East Asia's engagement with cosmopolitan ideals under its trade treaty dispute provisions.

• Author: Lim, C.L.

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 capture or prescribe the actual treaty behaviour of these nations. Instead, such behaviour has resulted in the emergence of two different treaty models for the peaceful settlement of trade disputes. The fixat, which seems firmly established, may be found in ASEANTs 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 approach; one which better accommodates greater transparency in dispute proceedings. At least for now, the two models coexist, obviating the need for East Asia's legal policy-makers to choose a clear, dominant design for treaty-based trade dispute settlement in the region. But it also means that East Asia's trading partners can influence East Asian nations, at least in those trade agreements that--like the Trans-Pacific Partnership Agreement--involve negotiations with transcontinental partners.

Un point de vue est-asiatique sur la conception des systemes de reglement des differends commerciaux emerge lentement. Les ecrits academiques d'inspiration democratique traitant du droit commercial ainsi que les explications culturelles du comportement des pays de l'Asie du Sud-Est et du Nord-Est en matiere de droit international n'arrivent ni a cerner, ni a prescrire leur comportement reel en matiere de traites. Ce comportement a plutot mene a l'emergence de deux modeles de traites differents pour la resolution pacifique des differends commerciaux. Le premier, qui semble solidement etabli, se trouve dans le protocole de resolution des differends de l'AN ASE de 2004 ainsi que dans les regimes etablis sous les accords de libre-echange (ALE) Chine-ANASE, CoreeANASE, Japon-ANASE et AN ASE-Australie-NouvelleZelande. Un second modele, celui-ci base sur l'Accord de partenariat economique strategique transpacifique (APEST), pourrait eventuellement devenir un modele d'ALE alternatif qui couvrirait toute l'Asie-Pacifique (i.e. y compris les pays de l'Asie de l'Est qui en font partie). Ce modele adopte une approche plus ouverte qui favorise mieux la transparence lors des procedures relatives aux conflits. Pour l'instant, les deux modeles coexistent. Cela fait en sorte que les responsables des politiques juridiques de l'Asie de l'Est n'ont pas a choisir de modele clair et dominant pour la resolution, par l'entremise de traites, des differends commerciaux dans la region. Neanmoins, cela signifie aussi que les partenaires commerciaux de l'Asie de l'Est peuvent exercer de l'influence sur les pays est-asiatiques, du moins quand il est question d'accords commerciaux qui, comme l'APEST. comprennent des negociations avec des partenaires transcontinentaux.

Introduction I. Five Arguments for Greater Transparency in Trade Dispute Settlement A. Is There a World Trade Court? 1. A Judicial System? 2. Still a Diplomatic Body B. Is There a Trend Toward Greater Transparency? C. Democracy as Ideal D. A Heightened Search for Legitimacy Through Cosmopolitan Engagement E. The Need to Pursue Democratically Coherent Trade Policies II. Settling East Asian Trade Disputes A. Asia and the International Settlement of Disputes 1. Studying East Asia's Regional Trade Treaties B. ASEAN C. Trade Dispute Settlement in ASEAN's Agreements 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 die Existence of a Dispute Confidential D. Enter the United States, and die Trans-Pacific Strategic Economic Partnership Agreement III. Analytical Limitations of the "Cultural" Explanation Conclusion 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 dispute settlement design, especially in light of the debate on increasing the transparency of WTO dispute settlement? Should trade dispute proceedings be open to the public, and should arbitral tribunals and panels receive unsolicited amici curiae briefs? East Asia--comprising the Northeast and Southeast Asian sub-regions--deserves our attention because this vast region promises to be a melting pot of ideas about trade rule design 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 Australia's FTAs, have been more equivocal and have adopted both transparent and closed regimes. This, presumably, is a result of individual negotiating dynamics and possibilities as much as it involves questions about Australia's 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 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 Geneva's dispute settlement system (e.g., regarding public submissions, open proceedings, and amici curiae briefs). They argue that transparency threatens the intergovernmental 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 likelihood of greater transparency in East Asian trade dispute settlement design as these nations begin to integrate their economies between themselves, and also with their trading partners within the broader AsiaPacific 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 settlement, and the limited success of democratic arguments thus far in modifying the treaty behaviour of these nations. Democratically informed scholarship is more likely to have an impact on East Asia's 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 diplomatic and trade treaty-related behaviour of a number of Western trading nations. As we will go on to see, the United States and the European Union have championed greater transparency in WTO trade dispute settlement.

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 transcontinental deals with Western nations. Taken alongside East Asia's own "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 beliefs within East Asian policy circles. East Asia's own closed model is almost 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, cosmopolitanism is something more than a convenience.

1. 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 relies on the fact that the WTO's dispute settlement system already resembles 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 domestically and internationally, are both public and transparent. (11) Insofar as many East Asian RTAs have adopted the WTO as a "benchmark", these 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 system--whether the WTO...