The WTO toolkit in regulating interstate trade and economic cooperation

Abstract

Purpose. To determine the idea and efficiency of the WTO toolkit as a resource to prevent and regulate trade disputes arising in the process of interstate trade and economic cooperation.Methodology. Methods of analysis and synthesis, used to systemize data concerning inflow of notifications and applications, intended to regulate trade disputes within the WTO during 1995-2018, have become a methodological basis of the research. For malization of criteria of the WTO toolkit efficient use is implemented with the help of mathematical modeling method; and a method of static analysis is applied to support a rising linear trend in the context of the dynamics of annual number of the WTO notifications during 1995-2018.findings. The defining role by the WTO in the process of interstate trade and economic cooperation is substantiated. It is dem onstrated that minimization of the number of interstate disputes in the trade sphere as well as their intensity degree is the objective of the WTO toolkit use. The idea of notification system and mechanism to regulate trade disputes as the key components of the toolkit preventing them within the WTO is considered. An efficiency criterion of the WTO notification system as the increased number of the applied notifications is identified; its execution during 1995-2018 is confirmed. Both static and dynamic criteria of the efficiency of the mechanism, resolving trade disputes by the WTO, are proposed. Prevailing execution of the static criterion is supported which speaks for the efficiency of the mechanism to regulate disputes as the tool of the WTO global trade. Nonexecution of the dynamic criterion is demonstrated which may be interpreted as a lack of cumulative effect by the accumulated practices in tended to regulate trade disputes. Complex criterion of the WTO toolkit efficient use is proposed; its execution during 1995-2018 is analyzed. Priority tendencies to regulate interstate trade and economic cooperation on the part of the WTO are determined. originality. For the first time, methodological approach to evaluate efficiency of the WTO toolkit as a resource to regulate in terstate trade and economic cooperation has been proposed. The approach is based upon the following: substantiation of such ef ficiency criteria use for trade protection as a notification system and a mechanism to regulate trade disputes by the WTO; formation of a complex efficiency criterion to apply for regulation of trade disputes by the WTO; formulation of complex criterion of efficient use of the WTO tools; determination of quantative equivalents of the proposed criteria, and analysis of their execution during 1995-2018.Practical value. The proposed methodological approach may be applied to evaluate efficiency of the WTO toolkit concerning the global trade regulation as for the prevention and negotiation of interstate trade disputes.

Socio-economic and management concepts

“…According to UNCTAD experts estimation [458], the current crisis caused by the impact of COVID-19 has global nature and affects all spheres of life on the planet. It can accelerate the processes of structural transformation of international manufacturing in the next decade.…”

“…As of 2019, approximately one third of the world trade is proceeded through GVCs, in which the production process crosses at least one border and, as a rule, many borders more [458]. Over the past two decades, the phenomenal growth of trade related to GVCs has led to significant economic growth in many countries around the world, which has contributed to reduced transport and communication costs, lower trade barriers.…”

“…As a result, for the first time since 2005, FDI are to be less than $ 1 trillion. It is projected that in 2021 FDIs are to decline by another 5-10% and will start to recover in 2022 [458]. The relative growth rates of royalties and license fees over the past five years (almost 5 percent per year) compared to trade in foreign direct investment (less than 1 percent per year) have shown the way of international manufacture shift from cross-border production networks to non-equity models of value initiation.…”

“…Emphasizing on the prospects for the development of non-equity models of international businesses of both Philippine and other Asian manufacturers through global production and sales networks, it should be noted that they are to correspond to the logic of transformation of global production and sales networks [468]. UNCTAD experts attribute their further development to the reduction of GVCs, increasing the concentration of value added in some particular countries that demonstrate the most attractive conditions, and reducing the capital intensity of industries that develop both through the format of investment-equity relations and non-equity models of international cooperation [458].…”