement_Between_The_United_States_And_China_Text.pdf (“adopting a remedial measure in a proportionate way with the purpose of preventing the escalation of the situation and maintain the normal bilateral trade relationship”).

50 See, e.g., Isabelle Icso, Biden Transition Adviser Suggests Carbon Deal with EU Could Be on Horizon, World Trade Online (Mar. 9, 2021), at https://insidetrade.com/daily-news/biden-transition-adviser-suggests-carbon-deal-eu-could-be-horizon; Brad Plummer, Europe Is Proposing a Border Carbon Tax. What Is It and How Will It Work, N.Y. Times (July 14, 2021), at https://www.nytimes.com/2021/07/14/climate/carbon-border-tax.html.

51 Understanding on Rules and Procedures Governing the Settlement of Disputes, Art. 22.4, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 2, 1869 UNTS 401 [hereinafter DSU]. Under GATT Article XXIII, this includes responses to “any other situation,” “whether or not [a measure] conflicts with the provisions of this Agreement.” General Agreement on Tariffs and Trade, Art. XXIII.1(b)–(c), Oct. 30, 1947, 55 UNTS 194 [hereinafter GATT].

52 GATT, supra note 51, Art. I. Thus, when China agreed to purchase U.S. goods in vastly greater quantities under the Economic and Trade Agreement Between the Government of the United States of America and the Government of the People's Republic of China, other members have a potential claim against China for discriminating in favor of U.S. products. James Politi, EU Trade Commissioner Criticizes US-China Trade Deal, Fin. Times (Jan. 16, 2020), at https://www.ft.com/content/6a6b5548-3877-11ea-a6d3-9a26f8c3cba4. In the 1980s, the European Communities successfully challenged Japan after it resolved a trade dispute with the United States in a manner that adversely affected the European Communities. Report of the Panel, Japan—Trade in Semi-Conductors, L/6309 (adopted May 4, 1988), GATT BISD 35S/116, available at https://www.wto.org/english/tratop_e/dispu_e/gatt_e/87semcdr.pdf.

53 See Articles I (the most-favored-nation clause), III (the national treatment clause), and X (Publication and Administration of Trade Regulations) of the GATT, among other provisions in WTO agreements in this vein. In practice, new rules generally build on existing structures—what political scientists refer to as “layering”—which gives rise to institutional change. Jeroen van der Heijden, Institutional Layering: A Review of the Use of the Concept, 31 Pol. 9 (2011).

54 US-China Trade Policy Working Group, supra note 3, at 1.

55 Id.

56 Henry Farrell & Abraham L. Newman, Weaponized Independence: How Global Economic Networks Shape State Coercion, 44 Int'l Sec. 42 (2019).

57 Branko Milanović, Capitalism Alone: The Future of the System that Rules the World (2019).

58 Nicholas R. Lardy, The State Strikes Back: The End of Economic Reform in China? (2019).

59 Milanović, supra note 57, ch. 2. This being said, neither U.S. nor European policy regarding the state has remained constant, and they could revert toward greater state involvement in the economy, such as regarding technological development. Cf. Varieties of Capitalism, supra note 42; Mariana Mazzucato, Mission Economy: A Moonshot Guide to Changing Capitalism (2021).

60 Cf. Andrew Lang, Heterodox Markets and “Market Distortion” in the Global Trading System, 22 J. Int'l Econ. L. 677 (2019).

61 Mavroidis & Sapir, supra note 6, at viii (“China clearly violates the spirit of the WTO”), 172 (need to “translate” the WTO's spirit “into contractual, legal language”); Wu, supra note 15, at 350. An extensive literature on the history of the GATT, however, calls into question this claim regarding the GATT and WTO's spirit, given variation in national systems, going back to the negotiation of the GATT and Havana Charter. Cf. Daniel Drache, The Short but Significant Life of the International Trade Organization: Lessons for Our Time 7, 13, 25 (CSGR Working Paper No. 62/00 2000), available at http://www2.warwick.ac.uk/fac/soc/csgr/research/workingpapers/2000/wp6200.pdf; Robert Howse, Official Business: International Trade Law and the Resurgence (or Resilience) of the State as an Economic Actor (2021) (on file). This history provides caution regarding WTO overreach.

62 Jackson, supra note 40, at 248.

63 Mavroidis & Sapir, supra note 6, at 155 (quoting at length U.S. statements before the WTO General Council in 2020 and concluding “We agree”).

64 U.S. Trade Rep., 2017 USTR Report to Congress on China's WTO Compliance 2 (Jan. 2018), https://ustr.gov/sites/default/files/files/Press/Reports/China%202017%20WTO%20Report.pdf; U.S. Trade Rep., 2019 Report to Congress on China's WTO Compliance 6 (March 2020), https://ustr.gov/sites/default/files/2019_Report_on_China%E2%80%99s_WTO_Compliance.pdf; Center for Strategic & International Studies, supra note 11. Cf. Xie Feng, US Attacks on China's Economy Reflect a Double Standard, Fin. Times (June 23, 2019) (critiquing the “hegemonic logic” of such proposals).

65 Autor, Dorn & Hanson, supra note 29. As captured in Mathew Klein and Michael Pettis's title, today “trade wars are class wars.” Klein & Pettis, supra note 28.

66 The Biden administration calls its trade policy “worker-centered.” United States Trade Representative (USTR) Katherine Tai worked closely with organized labor when she served as chief trade counsel for the House Committee on Ways and Means. Yuka Hayashi, Biden Trade Policy to Center on Workers, USTR Nominee Says, Wall St. J. (Jan. 12, 2021), at https://www.wsj.com/articles/biden-trade-policy-to-center-on-workers-ustr-nominee-says-11610471141.

67 Office of the U.S. Trade Rep. Press Release, Joint Statement on Trilateral Meeting of the Trade Ministers of the United States, Japan, and the European Union (Sept. 25, 2018), at https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/september/joint-statement-trilateral.

68 Office of the U.S. Trade Rep. Press Release, Join Statement of the Trilateral Meeting of the Trade Ministers of the United States, Japan, and the European Union (Jan. 14, 2020), at https://ustr.gov/about-us/policy-offices/press-office/press-releases/2020/january/joint-statement-trilateral-meeting-trade-ministers-japan-united-states-and-european-union.

69 Id., para. 1.

70 Id., para. 2.

71 Id., para. 3.

72 Id., para. 5.

73 Robert Howse, Making the WTO (Not So) Great Again: The Case Against Responding to the Trump Trade Agenda Through Reform of WTO Rules on Subsidies and State Enterprises, 23 J. Int'l Econ. L. 371 (2020) (critiquing the trilateral initiative proposals on WTO subsidy reform).

74 Niall McCarthy, How Global Coronavirus Stimulus Packages Compare, Forbes (May 11, 2020), at https://www.forbes.com/sites/niallmccarthy/2020/05/11/how-global-coronavirus-stimulus-packages-compare-infographic/?sh=f18239fca52c (“The U.S. has committed to the largest rescue package of any country by far with the three phases of congressional stimulus working out at $8.3 billion, $192 billion and $2.5 trillion.”).

75 Mitchell Hartman, What Did America Buy with the Auto Bailout and Was It Worth It, Marketplace (Nov. 13, 2018), at https://www.marketplace.org/2018/11/13/what-did-america-buy-auto-bailout-and-was-it-worth-it.

76 Alan O. Sykes, The Questionable Case for Subsidies Regulation: A Comparative Perspective, 2 J. Legal Analysis 473 (2010).

77 Alan O. Sykes, The Limited Economic Case for Subsidies Regulation, e15 Initiative (2015), at https://e15initiative.org/publications/the-limited-economic-case-for-subsidies-regulation.

78 Kyle Bagwell & Robert W. Staiger, Will International Rules on Subsidies Disrupt the World Trading System, 96 Am. Econ. Rev. 877, 879, 891 (2006) (“The WTO subsidy rules interfere with the ability of governments to structure their tariff negotiations so as to achieve efficient policy combinations. . . . Our results indicate that the new WTO subsidy rules may ultimately do more harm than good to the multilateral trading system, including by having a ‘chilling’ effect on the desire of governments to take on market access commitments through WTO negotiations.”).

79 Exceptions exist, as when subsidies are predatory in imperfectly competitive markets. Petros Mavroidis, The Regulation of International Trade: The WTO Agreements on Trade in Goods, Vol. 2, at 193 (2016). There is nonetheless need for empirical study of particular problems to foster deliberation and potential resolution. Bernard M. Hoekman & Douglas Nelson, Rethinking International Subsidy Rules, 43 World Econ. 3104 (2020) (citing OECD studies).

80 Kyle Bagwell & Robert Staiger, The Design of Trade Agreements, in Handbook of Commercial Policy 436, 447 (Kyle Bagwell & Robert Staiger eds., 2016) (“Increase in an export subsidy generates a positive terms-of-trade externality for the importing country, by enabling this country to import at a lower world price.”).

81 Trebilcock, Howse, and Eliason thus write, “[t]his analysis suggests that rather than condemning foreign subsidies, importing countries should send expressions of gratitude to the subsidizing country, noting only their regret that subsidies are not larger and timeless.” Michael Trebilcock, Robert Howse & Antonia Eliason, The Regulation of International Trade 390 (4th ed. 2013). They note that “in almost every conceivable set of circumstances, countervailing duties reduce domestic social welfare in the importing country, where social welfare is defined as the maximization of producer, consumer and government surplus.” Id.

82 Such bargaining can include plurilateral initiatives, such as the trilateral initiative addressing Chinese subsidies.

83 Agreement on Subsidies and Countervailing Measures, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1A, pt. V, 1869 UNTS 14 [hereinafter SCM Agreement]. The countervailing duties reduce a country's national welfare (as tariffs do generally), but GATT and WTO rules have long permitted such duties. Countries can impose them on imports to offset the benefit from a specific subsidy, thus effectively transferring government revenue from the subsidizing country to the government collecting the additional duties.

84 Dani Rodrik, The Globalization Paradox: Democracy and the Future of the World Economy 238, 277 (2011); Ha-Joon Chang, Kicking Away the Ladder: Development Strategy in Historical Perspective (2002); Bagwell & Staiger, supra note 78, at 877 (“When viewed in the light shed by the existing theoretical literature, international agreements that seek to limit subsidies look immediately suspect.”), 879 (“The key changes introduced by the WTO subsidy rules may ultimately do more harm than good to the multilateral trading system.”); Mavroidis, supra note 79, at 312, 732 (n. 26) (“The [SCM] Agreement as it now stands is, in many respects, in stark contrast with prevailing economic theory. . . . This agreement is in dire need of redrafting.”). In parallel, TWAIL scholars have long argued that international trade rules can disempower more vulnerable WTO members. See, e.g., James Thuo Gathii, Third World Approaches to International Economic Governance, in International Law and the Third World: Reshaping Justice 255 (Richard Falk, Balakrishnan Rajagopal & Jacqueline Stevens eds., 2008). Article 27.1 of the SCM Agreement provides, “Members recognize that subsidies may play an important role in economic development programmes of developing country Members.” However, the special and differential treatment actually provided for developing countries is limited.

85 SCM Agreement, supra note 83, pt. II.

86 The terms “adverse effects” and serious prejudice” are respectively defined in Articles 5 and 6.3 of the SCM Agreement. Id.

87 Appellate Body Report, United States–Subsidies on Upland Cotton, WTO Doc. WT/DS267/AB/RW (adopted June 2, 2008).

88 General Agreement on Tariffs and Trade, Art. XXIII, Oct. 30, 1947, 55 UNTS 194 [hereinafter GATT]; Nicolas Lamp, At the Vanishing Point of Law: Rebalancing, Non-violation Claims, and the Role of the Multilateral Trade Regime in the Trade Wars, 22 J. Int'l Econ. L. 721 (2019).

89 Economic and Commercial Office of the Embassy of the People's Republic of China in the Republic of Lithuania, China's Position Paper on WTO Reform (Dec. 20, 2018), at http://lt.china-embassy.org/eng/xwdt/t1616985.htm (China “opposes special and discriminatory disciplines against state-owned enterprises in the name of WTO reform.”). For the original Chinese version, see Department of WTO Affairs, MOFCOM, at http://sms.mofcom.gov.cn/article/cbw/201812/20181202817611.shtml. The party-state uses these enterprises for broader reasons than financial profit, which concern the provision of not only social services, but also economic and social stability, security, and technological advancement, which are critical for the party-state's political authority and control. Margaret Pearson, Meg Rithmire, & Kellee Tsai, Party-State Capitalism in China (Harv. Bus. Sch. Working Paper, No. 21-065, 2020), at https://hbswk.hbs.edu/item/party-state-capitalism-in-china; Jaya Y. Wen, The Political Economy of State Employment and Instability in China (Harv. Bus. Sch. Working Paper, 2020), at https://www.hbs.edu/faculty/Pages//item.aspx?num=58850.

90 The WTO Agreement on Subsidies and Countervailing Measures provides, in Article 1, that the agreement applies to “a financial contribution by a government or any public body,” without defining what is a “public body,” and, in particular, whether the term encompasses a state-owned enterprise. SCM Agreement, supra note 83, Art. 1.1 (emphasis added).

91 The United States lost the interpretative contest before the Appellate Body. Appellate Body Report, United States–Definitive Anti-Dumping and Countervailing Duties on Certain Products from China, WTO Doc. WT/DS379/AB/R (adopted Mar. 11, 2011); Appellate Body Report, United States–Countervailing Duty Measures on Certain Products from China, WTO Doc. WT/DS437/AB/R (adopted Dec. 18 2014); Appellate Body Report, United States–Countervailing and Anti-Dumping Measures on Certain Products from China, WT/DS449/AB/R /Corr.1 (adopted July 17, 2014).

92 For criticism, see, for example, Michel Cartland, Gérard Depayre & Jan Woznowski, Is Something Going Wrong in the WTO Dispute Settlement?, 46 J. World Trade 979 (2012); Mavroidis & Sapir, supra note 6, at 183. Howse develops a proposal to set up a presumption of government involvement where a company is state-owned or controlled in light of mangers incentives, thus incentivizing greater transparency, which is in line with this Article's approach. Howse, supra note 61.

93 It found that “the central focus of a public body inquiry under Article1.1(a)(1) is not, as China contends, whether the conduct that is alleged to give rise to a financial contribution under subparagraphs (i)–(iii) or the first clause of subparagraph (iv)—i.e. the particular transaction at issue—is logically connected to an identified ‘government function.’ Rather, the relevant inquiry hinges on the entity engaging in that conduct, its core characteristics, and its relationship with government.” Appellate Body Report, United States – Countervailing Duty Measures on Certain Products from China – Recourse to Article 21.5 of the DSU by China, para. 5.100, WT/DS437/AB/RW and Add.1 (adopted Aug. 15, 2019) (emphasis added).

94 Id., para. 5.103.

95 Jennifer Hillman, The Best Way to Address China's Unfair Policies and Practices Is Through a Big, Bold Multilateral Case at the WTO, Testimony at Hearing on U.S. Tools to Address Chinese Market Distortions, U.S.-China Economic and Review Security Commission (June 8, 2018), available at https://www.uscc.gov/sites/default/files/Hillman%20Testimony%20US%20China%20Comm%20w%20Appendix%20A.pdf. The Obama administration prepared a claim on Chinese subsidies, but the Trump administration did not pursue it. Request for Consultations – Communication from the United States, China–Subsidies to Producers of Primary Aluminium, WTO Doc. WT/DS519/1; DS519: China — Subsidies to Producers of Primary Aluminium, at https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds519_e.htm (indicating that the United States has not taken any actions on the claim since the claim was brought on January 12, 2017).

96 See, e.g., Weihuan Zhou, Henry Gao & Xue Bai, China's SOE Reform: Using WTO Rules to Build a Market Economy, 68 Int'l & Comp. L. Q. 977 (2019); Henry Gao, Rethinking China Trade Policy: Lessons Learned and Options Ahead, Nat'l Found. Am. Pol'y (Jan. 1, 2021). China's 2015 Guiding Opinions on Deepening SOE Reform stipulates that state-owned enterprises shall “serve the national strategy and implement national industrial policy.” This could make it easier to establish that SOEs serve as public bodies. Central Committee of the Communist Party of China, State Council, Guiding Opinions on Deepening SOE Reform, China Gov't Network (Aug. 24, 2015), at http://www.gov.cn/zhengce/2015-09/13/content_2930440.htm.

97 Zhou, Gao & Bai, supra note 96 (citing Article 15(b) of China's Protocol of Accession).

98 The United States withdrew its signature from the TPP after President Trump assumed office, which became the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) with the remaining parties. Article 17.1 of the CPTPP (just as the TPP) defines a state-owned enterprise in terms of its ownership, rather its “exercise of government functions.” This definition also appears in Article 22.1 of the USMCA.

99 Eleanor Olcott, China Seeks to Join Transpacific Trade Pact, Fin. Times (Sept. 16, 2021), at https://www.ft.com/content/df94b345-8fb9-473f-8e58-0cb230c0a1fa. Marco Bronckers notes how such provisions could be included in a revision to China's Accession Protocol to the WTO. Marco Bronckers, Trade Conflicts: Whither the WTO?, 47 Legal Issues Econ. Integration 221 (2020).

100 EU-China investment negotiations, EU-China Comprehensive Investment Agreement, Sec. III, Subsec. 2, Art. 8 (“Transparency of Subsidies”) (unscrubbed text, Jan. 22, 2021), available at https://trade.ec.europa.eu/doclib/docs/2021/january/tradoc_159344.pdf; id., Sec. II, Arts. 3 (“Performance Requirements”), 3bis (“Covered Entities”).

101 Chad P. Bown & Jennifer A. Hilmann, WTO'ing a Resolution to the China Subsidy Problem, 22 J. Int'l Econ. L. 557, 564 (2019).

102 Id. at 559, 563, 566, 572 (noting the role that the OECD can play on industrial policies, such as regards the overcapacity problem).

103 Agreement on Safeguards, Arts. 2, 4.2, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1A, 1869 UNTS 14.

104 Alan O. Sykes, The Safeguards Mess: A Critique of WTO Jurisprudence, 2 World Trade Rev. 261 (2003).

105 Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of Certain Dairy Products, para. 80, WTO Doc. WT/DS98/AB/R (adopted Dec. 14, 1999).

106 The Appellate Body did, however, uphold a U.S. China-specific safeguard on tire imports which was permitted during a transition period under China's Protocol of Accession.

107 Daniel K. Tarullo, Beyond Normalcy in the Regulation of International Trade, 100 Harv. L. Rev. 546 (1987).

108 Instead of applying safeguards to protect the steel and aluminum industries, the Trump administration dusted off a statute that had not been used since the 1980s and the Cold War—Section 232 of the 1962 Trade Expansion Act—which permits the raising of tariffs on “national security” grounds. Kathleen Claussen, Trade's Security Exceptionalism, 72 Stan. L. Rev. 1097 (2020).

109 See, e.g., Michael Trebilcock & Sally Wong, Trade, Technology, and Transitions: Trampolines or Safety Nets for Displaced Workers, 21 J. Int'l Econ. L. 509 (2018).

110 The terms “state-owned” and “state-invested” enterprises are used in the Working Group Report linked to China's Protocol of Accession, and in U.S. countervailing duty regulatory practice. See Rep. of the Working Party on the Accession of China, paras. 43–49, WT/ACC/CHN/49 (Oct. 1, 2001). It is also applied in U.S. investigations. Appellate Body Report, United States – Countervailing Duty Measures on Certain Products from China – Recourse to Article 21.5 of the DSU by China, supra note 93, paras. 5.55, 5.2.4 et seq. (discussing definitions in U.S. Department of Commerce memoranda).

111 Gregory Shaffer, Robert Wolfe & Vinhcent Le, Can Informal Law Discipline Subsidies?, 18 J. Int'l Econ. L. 711, 716 (2015).

112 Paragraph 342 of the Working Party Report provides that paragraph 46, among a long list of other “specific matters” in the report are “commitments” that “are incorporated in paragraph 1.2 of the Draft Protocol.” Report of the Working Party on the Accession of China, para. 342, WT/ACC/CHN/49 (Oct. 1, 2001). Paragraph 1.2 of the Accession Protocol, in turn, provides: “This Protocol, which shall include the commitments referred to in paragraph 342 of the Working Party Report, shall be an integral part of the WTO Agreement.” Accession of the People's Republic of China, WT/L/432 (Nov. 23, 2001).

113 Mavroidis & Sapir, supra note 6, at 184–85 (advocating that the rules of the TPP and USMCA be incorporated into the WTO).

114 In contrast, “horizontal” subsidies provided under “objective criteria” “which do not favour certain enterprises over others, and which are economic in nature and horizontal in application” are not specific and consequently not actionable or countervailable. SCM Agreement, supra note 83, Arts. 1.2, 2.

115 See notes 73–78 supra and accompanying text.

116 Accession Protocol of the People's Republic of China, supra note 112, para. 15(b); Zhou, Gao & Bai, supra note 96 (discussing application of this provision).

117 SCM Agreement, supra note 83, Arts. 24–26.

118 Shaffer, Wolfe & Le, supra note 111, at 716.

119 Communication from the United States, Procedures to Enhance Transparency and Strengthen Notification Requirements Under WTO Agreements, 1–2, WTO Doc. JOB/GC/148 (adopted Oct. 30, 2017) (the proposed suspension of benefits includes the right to receive WTO documentation, have access to the WTO website, and have personnel preside over WTO bodies. If non-reporting continues, then it also includes receipt of any WTO training and technical assistance, among other matters); General Council & Council for Trade in Goods, Procedures to Enhance Transparency and Strengthen Notification Requirements Under WTO Agreements, 12(a)(iii), JOB/GC/204/Rev.3, JOB/CTG/14/Rev.3 (Mar. 5, 2020)(proposing designating a member as “a Member with notification delay,” curtailing its right to chair WTO bodies and participate in WTO meetings, coupled, in phase 2, with a fine).

120 Shaffer, supra note 27.

121 EU-China Comprehensive Investment Agreement, supra note 100, Sec. III, Subsec. 2, Art. 8 (“Transparency of Subsidies”); id., Sec. III, Subsec. 2, Art. 8 Annex; id., Sec. II, Art. 3bis, para. 4.

122 Mavroidis & Sapir, supra note 6, at 186, 201.

123 Dan Ciuriak, World Trade Organization 2.0: Reforming Multilateral Trade Rules for the Digital Age, CIGI Policy Brief No. 152 (July 11, 2019) (“The issue for the West, therefore, is not to rein in China's investment support for technology development but to recognize that technological conditions have shifted investment opportunities into a space that suits China's governance model—and to follow it.”); Bjarke Smith-Meyer, Lili Bayer, Jakob Hanke & Ryan Heath, European Officials Draft Radical Plan to Take on Trump and U.S. Tech Companies, Politico (Aug. 22, 2019), at https://www.politico.com/story/2019/08/22/europe-plan-trump-tech-companies-1472326; Todd N. Tucker, Industrial Policy and Planning: What It Is and How to Do It Better, Roosevelt Inst. (July 2019) (report), available at https://rooseveltinstitute.org/wp-content/uploads/2020/07/RI_Industrial-Policy-and-Planning-201707.pdf. On the tradeoffs of public versus private ownership, see Jean-Jacques Laffont & Jean Tirole, A Theory of Incentives in Procurement and Regulation (1993).

124 Dan Prud'homme & Max von Zedtwitz, Managing “Forced” Technology Transfer in Emerging Markets: The Case of China, 25 J. Int'l Mgmt. 1 (2019); U.S.-China Business Council, Best Practices: Intellectual Property Protection in China (2015) available at https://www.uschina.org/sites/default/files/USCBC%20Best%20Practices%20for%20Intellectual%20Property%20Protection.pdf (best practices include keeping vital designs/latest-generation technologies overseas and compartmentalizing design/production processes); U.S. Patent Trademark Office, China IPR Toolkit (Oct. 2019), at https://www.stopfakes.gov/servlet/servlet.FileDownload?file=015t00000005ppG (tips include compartmentalizing the production process, and “keeping vital designs/latest generation technology in the United States”).

125 Dan Prud'homme, 3 Myths About China's IP Regime, Harv. Bus. Rev. (Oct. 24, 2019), at https://hbr.org/2019/10/3-myths-about-chinas-ip-regime.

126 The State Council Info. Office of the People's Republic of China, China's Position on the China-US Economics and Trade Consultations 4, 6 (2019).

127 A GATT case involving Japan in the 1980s created this doctrine. Panel Report, Japan—Trade in Semi-Conductors, supra note 52, paras. 109–17.

128 The rules, for example, prohibited transfers of source code and forced localization of data. Office of the U.S. Trade Rep., Trans-Pacific Partnership Full Text, Art. 14.13, 14.17, available at https://ustr.gov/sites/default/files/TPP-Final-Text-Electronic-Commerce.pdf.

129 Alan O. Sykes, The Law and Economics of “Forced” Technology Transfer (FTT) and its Implications for Trade and Investment Policy (and the U.S.-China Trade War), 13 J. Legal Analysis 127 (2021).

130 Economic and Trade Agreement, China-U.S., supra note 49, ch. 2.

131 EU-China Comprehensive Investment Agreement, supra note 100, Sec. II, Art. 3.

132 Id. Art. 3(3).

133 Report of the Working Party on the Accession of China, supra note 112, para. 49; Weihuan Zhou, Huiqin Jiang & Qingjiang Kong, Technology Transfer Under China's Foreign Investment Regime: Does the WTO Provide a Solution?, 54 J. World Trade 455 (2020) (analyzing China's Foreign Investment Law, Order No. 26 of the President, effective on Jan. 1, 2020).

134 Under GATS Article XVI.2(e), China can commit to remove “measures which restrict or require specific types of legal entity or joint venture through which a service supplier may supply a service,” provided it lists the sector in its schedule of commitments. Investment agreements can include commitments not to require a joint venture, as China agreed for some sectors under its Comprehensive Agreement on Investment with the European Union.

135 Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA), Pub. L. No. 115-232, 132 Stat. 1636, § 1703(a)(5); 31 CFR § 800.214 [hereinafter FIRRMA]; Sarah Bauerle Danzman, Investment Screening in the Shadow of Weaponized Interdependence, in The Uses and Abuses of Weaponized Interdependence 257 (Daniel W. Drezner, Henry Farrell & Abraham L. Newman eds., 2021).

136 The USTR also filed a WTO complaint against China in October 2018 under Article 3 (national treatment) and Article 28 (patent rights) of the TRIPS Agreement, but it suspended the panel as part of settlement negotiations with China, since June 2019. DS542: China — Certain Measures Concerning the Protection of Intellectual Property Rights, at https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds542_e.htm. Mark Cohen notes claims under other TRIPS provisions that also could have been used, such as Articles 39 and 40 respectively regarding trade secrets and anti-competitive practices. Mark Cohen, The WTO IP Cases That Weren't, China IPR (Dec. 11, 2020).

137 Panel Report, United States–Tariff Measures on Certain Goods from China, WTO Doc. WT/DS543/R (adopted Sept. 15, 2020).

138 Chad P. Bown, Euijin Jung & Zhiyao Lu, China's Retaliation to Trump's Tariffs, Peterson Inst. for Int'l Econ. (June 22, 2018) (China's list of retaliatory tariffs released hours after the Trump administration released its list of tariffs).

139 Although WTO rules do not formally prescribe retrospective remedies, they are not used in practice. The United States earlier insisted upon non-retroactivity even after prevailing in a subsidies case against Australia because of the implications for U.S. subsidy programs, including massive U.S. tax subsidies. Gregory Shaffer, Defending Interests: Public-Private Partnerships in WTO Litigation 61–62 (2003) (discussing the Australia-Automotive Leather case).

140 GATT, supra note 88, Art. XXIII; DSU, supra note 51, Art. 22.4.

141 GATT Panel Report, Japan—Trade in Semi-conductors, supra note 52 At the time, the EU was named the European Community.

142 Harlan Grant Cohen, Nations and Markets, 23 J. Int'l Econ. L. 793 (2020).

143 For China, see, e.g., China Issues National Security Rules on Foreign Investment, Reuters (Dec. 19, 2020), at https://www.reuters.com/article/china-investment/china-issues-national-security-rules-on-foreign-investment-idUSKBN28T0FS.

144 On “geoeconomics,” cf. Anthea Roberts, Henrique Choer Moraes & Victor Ferguson, Toward a Geoeconomic Order in Trade and Investment, 22 J. Int'l Econ. L. 655, 657 (2019) (using the term “to describe a macro level change in the relationship between economics and security in the regime governing international trade and investment”).

145 “Smart” manufacturing self-automates, trumpeted in Germany as “Industry 4.0” and in the United States as the “Industrial Internet.” Linking big data, cloud computing, wireless sensor networks, and automated analytic tools with industrial equipment, it makes manufacturing more efficient, more precise, and more responsive. McKinsey Glob. Inst., The Age of Analytics: Competing in a Data-Driven World (Dec. 7, 2016), at https://www.mckinsey.com/business-functions/mckinsey-analytics/our-insights/the-age-of-analytics-competing-in-a-data-driven-world#.

146 See note 48 supra.

147 Dan Ciuriak, A Trade War Fueled by Technology, Ctr. Int'l Governance Innovation (Jan. 11, 2019), at https://www.cigionline.org/articles/trade-war-fuelled-technology.

148 Gregory Shaffer & Henry S. Gao, A New Chinese Economic Order?, 23 J. Int'l Econ. L. 607 (2020).

149 National Security Strategy of the United States of America 17 (Dec. 2017), available at https://trumpwhitehouse.archives.gov/wp-content/uploads/2017/12/NSS-Final-12-18-2017-0905.pdf (citing Donald Trump, “Economic security is national security” as epigraph).

150 Indeed, trade liberalization was viewed as consonant with U.S. national security in the twentieth century. Douglas A. Irwin, Clashing Over Commerce: A History of U.S. Trade Policy (2017); Edward D. Mansfield & Jon C. Pevehouse, Trade Blocs, Trade Flows, and International Conflict, 54 Int'l Org. 775, 775–76 (2000); Claussen, supra note 108, at 1139–40.

151 Huawei, for example, is a major purchaser of U.S. technology and thus there are costs to U.S. companies. To the extent that Huawei develops alternative sources for such technology, the measures will result in a clear net loss for the United States. Chad P. Bown, How Trump's Export Curbs on Semiconductors and Equipment Hurt the US Technology Sector, Peterson Inst. Int'l Econ. (Sept. 28, 2020), at https://www.piie.com/blogs/trade-and-investment-policy-watch/how-trumps-export-curbs-semiconductors-and-equipment-hurt-us.

152 I thank Anthea Roberts for stressing this point.

153 Farrell & Newman, supra note 56. Engineers refer to three types of risks known as CIA: confidentiality, integrity, and availability. Confidentiality refers to data privacy and security. Integrity refers to the ability of a third party to enter and compromise a program or device. Availability refers to the ability to shut down a device or system Yulia Cherdantseva & Jeremy Hilton, A Reference Model of Information Assurance & Security, 2013 Int'l Conf. Availability, Reliability & Security 546–55 (2013).

154 “Critical infrastructure” is a defined term applied by the Committee on Foreign Investment in the United States (CFIUS) under the Defense Production Act, which covers “systems and assets, whether physical or virtual, so vital to the United States that the incapacity or destruction of such systems or assets would have a debilitating impact on national security.” FIRRMA, supra note 135; James K. Jackson, The Committee on Foreign Investment in the United States, Cong. Research Serv., RL33388 (Feb. 14, 2020), at https://crsreports.congress.gov/product/pdf/RL/RL33388/91.

155 Altieri & Della Rocca, supra note 47. The United States intensively lobbied other countries to ban the use of Huawei equipment, and in particular the United Kingdom, threatening to withhold access to security analysis as part of the “Five Eyes” intelligence network. Sam Byford, US Sanctions Make Huawei More of a Security Risk, Says Leaked UK Report, Verge (July 6, 2020), at https://www.theverge.com/2020/7/6/21314340/huawei-5g-networks-security-risk-us-uk.

156 See notes 150–51 supra and accompanying text. For a parallel approach, Dani Rodrik & Stephen Walt, How to Construct a New Global Order, Harv. Kennedy Sch. (Mar. 2021), available at https://drodrik.scholar.harvard.edu/files/dani-rodrik/files/new_global_order.pdf.

157 Nicole Sperling, Trump Officially Orders TikTok's Chinese Owner to Divest, N.Y. Times (Aug. 14, 2020), at https://www.nytimes.com/2020/08/14/business/tiktok-trump-bytedance-order.html; James Andrew Lewis, How Scary Is TikTok?, Ctr. Strategic & Int'l Stud. (July 14, 2020), at https://www.csis.org/analysis/how-scary-tiktok. The Trump administration's ban and coerced sale were challenged in U.S. courts, and then the Biden administration revoked the order. Katie Rogers & Cecilia Kang, Biden Revokes and Replaces Trump Order that Banned TikTok, N.Y. Times (June 9, 2021). FIRRMA nonetheless expanded the coverage of CFIUS to include investments involving “sensitive data on United States citizens” where the investor “may exploit that information in a manner that threatens national security.” FIRRMA, supra note 135, §§ 1702(c)(5), 1703(a)(4)(B)(iii)(III); 31 CFR § 800.248(c).

158 Keith Zhai & Yoko Kubota, China to Restrict Tesla Use by Military and State Employees, Wall St. J. (Mar. 19, 2021).

159 See, e.g., Bruce Schneier, Data and Goliath: The Hidden Battles to Collect Your Data and Your World (2015); Gregory Shaffer, Trade Law in a Data-Driven Economy: The Need for Modesty and Resilience, 20 World Trade Rev. 259 (2021).

160 Anupam Chander, Is Data Localization a Solution for Schrems II?, 23 J. Int'l Econ. L. 771 (2020).

161 Rachel Brewster, The Trump Administration and the Future of the WTO, 44 Yale J. Int'l L. Online 1, 9–10 (2018) (Trump administration use of national security rational unprecedented, and its unilateralism “represents a full-throated rejection of the WTO's rule of law norms.”).

162 For excellent analyses of this exception, see J. Benton Heath, The New National Security Challenge to the Economic Order, 129 Yale L.J. 924, 1020 (2020); Mona Pinchis-Paulsen, Trade Multilateralism and U.S. National Security: The Making of the GATT Security Exceptions, 41 Mich. J. Int'l L. 109 (2020).

163 Panel Report, Russia—Measures Concerning Traffic in Transit, WTO Doc. WT/DS512/R (adopted Apr. 26, 2019) (defining “essential security interests”). In the case between Qatar and Saudi Arabia, the panel found that Saudi interference in the ability of a Qatar company to seek civil enforcement measures fell within the national security exception under Article 73 of the TRIPS Agreement, while its non-application of criminal procedures and penalties against an infringer did not. Panel Report, Saudi Arabia—Measures Concerning the Protection of Intellectual Property Rights, paras. 7.294, 8.1, WTO Doc. WT/DS567/R (adopted June 16, 2020), at https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/WT/DS/567R.pdf&Open=True.

164 Regional Comprehensive Economic Partnership (RCEP), Art. 17.13 (signed Nov. 15, 2020), available at https://rcepsec.org/wp-content/uploads/2020/11/All-Chapters.pdf.

165 Agreement Between the United States of America, the United Mexican States, and Canada, Art. 32.2 (July 1, 2020), available at https://ustr.gov/sites/default/files/files/agreements/FTA/USMCA/Text/23%20Labor.pdf [hereinafter USMCA].

166 Rodrik and Walt compare the much more transparent UK decision regarding risks with the less transparent U.S. approach under CFIUS. Rodrik & Walt, supra note 156, at 24 (citing Annual Report, Huawei Cyber Security Evaluation Centre Oversight Board (Sept. 2020), available at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/923309/Huawei_Cyber_Security_Evaluation_Centre__HCSEC__Oversight_Board-_annual_report_2020.pdf).

167 Simon Lester & Inu Manak, A Proposal for Committee on National Security at the WTO, 30 Duke J. Comp. & Int'l L. 267 (2020); Heath, supra note 162, at 1066–80 (providing an overview of alternative institutional mechanisms, including the above).

168 Article 5 of the WTO Dispute Settlement Understanding provides for “good offices, conciliation and mediation.” DSU, supra note 51.

169 Gregory Shaffer & Joel Trachtman, Interpretation and Institutional Choice at the WTO, 52 Va. J. Int'l L. 1 (2011). See, e.g., Appellate Body Report, United States–Continued Suspension of Obligations in the EC–Hormones Dispute, para. 590, WTO Doc. WT/DS320/AB/R (adopted Oct. 16, 2008) (“The review power of a panel is not to determine whether the risk assessment undertaken by a WTO Member is correct, but rather to determine whether that risk assessment is supported by coherent reasoning and respectable scientific evidence and is, in this sense, objectively justifiable.”); Appellate Body Report, United States – Countervailing Duties on Dynamic Random Access Memory Semiconductors (DRAMS) from Korea, para. 186, WTO Doc. WT/DS296/AB/R (adopted June 27, 2005) (“We are of the view that the ‘objective assessment’ to be made by a panel reviewing an investigating authority's subsidy determination will be informed by an examination of whether the agency provided a reasoned and adequate explanation as to: (i) how the evidence on the record supported its factual findings; and (ii) how those factual findings supported the overall subsidy determination.”).

170 Simon Lester & Huan Zhu, A Proposal for “Rebalancing” to Deal with “National Security” Trade Restrictions, 42 Fordham Int'l L.J. 1451 (2019). Another option is that non-traditional national security concerns could be addressed by other GATT exceptions that provide for greater judicial oversight, such as GATT Article XX(b) regarding the protection of human life and health, instead of GATT Article XXI. Heath, supra note 162 (noting the EU's position in this respect).

171 Lamp, supra note 88, at 723 (noting U.S. apparent acceptance of this alternative).

172 Ministry Of Commerce People's Republic of China, Order No.1 of 2021 on Rules on Counteracting Unjustified Extra-Territorial Application of Foreign Legislation and Other Measures (Jan. 9, 2021), at http://www.mofcom.gov.cn/article/b/c/202101/20210103029710.shtml (Chinese), http://english.mofcom.gov.cn/article/policyrelease/questions/202101/20210103029708.shtml (English) [hereinafter Chinese Blocking Statute].

173 See the EU Blocking Statute, Supplemented by the Re-imposed Iran Sanctions Blocking Regulation. Council Regulation 2271/96, 1996 OJ (L 309) 1 (EC); Commission Delegated Regulation 2018/1100, 2018 OJ (L 1991) 1 (EU).

174 Chinese Blocking Statute, supra note 172, Art. 7.

175 Id. Art. 9.

176 Tim Wu, A TikTok Ban is Overdue, N.Y. Times (Aug. 18, 2020), at https://www.nytimes.com/2020/08/18/opinion/tiktok-wechat-ban-trump.html.

177 Nadège Rolland, China's Eurasian Century? Political and Strategic Implications of the Belt and Road Initiative 5–6 (2017); cf. Wang Yi, State Councilor, Righting the Wrongs and Committing to Mutual Respect and Win-Win Cooperation (Feb. 22, 2021), at https://www.fmprc.gov.cn/mfa_eng/zxxx_662805/t1855510.shtml (accusing the United States of “smearing the CPC and China's political system”); Rodrik & Walt, supra note 156, at 20 (“Alternative political systems can pose a threat merely by existing, because their presence offer an alternative model that might inspire reformers or rebels inside the rival society. This problem will be especially challenging when a political order is based on universalist principles.”).

178 Tom Ginsburg, Authoritarian International Law?, 114 AJIL 221 (2020).

179 China aims to “break the Western moral advantage” and to focus on “development rights,” which implicitly takes account of its successful developmental model. Rolland, supra note 177, at 35 (citing Li Ziguo).

180 On U.S. law in relation to international labor rights, see Lance A. Compa, Trump, Trade and Trabajo: Renegotiating NAFTA's Labor Accord in a Fraught Political Climate, 26 Ind. J. Glob. Legal Stud. 263, 287–89 (2019). On the decline of U.S. labor law protections, see Cynthia L. Estlund, The Death of Labor Law?, 2 Ann. Rev. L. Soc. Sci. 105 (2006); Katherine V.W. Stone, A Labor Law for the Digital Era: The Future of Labor and Employment Law in the United States, in Encyclopedia of Labor and Employment Law and Economics 689 (Kenneth G. Dau-Schmidt, Seth D. Harris & Orly Lobel eds., 2008); Harris Freeman, In the Shadow of Anti-Labor Law: Organizing and Collective Bargaining 60 Years After Taft-Hartley, 11 Working USA: J. Labor & Soc'y 1 (2008).

181 Kevin Kolben, Labor Rights as Human Rights?, 50 Va. J. Int'l L. 449 (2010).

182 Id. Cf. Michael J. Trebilcock & Robert Howse, Trade Policy & (and) Labor Standards, 14 Minn. J. Glob. Trade 261, 300 (2005) (attempt to ensure respect for core labor standards conceived of as universal human rights)

183 Singapore Ministerial Declaration, par. 4, WTO Doc. WT/MIN(96)/DEC (Dec. 13, 1996), at https://www.wto.org/english/thewto_e/minist_e/min96_e/wtodec_e.htm#core_labour_standards.

184 Int'l Labor Org. [ILO], Declaration on Fundamental Principles and Rights at Work (June 15, 2010), at https://www.ilo.org/declaration/lang--en/index.htm (for text, background, and annual follow up); Philip Alston, “Core Labour Standards” and the Transformation of the International Labour Rights Regime, 15 Eur. J. Int'l L. 457, 521 (2004) (stressing what must be done for the regime not to be a “façade”). Taiwan, Hong Kong, Macao, and the European Union are WTO members but not members of the ILO.

185 The exceptions applying to environmental concerns, such as GATT Articles XX(b) and XX(g), are more specific and have generated considerable jurisprudence, as well as scholarly commentary. Robert Howse, The World Trade Organization 20 Years On: Global Governance by Judiciary, 27 Eur. J. Int'l. L. 9 (2016). In particular, scholars have assessed their application to trade measures, such as border tax adjustments, that form part of a comprehensive policy to reduce global warming. See, e.g., Joost Pauwelyn, Carbon Leakage Measures and Border Tax Adjustments Under WTO Law, in Research Handbook on Environment, Health and the WTO 448 (Geert Van Calster & Denise Prévost eds., 2013).

186 Dire Tladi, Fourth Report on Peremptory Norms of General International Law (Jus Cogens), 42–46, UN Doc. A/CN.4/727 (Jan. 31, 2019); Barcelona Traction, Light and Power Company, Limited, Judgment (Belg. v. Spain), Second Phase, Judgment,1970 ICJ Rep. 3, para. 34 (Feb. 5) (erga omnes obligations include “protection from slavery and racial discrimination”).

187 Gregory Shaffer & David Pabian, European Communities – Measures Prohibiting the Importation and Marketing of Seal Products, 109 AJIL 154 (2015).

188 U.S. Customs & Border Prot. Press Release, CBP Issues Region-Wide Withhold Release Order on Products Made by Slave Labor in Xinjiang (Jan. 13, 2021), at https://www.cbp.gov/newsroom/national-media-release/cbp-issues-region-wide-withhold-release-order-products-made-slave. In the case of prison labor, GATT Article XX(e) would apply as well. This provision also potentially could be invoked against U.S. practices. Cf. Beth Van Schaack, Policy Options in Response to Crimes Against Humanity and Potential Genocide in Xinjiang, Just Security (Aug. 25, 2020), at https://www.justsecurity.org/72168/policy-options-in-response-to-crimes-against-humanity-and-potential-genocide-in-xinjiang; Lan Cao, Made in the USA: Race, Trade, and Prison Labor, 43 N.Y.U. Rev. L. & Soc. Change 1, 6–7 (2019).

189 USMCA, supra note 165; cf. Alvaro Santos, The Lessons of TPP and the Future of Labor Chapters in Trade Agreements, in Megaregulation Contested: Global Economic Ordering After TPP 140 (Benedict Kingsbury, et al. eds., 2019) (noting how the TransPacific Partnership built from earlier agreements, adding commitments regarding minimum wages, hours of work, occupational health and safety, forced labor, and corporate social responsibility).

190 Under the agreement with South Korea, the European Union successfully challenged South Korea's labor laws and practices regarding the freedom of association and right to collective bargaining. Report of the Panel of Experts Proceeding Constituted Under Article 13.5 of the EU-Korea Free Trade Agreement (Jan. 20, 2021), available at https://trade.ec.europa.eu/doclib/docs/2021/january/tradoc_159358.pdf; Eur. Comm'n Press Release, Panel of Experts Confirms Repub. of Kor. is in Breach of Labour Commitments Under Our Trade Agreement (Jan. 25. 2021), at https://trade.ec.europa.eu/doclib/press/index.cfm?id=2238.

191 Shaffer, supra note 27 (developing a more detailed proposal); see also Mark Barenberg, Sustaining Workers’ Bargaining Power in an Age of Globalization (Econ. Pol'y Inst., Briefing Paper No. 246, Oct. 9, 2009), available at https://files.epi.org/page/-/pdf/bp246.pdf.

192 A minimum wage, for example, would have to be set near the market clearing rate, which will vary not only by country, but also within countries. Countries should thus have discretion in setting a minimum wage, which may vary within them in light of differing labor market conditions.

193 Cf. Agreement on Implementation of Article VI of GATT 1994, Art. 5.4, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1A, 1868 UNTS 201 [hereinafter Anti-Dumping Agreement] (setting criteria for assessing support of the domestic industry producing a like product).

194 Discussion with former official at USTR who worked on the case where the United States challenged Guatemala under the U.S.-Central America Free Trade Agreement (CAFTA), Mar. 1, 2018; Final Panel Report, In the Matter of Guatemala – Issues Relating to Obligations under Article 16.2.1(a) of CAFTA-DR (June 14, 2017), available at https://legacy.trade.gov/industry/tas/Guatemala%20%20%E2%80%93%20Obligations%20Under%20Article%2016-2-1(a)%20of%20the%20CAFTA-DR%20%20June%2014%202017.pdf.

195 Article 23.5. of the USMCA, for example, provides: “For purposes of dispute settlement, a panel shall presume that a failure is in a manner affecting trade or investment between the Parties, unless the responding Party demonstrates otherwise.” USMCA, supra note 165. The focus thus would be on the existence of labor rights violations, coupled with a rise in imports relative to domestic production, and injury to a domestic industry.

196 A form of special safeguard was included in China's Accession Protocol, but that provision expired in December 2013. Accession of the People's Republic of China; Decision of 10 November 2001, para. 16, WTO Doc. WT/L/432 (adopted Nov. 23, 2001) (“Transitional Product-Specific Safeguard Provision”), at https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=Q:/WT/L/432.pdf&Open=True.

197 Compare “constructive remedies” made pursuant to Article 15 of the WTO Anti-Dumping Agreement (“It is recognized that special regard must be given by developed country Members to the special situation of developing country Members when considering the application of anti-dumping measures under this Agreement. Possibilities of constructive remedies provided for by this Agreement shall be explored before applying anti-dumping duties where they would affect the essential interests of developing country Members.”) with Article 8 of that agreement (which permits for the suspension or termination of measures “upon receipt of satisfactory voluntary undertakings from any exporter to revise its prices… so that the authorities are satisfied that the injurious effect of the dumping is eliminated”). Anti-Dumping Agreement, supra note 193.

198 Compare USMCA, supra note 165, with North American Free Trade Agreement, Can.-Mex.-U.S., Art. 1904.5, Dec. 17, 1992, 32 ILM 289 [hereinafter NAFTA], and David A. Gantz, Resolution of Trade Disputes Under NAFTA's Chapter 19: The Lessons of Extending the Binational Panel Process to Mexico, 29 L. & Pol'y Int'l Bus. 297, 298 (1998).

199 USMCA Article 31-B.11 provides for such a right under the USMCA, supra note 165. (“If one Party considers that the other has not acted in good faith in its use of this Mechanism, either with regard to an invocation of the Mechanism itself or an imposition of remedies that are excessive in light of the severity of the Denial of Rights found by the panel, that Party may have recourse to the dispute settlement mechanism under Chapter 31.”).

200 See Int'l Labor Org [ILO], Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy (Mar. 2017), available at https://www.ilo.org/wcmsp5/groups/public/---ed_emp/---emp_ent/---multi/documents/publication/wcms_094386.pdf; John West, Multistakeholder Diplomacy at the OECD, in Multistakeholder Diplomacy: Challenges and Opportunities 149 (Kishan S. Rana, et al. eds., 2006), at https://www.diplomacy.edu/sites/default/files/Multistakeholder+Diplomacy_Part10.pdf.

201 USMCA, supra note 165, Art. 31, Annex 31-A; Kathleen Claussen, Trade's Experimental Compliance Mechanisms, in International Economic Dispute Settlement: Demise or Transformation? (Manfred Elsig, Rodrigo Polanco & Peter van den Bossche eds., 2021). The process, however, is asymmetric, favoring the United States. For a “claim” to be brought against the United States, there must be an alleged denial of workers’ rights “under an enforced order” of the National Labor Relations Board, while a claim can be brought against Mexico in the event of any alleged denial of workers’ rights “under legislation that complies with Annex 23-A” (i.e., Mexico's commitment to revise its labor law to protect collective bargaining rights). Nonetheless, Mexican migrant women filed the first complaint filed under the USMCA for sex-based discrimination by the United States. Mexican Migrant Women File First USMCA Labor Complaint Against the U.S., World Trade Online (Mar. 24, 2021), at https://insidetrade.com/daily-news/mexican-migrant-women-file-first-usmca-labor-complaint-against-us.

202 The first U.S. challenge involved a union vote at a General Motors plant in Mexico. Madeleine Ngo, Mexico to Allow Union Vote at G.M. Plant After U.S. Complaint, N.Y. Times (July 10, 2021), at https://www.nytimes.com/2021/07/08/us/politics/mexico-to-allow-union-vote-at-gm-plant-after-us-complaint.html.

203 USMCA, supra note 165, Art. 31-A.10.1 (“remedy . . . that is proportional to the severity of the Denial of Rights”).

204 EU-China Comprehensive Investment Agreement, supra note 100, Sec. IV.

205 Rodrik & Walt, supra note 156, at 13.

206 Cf. Jack Goldsmith & Eric Posner, The Limits of International Law (2005) (Chapter 6 on the role of “talk” in different contexts); Ian Hurd, How to Do Things with International Law 11 (2017) (“lawfare is better seen as the typical condition of international law”); Ingo Venzke, How Interpretation Makes International Law: On Semantic Change and Normative Twists 37 (2012) (“semantic struggles”).

207 The UN Security Council does have institutional authority in the area of jus ad bellum, but both the United States and China hold veto rights over proposed resolutions.

208 Shaffer & Trachtman, supra note 169 (laying out a range of institutional options).

209 Christina Lynn Davis, Why Adjudicate? Enforcing Trade Rules in the WTO (2012).

210 The Trump administration forced the WTO trade dispute settlement system to revert to its less judicialized roots under the GATT by blocking the selection of new Appellate Body members after each one's term expired. Since then, many WTO members, including the United States, have effectively exercised veto rights by appealing any adverse panel decision to a non-existent appellate process, and thus “into the void.” Joost Pauwelyn, WTO Dispute Settlement Post 2019: What to Expect? What Choice to Make?, 22 J. Int'l Econ. L. 297 (2019).

211 The interpretive principle instructs panels to decide “more leniently in case of doubt.” Luigi Crema, In Dubio Mitius, Oxford Public International Law (2019), at https://opil.ouplaw.com/view/10.1093/law-mpeipro/e2678.013.2678/law-mpeipro-e2678.

212 The Appellate Body noted the principle of in dubio mitius in the EC-Hormones case. Appellate Body Report, EC Measures Concerning Meat and Meat Products, para. 165, n. 154, WTO Doc. WT/DS26/AB/R, WT/DS48/AB/R (adopted 16 January 1998).

213 Informal Process on Matters Related to the Functioning of the Appellate Body—Report by the Facilitator, H.E. Dr. David Walker (New Zealand), WTO Doc. JOB/GC/222 (Oct. 15, 2019), at https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S009-DP.aspx?language=E&CatalogueIdList=257689; Draft Decision, Functioning of the Appellate Body, WTO Doc. WT/GC/W/791 (Nov. 28, 2019), available at https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/WT/GC/W791.pdf; Communication from the European Union, China, Canada, India, Norway, New Zealand, Switzerland, Australia, Republic of Korea, Iceland, Singapore and Mexico to the General Council, WTO Doc. WT/GC/W/752 (Nov. 26, 2018), at https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S009-DP.aspx?language=E&CatalogueIdList=249918&CurrentCatalogueIdIndex=0&FullTextHash=371857150&HasEnglishRecord=True&HasFrenchRecord=True&HasSpanishRecord=True (proposal of amendments to the DSU in response to U.S. concerns in order to relaunch the process of filling vacancies in the Appellate Body).

214 Judith Hippler Bello, The WTO Dispute Settlement Understanding: Less is More, 90 AJIL 416, 417 (1996) (“The WTO substantially improved the GATT rules for settling disputes but did not alter the fundamental nature of the negotiated bargain among sovereign member states. . . . [A member] may choose to make no change in its law or measures and decline to provide compensation, and, instead, suffer likely retaliation against its exports authorized by the WTO for the purpose of restoring the balance of negotiated concessions.”); Warren F. Schwartz & Alan O. Sykes, The Economic Structure of Renegotiation and Dispute Resolution in the WTO/GATT System, 31 J. Legal Stud. 179 (2002) (on concept of “efficient breach”). Where there is disagreement, the amount of retaliation is determined by arbitration under DSU Articles 21 and 22. This legal process helps to constrain the amount of tit-for-tat retaliation.

215 The appropriate balance in the roles of international and domestic political and judicial processes in trade relations has long been subject to debate. Claus-Dieter Ehlermann & Lothar Ehring, The Authoritative Interpretation Under Article XI:2 of the Agreement Establishing the World Trade Organization: Current Law, Practice and Possible Improvements, 8 J. Int'l Econ. L. 803 (2005); Joost Pauwelyn, The Transformation of World Trade, 104 Mich. L. Rev. 1 (2005); Shaffer, A Tragedy , supra note 35, at 45 (“only alternative for rebalancing is thus some retrenchment of judicial authority”). For a broader argument regarding the “tradeoffs between form and substance,” see Kal Raustiala, Form and Substance in International Agreements, 99 AJIL 581, 614 (2005).

216 DSU, supra note 51, Arts. 16.4 (for panel reports), 17.14 (for Appellate Body reports).

217 Marrakesh Agreement Establishing the World Trade Organization, Art. IX, para. 2, Apr. 15, 1994, 1867 UNTS 154.

218 Petros C. Mavroidis, No Outsourcing of Law? WTO Law as Practiced by WTO Courts, 102 AJIL 421, 429 (2008) (“Although this option has never been used, the WTO membership can, by virtue of Article IX:2 of the WTO Agreement, adopt interpretations of that Agreement—primary law—by a three-fourths majority, assuming no consensus has been reached.”).

219 For an early proposal in this vein, see Claude Barfield, Free Trade, Sovereignty, Democracy: The Future of the World Trade Organization (2001); see also Robert McDougall, Crisis in the WTO: Restoring the WTO Dispute Settlement Function 20 (2018).

220 See Part V.2 supra.

221 Statute of the International Court of Justice, Art. 36(2), 33 UNTS 993 (adopted June 26, 1945), at https://www.icj-cij.org/en/statute (compulsory jurisdiction by deposited state declaration “in relation to any other state accepting the same obligation”).

222 The WTO Multi-party Interim Appeal Arrangement Gets Operational, Eur. Comm'n (Aug. 3, 2020), at https://trade.ec.europa.eu/doclib/press/index.cfm?id=2176#:~:text=The%20WTO%20multi%2Dparty%20interim%20appeal%20arrangement%20gets%20operational,-On%2031%20July&text=It%20shows%20that%20participating%20WTO,system%20with%20an%20appeal%20function.

223 Bernard M. Hoekman & Petros C. Mavroidis, To AB or Not to AB: Dispute Settlement in WTO Reform, 23 J. Int'l Econ. L. 1, 7–9 (2020).

224 Cf. Mavroidis & Sapir, supra note 6, at 153 (need to bring China “closer to ‘Western’ habits”); Henry Gao, Rethinking China Trade Policy: Lessons Learned and Options Ahead (Nat'l Found. for Am. Pol'y Brief, Jan. 2021), at https://www.wita.org/atp-research/rethinking-china-trade-policy (“The proposed rules should be neutral” and the negotiations should “not be one-sided with a long list of demands on China,” but they should be reciprocal. They also should show a clear understanding of “China's own reform goals and policy movements” to see what is feasible.).

225 Shaffer, supra note 20.

226 See, e.g., Yeling Tan, Disaggregating “China, Inc.”: The Hierarchical Politics of WTO Entry, 53 Comp. Pol. Stud. 2118 (2020).

227 That would be a Schmittian world, in reference to the work of the Nazi legal theorist Schmitt, Carl. Carl Schmitt, Political Theology: Four Chapters on the Concept of Sovereignty (George Schwab trans., 2005; 1922)CrossRefGoogle Scholar. Ironically, Schmitt has become popular among “new left,” Maoist-oriented, authoritarian/statist scholars within China. Veg, Sebastian, The Rise of China's Statist Intellectuals: Law, Sovereignty, and “Repoliticization,” 82 China J. 23 (2019)CrossRefGoogle Scholar. The parallels reflect a new form of transnational legal ordering.