On Most-Favoured-Nation Treatment In Regional Services Trade Agreements

In recent years, under the difficulty in the negotiation for multilateral trading systemsuch as the World Trade Organization (the WTO), regional free trade agreements (FTA)have been greatly developed, playing an important role in promoting trade liberalization.Meanwhile, the co-existence of various trade rules would inevitably exacerbate thephenomenon of fragmentation of international law. This is embodied typically in thepotential conflict both between the regional free trade agreements and the multilateraltrading system, and between different free trade agreements. How to coordinate thepotential conflicts is the starting point of this article. This article concentrates on the“treaty shopping” dilemma caused by the most-favored-nation treatment, interpretsAustralia regional service trade agreements through the method of treaty interpretation,and tries to clarify whether the most-favored-nation treatment includes the serviceinvestment dispute settlement provision of a third agreement in order to coordinate thepossible conflict between regional service trade agreements.This paper is divided into five parts:Part I introduces the basic theory of most-favored-nation treatment, and overviewsthe most-favored-nation treatment clause contained in Australia regional service tradeagreements.Part II analyzes the potential conflict between regional service trade agreementscaused by most-favored-nation treatment. After pointing out that most-favored-nationtreatment, as a non-discrimination treatment, could help promote the multilateralization oftrade rules, the issue is focused on the “treaty shopping” dilemma between differentregional service trade agreements and the question that whether the most-favored-nationtreatment includes dispute settlement provision contained in a third agreement is putforward.Part III tries to answer the question raised in the second part through treatyinterpretation. After the analysis of the general theory of treaty interpretation, we interpretArticle11.4of “Free Trade Agreement between the United States and Australia”, andinclude jurisprudential transplantation from the judicial practice developed in the bilateralinvestment treaty disputes, trying to answer the question at issue.Part IV gives some inspirations and advices on the strategy of most-favored-nationtreatment negotiation in the regional services trade negotiations between China andCanada based on the above analysis. Part V is the conclusion of this article.