Object and Purpose Control in Trade Disputes: Lessons from the CJEU for WTO Reform

Abstract

This article argues that WTO dispute settlement should address distortions of international trade law caused by contemporary state capitalism by controlling domestic measures for their compatibility with the object and purpose of the WTO. The article begins by examining EU countermeasures against Egypt-based, Chinese state-owned company Jushi Egypt and argues that, under the current state of trade law, the subsidies in question would be compatible with WTO law. However, ruling out trade defences against subsidies like these, which are aimed at skirting the rules of international trade, would undermine WTO law in the long term. The article therefore proposes that WTO dispute settlement should drop its textualism and follow the example of the CJEU in the “Portuguese Judges” case and enforce the fundamental values of WTO law, its object and purpose, against measures of the member states. After arguing that the WTO does indeed have a common purpose, epitomized by the notion of sustainable development, the article demonstrates how this approach could be operationalized and discovers accommodating tendencies in the case law.

Keywords: trade law, subsidies, State-owned Enterprises, sustainable development, treaty interpretation