What is the relevance of global politics and international relations for companies, managers, and work? How will it impact your company and why should you care? This chapter identifies how changing global order thrusts upon all global businesses to respond to and actively manage geopolitics. Companies have to balance corporate interests with broader security externalities that their governments emphasize because geopolitics and economics are closely intertwined. Geopolitical risk arises when states prioritize national security and limit how companies leverage their assets in generating economic rents. A key factor shaping how a company will be impacted by the risk is its corporate nationality. Geopolitical risk in a given market is higher for companies from perceived rival countries than those from friendly ones. In order to assess the impact of geopolitical risk on their firm, companies, managers, and employees can focus on a structural perspective that emphasizes four levers that reshape the basic market structure for global companies: market access, level playing field, investment security, and institutional alignment. Ultimately, while navigating geopolitical tensions is increasingly a part of the job for many managers, it can also come at a cost to the company.

Geopolitical forces are fundamentally altering the landscape of e-commerce and digital trade. Cross-border e-commerce is increasingly fragmented along geopolitical lines, as e-commerce companies are forced to reckon with the security implications of their operations. This includes governments’ concerns about data security and sovereignty. When foreign firms collect extensive data on the behavior of the country’s customers, there is potential for those data to be exploited in shaping consumer behavior or spreading information in the country. Additionally, when a foreign firm plays an important role in the domestic economy, local governments have limited means to encourage those firms to act in the “national interest” or broader societal and economic goals beyond maximizing profits. Because of these concerns, governments have adopted policies to shape the behavior of e-commerce companies. This includes shaping market access, level playing field, investment security, and institutional alignment. E-commerce companies have adopted various strategies to manage corporate nationality and geopolitical tensions, including masking country of origin, diversifying supply chains, relocating control rights, focusing on alternate markets, and corporate diplomacy.

Services preferential trade agreements (PTAs) have grown rapidly since the turn of the millennium, going from exception to common occurrence. In recent years, they have increasingly linked a number of larger economies. The chapter reviews the main innovations brought by PTAs in the global governance of services trade, and highlights some limits. The contribution of services PTAs is analysed along three key angles, against the background of the multilateral trading system: 1) market access commitments; 2) rulemaking; and 3) architecture and liberalisation modalities. While WTO+ market access commitments have been an important feature of services PTAs early on, progress on rulemaking has been modest. In terms of architecture, services PTAs have produced major advances in relation to liberalisation modalities, with negative-list agreements outnumbering the General Agreement on Trade in Services (GATS)-type positive-list agreements. Recently, agreements between larger economies have been associated with several architectural innovations, moving away from the simple choice between the traditional positive and negative listing models. Overall, this has resulted in the extension of some of the key features of the negative-list approach to new countries and served to further emphasise, sometimes through innovative solutions, the importance of transparency of market access conditions across sectors and modes.

This chapter addresses the issue of legality of ‘secondary sanctions’ from the viewpoint of international investment law. The theoretical situation considered is that of a foreign investor, having made an investment in the US, being subjected to penalties or restrictions under a US secondary sanctions regime, based on its conduct of certain transactions with a targeted country or entity, even though such business activities have no US jurisdictional ‘nexus’. The chapter first attempts at identifying the potentially relevant substantive standards of investment protection, including the prohibition of expropriation without compensation and the ‘fair and equitable treatment’ standard. The likelihood of a successful invocation of these standards by the claimant in an investor–State arbitration claim is discussed. In that process, it is considered inter alia whether the deterrent effect of secondary sanctions may per se amount to a violation of an investment protection instrument. The chapter then turns to the assessment of the possible defences that the respondent State may put forward in order to seek to escape its liability for the possible breach of a standard of bilateral investment treaties, notably defences relating to ‘security exceptions’ provisions in treaties and allegations as to the ‘illegality’ of the investment.

Today’s platformization of services was an “unforeseen” phenomenon when the WTO was established. However, through the pro-liberalization WTO jurisprudence developed in past decades, the GATS market access commitments have played more than a marginal role in the story of the emergence of datafication, leaving the door open for big tech companies. Without question, platforms’ associated datafication practices influence human society, in terms of their beauty as well as their peril. The perilous side therefore calls into question whether international trade commitments negotiated in the pre-digital age should be sustained in this datafied world. In the FTA context, Chapter 3 argues that listing nonconforming measures under the Cross-Border Trade in Services Chapter represents the most critical step in reserving a state’s “digital sovereignty.” Such inscriptions ensure that a state does not risk committing to future services and associated delivery means that did not exist at the time of treaty negotiations. Nonetheless, market access obligations do not prevent states from adopting domestic regulations in pursuit of legitimate national policies. Digital trade liberalization must be accompanied by the introduction of data regulations to address the potential risks and harms.

Article 34 of the Treaty on the Functioning of the European Union (TFEU) provides that measures equivalent to a quantitative restriction shall be prohibited. The case law of the European Court of Justice interpreting this has addressed product standards, selling arrangements and all other kinds of national measures that might tend to hinder trade or affect consumer behaviour and thereby restrict imports. Relying on judge-made ideas such as mutual recognition and mandatory requirements, the Court has put the informed consumer at the heart of the market, at the expense of the paternalistic state. On the other hand, it recognises the need to restrict free movement where legitimate public interests are at stake, with the proportionality of such restrictive measures being the main question in most cases.

The chapter builds on the author’s article titled ‘Gender-Inclusive Governance for E-Commerce’, which broke new ground by examining electronic commerce (e-commerce) from a gender perspective, and the proposal for a provision on gender equality in services domestic regulation (services DR). Since then, both the provision and the policy landscape have developed. The provision was included in the negotiations on services DR that concluded on 2 December 2021 among the sixty-seven World Trade Organization (WTO) members participating in the Joint Statement Initiative (JSI) on Services Domestic Regulation. The chapter aims to meet the moment with a restatement of the framework that the article proposed, using original and new analysis by including the concluded text. The chapter generates new knowledge that is actionable for policymakers and stakeholders by responding to three questions: What is gender-inclusive governance? What is the relationship between gender divides, e-commerce, digital trade, and trade in services? What policy interventions are necessary, and why, to meet the moment? The goal is to discuss ways to attain gender-inclusive governance for trade policy at this unique time for implementing changes that are fit for the digital age. The chapter argues that multi-level dedicated gender-inclusive governance can contribute to closing the gender gap.

The extent to which Chinese goods exports faced unilateral trade policy changes taken by other WTO members is documented here and decomposed between those policy changes that specifically target China and those that do not. Chinese goods exposure to measures taken by the European Union, the United States, China’s regional partners, and those taken worldwide are also contrasted, in terms of scale, discriminatory or liberalising treatment, as well as timing. The degree to which China’s WTO membership protected its goods exports from worse competitive conditions since the onset of the Global Financial Crisis is assessed and found wanting.

The extent to which Chinese goods exports faced unilateral trade policy changes taken by other WTO members is documented here and decomposed between those policy changes that specifically target China and those that do not. Chinese goods exposure to measures taken by the European Union, the United States, China’s regional partners, and those taken worldwide are also contrasted, in terms of scale, discriminatory or liberalising treatment, as well as timing. The degree to which China’s WTO membership protected its goods exports from worse competitive conditions since the onset of the Global Financial Crisis is assessed and found wanting.

At the heart of the multilateral trading system is the commitment to nondiscrimination, the most-favored-nation (MFN) principle, mandating that all nations participate on equal terms. Added to this are a series of obligations to limit government interventions in trade. To give assurance that the system will deliver what it promises, transparency is required, making clear to all the measures that affect trade. Reality diverges from the ideal.

The Dispute Settlement Understanding (DSU) was one of the chief results of the Uruguay Round. Dispute settlement under the GATT had not been binding. Adoption of panel reports could be, and too often was, blocked by the losing party. All of the major trading members wanted dispute settlement to be binding, to have definitive results. They carefully constructed a complex system to remedy past defects. It had internal inconsistencies that only became apparent over time.

A major difference between the WTO as compared with the World Bank and International Monetary Fund is the domestic political sensitivity of trade. Among trade issues, none are more politically sensitive than agriculture. It took eight rounds of GATT negotiations to achieve the landmark Agreement on Agriculture in 1993. There has been little progress toward reforming agricultural trade rules in the ensuing years. Much more needs to be done.

Tariff liberalization has been a centrepiece of all trade negotiations since the early inception of the General Agreement on Tariffs and Trade (GATT) in 1948 to the current framework of the World Trade Organization (WTO), and under all Regional Trade Agreements (RTAs) such as the North American Free Trade Agreement (NAFTA) and the Trans-Pacific Partnership (TPP).

The Trans-Pacific Partnership (TPP) agreement contains important provisions of direct relevance for agricultural trade and will therefore have important implications for rural economies, the agri-food sector, food security and nutrition in the member countries. Similar to other sectors, for agriculture the agreement includes an ambitious and comprehensive package that goes beyond eliminating tariffs and traditional non-tariff barriers to trade in goods and services, which warrants a thorough analysis of the sectoral effects and their implications for different stakeholders, including agricultural producers.

The Trans-Pacific Partnership Agreement (TPP), originally intended to cover 12 Asia-Pacific countries (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam), was arguably the largest and most economically significant regional trade agreement (RTA) ever concluded. Together, the original TPP signatories accounted for about 26% of world trade and 36% of world GDP. In early 2017, the United States withdrew from the TPP on the direction of the then-newly elected US President, Donald J. Trump, casting the agreement’s future into uncertainty.

This chapter conducts an analysis of the GATS disciplines and their applicability to digital services trade. The reader is thereby provided with an overview of the relevant GATS obligations and how they apply to the supply of digital services. The distinction between the GATS’ general obligations and its obligations subject to specific commitments is explained and the implications for digital services trade elaborated upon. The chapter also sets out how the digital supply of services that can also be supplied offline impacts the likeness analysis in various GATS obligations. The most relevant obligations for digital services trade are the most-favoured nation treatment obligation, the market access obligation and the national treatment obligation. The chapter discusses the potential overlap between the latter two obligations and how to interpret WTO Members’ Services Schedules to understand their commitments. The chapter additionally addresses the applicability of the Annex on Telecommunications, the Reference Paper on Basic Telecommunications and the Understanding on Commitments in Financial Services to digital services trade. Finally, the chapter discusses the justification grounds in the GATS and how they relate to digital services.

The GATT/WTO regime is built on an export-bias, with trading nations aiming to export goods and services while keeping foreign producers from their domestic market so as to protect domestic producers from competition. Therefore, the vast majority of WTO rules are concerned with regulation on the liberalisation of import restrictions, tariffs and non-tariff barriers, but touch only lightly on export restrictions. The emphasis on the liberalisation of import barriers can be attributed to the built-in mercantilist tendencies of the GATT/WTO system – an arm of the post-World War II international economic order – and viewed as a direct response to the earlier erection of insurmountable import tariffs, which led to the Great Depression and the accompanying political turmoil. The weaknesses of such one-sided regulation out of export-bias are exposed by the proliferation of export restrictive measures adopted in the name of national security and in a time of pandemic. Export restrictions may pose great challenges to the global supply chain, given the geographical distribution of production chains out of economic globalisaiton, and exacerbate food insecurity of food-importing countries.