General Issue
Vol. XVI, No. 2
(Summer '25)
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Carbon Markets, International Trade, and Climate Finance
Rafael Leal-Arcas, Aosama Alghamdi, Mohammed Alharethi & Marya Aldoukhi
This study explores the intersection of carbon markets, climate finance, and trade mechanisms such as Carbon Border Adjustment Mechanisms (CBAMs) to advance global climate goals under equitable and transparent governance. Part I highlights the potential of carbon markets to support climate action under Article 6 of the Paris Agreement, emphasising the need for robust rules, capacity-building, digital innovation, and alignment with Sustainable Development Goals (SDGs). These measures could accelerate technology diffusion, finance mobilisation, and progress toward net-zero economies, fostering a just and sustainable future. Part II examines the integration of CBAMs with climate finance, suggesting that directing CBAM revenues to climate adaptation and mitigation in developing countries aligns with the principle of common but differentiated responsibilities. This approach can transform CBAMs from trade barriers to tools for equitable emissions reduction, strengthening global collaboration and economic fairness. However, implementation challenges such as administrative costs, trade impacts, and compliance for carbon-intensive economies require phased and inclusive strategies. Finally, Part III underscores the risks of CBAMs, questioning their environmental efficacy, political feasibility, and compatibility with trade agreements. The study concludes that equitable governance and innovative public- private partnerships are essential to harmonise trade, finance, and climate objectives, ensuring a resilient and inclusive low-carbon future.
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WTO Rules on State-Owned Enterprises Revisited: Balancing Fair Competition and Institutional Diversity
Pallavi Arora
This paper examines World Trade Organization (WTO) rules on state-owned enterprises (SOEs) and their role in balancing fair competition with institutional diversity. Recent reform efforts, particularly in agreements like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), advocate for competitive neutrality as a means to discipline SOEs. However, this paper argues that the WTO’s ownership-neutral approach— based on non-discrimination, market access, and subsidy rules—provides a more effective and flexible framework for regulating SOEs while respecting institutional diversity. It contends that competitive neutrality disciplines, which impose antitrust and stricter subsidy rules on SOEs, risk constraining state-led economic strategies and disregarding the diverse market structures of WTO members. To support this argument, the paper examines how the WTO accommodates varied economic models while addressing trade distortions through interface mechanisms.
A key aspect of the analysis is the regulation of SOEs under WTO subsidy rules, particularly the definition of “public body”. The paper defends the Appellate Body’s ‘governmental authority test’ as a balanced approach that accounts for different state-market relationships. However, to improve and ensure consistent application of the government authority test, the paper proposes refining it by introducing a non-exhaustive list of indicators to assess governmental authority. Additionally, the paper examines how WTO rules address monopoly rights and regulatory advantages granted to SOEs, arguing that the WTO’s existing non-discrimination and market access disciplines already provide effective tools to prevent competition distortions. The analysis further considers China’s WTO-plus obligations, demonstrating that these commitments offer additional flexibility to regulate Chinese SOEs without the need for competitive neutrality-based reforms.
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The paper concludes that rather than pursuing competitive neutrality reforms that could undermine institutional diversity, the WTO should focus on strengthening its existing interface mechanisms. Targeted improvements—such as refining subsidy disciplines and clarifying non-discrimination norms—can enhance the WTO’s ability to manage SOE-related trade distortions while preserving policy space for diverse economic models.
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Human Rights Implications of Digital Trade Law
Mira Burri
Digital trade law has become one of the most dynamic fields of international law, as individual states and the global community have engaged in creating a new, albeit fragmented, rule-framework for the data-driven economy. This has unfolded almost exclusively through bilateral and regional trade agreements that regulate the digital economy by devising specific and at times far-reaching rules on non-discrimination of digital products, source code and cross-border data flows, to name but a few. Many of these economically driven provisions and the changes that they trigger in domestic regulatory regimes have serious human rights implications. Some of the tensions, in particular around personal data protection, have found reflection in policy and academic discussions. The implications for other human rights have been, however, often ignored. It is the article’s objective to address this gap. First, by providing a detailed analysis of the current digital trade law framework, advanced through far-reaching treaties, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the United States-Mexico-Canada Agreement (USMCA) and the new generation of Digital Economy Agreements (DEAs). Second, by exploring the human rights implications ofselected provisions in more detail, starting with the more conventional discussion ofprivacy and then freedom of speech, and moving towards the less explored interfaces with development. The article’s overall enquiry seeks to feed into a more nuanced discussion of digital trade regulation and towards better interfacing of digital trade law with human rights.
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Whether and How Amicus Curiae Can Promote Democracy in the DSM
Yifan Li
To address the “democratic deficit” within the World Trade Organization (WTO) and its Dispute Settlement Mechanism (DSM), the introduction of amicus curiae is proposed as a means for non-state actors to contribute their perspectives to WTO adjudicators. This paper categorises the impact of amicus curiae on democracy within the DSM into “internal” (equal participation of WTO members) and “external” (public participation), asserting that amicus curiae influences both dimensions. Additionally, it outlines the development of amicus curiae in the DSM and clarifies that the amicus curiae discussed here refers to a mechanism in which the acceptance of briefs from non-state actors is independent of member states' consent. The second and third sections primarily analyse whether amicus curiae can promote democracy, demonstrating that while it enhances public participation, it simultaneously undermines equal participation among WTO members. Therefore, its impact on democracy in the DSM is multifaceted. The final section highlights the crucial role of member attitudes in addressing this issue and explores various arrangements to mitigate the negative impact on democracy.
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On the Rocks: The WTO’s Member-Driven, Consensus Decision-Making
Robert Wolfe & Peter Ungphakorn
The buzzword for the troubled World Trade Organization (WTO) is ‘reform’. But without a shared view of what that means, reform cannot begin in any meaningful way. There is no doubt that two of the WTO’s functions are floundering: negotiating new rules and settling legal disputes about compliance with existing rules — but even then, member governments have found ways of producing some results. A third function is working better: the scrutiny of trade measures in the regular committees on the various WTO agreements. It sustains a considerable amount of rules-compliant trade, although that too should be improved. The failing is collective even if some countries or groups of countries might take more of the blame than others.
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There are many reasons for the WTO’s troubles. We focus on one that is central to decision-making in all of the main areas of the WTO’s work: the consensus rule. Although alternatives are available, members still insist on it. There have been calls for the WTO to vote, which is allowed under the rules but is avoided because it would destroy the WTO. This paper looks at the reasons why. It examines what consensus means, how it works, why it is so often abused, the role of power, various ideas put forward to deal with its problems, and what WTO members are saying to each other about it. We conclude that consensus is fundamental yet leaves the WTO on the rocks.