Professor Arie Reich

Prof Arie Reich
Bar Ilan University, Israel & President, Israeli Association for the Study of European Integration

The Principle of Subsidiarity as Applied to Regional Economic Integration in Asia

Abstract:

The last few years, Asia has seen an outburst of bilateral and regional treaties in the field of International Economic Law, in general, and in International Trade, in particular. In contrast to the new world economic order contemplated by the founders of the Bretton-Wood system and the GATT/WTO in the aftermath of World War II, which was to be based on the non-discriminatory and all-encompassing principles of Multilateralism, we now have a fragmented multitude of bilateral and regional arrangements in most of the important fields of international economic regulation: international trade, international investment and international taxation. The conventional methodology utilized in the debate on multilateralism versus regionalism has been the economic cost-benefit analysis. In the trade field this has meant the Vinerian approach of trying to measure trade creation versus trade diversion and estimating their relative costs and benefits. In this perspective, many of the Asian bilateral initiatives can be criticized as being trade-diverting and welfare reducing. This paper wants to propose a different perspective on the debate, namely that of the European Subsidiarity principle, embedded today in Art. 5 of the EC Treaty. While in the EU, this principle is used in the context of allocation of authority between the Community and its Member States, this paper proposes to use it in the analysis of the various layers of international law and in relation to the choice of bilateral, regional or plurilateral regimes over multilateral ones.

Unlike the Vinerian perspective, which is generally critical of bilateral trade agreements and provides only a limited justification for them, the Subsidiarity perspective sees them in a more positive light, providing several explanations and justifications for their existence and thus somewhat closing the gap between the reality of booming bilateralism and the critical scholarship. The Subsidiarity perspective incorporates both ethical and political considerations, in addition to the economic ones, and can be applied to more than just trade agreements. In the paper it is applied to numerous fields of international economic regulation, such as tariffs, subsidies, government procurement, foreign investment, money laundering, corrupt practices, labour and environmental standards, and intellectual property.

Biographical note:

Professor & Vice Dean of the Faculty of Law, Bar Ilan University and Director of the Center for Commercial Law; Born in Sweden. LL.M and S.J.D. from the University of Toronto, Canada; LL.B. from Bar Ilan University, Israel. Served for six years as Chairman of the Trade Levies Committee (Israel’s Antidumping and Countervailing Duty Tribunal); Member of a World Trade Organization arbitration panel in a trade dispute between the EU and the U.S.A.; Member of the Chartered Institute of Arbitrators, London; Member of the International Academy of Commercial and Consumer Law; President of the Israeli Association for the Study of European Integration (IASEI); National Correspondent for Israel to the UN Commission on International Trade Law (UNCITRAL). Author of International Public Procurement Law (Kluwer, 1999); The WTO and Israel: Law, Economics and Politics (Bar Ilan University Press, 2006); and many articles on international trade regulation, EU Law, competition law and international public procurement.

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