Philippe Orban, Director of Tax and Legal Advisors at KPMG Brussels, commented on how the decentralized use of the harmonized system makes it difficult to apply at the global level. Conflicting guidelines and interpretations on classification, even among the 27 European states adopting common tariffs, expose the system to subjectivity and make it increasingly difficult for global businesses to handle.

A comment from the audience suggested that due to the complex nature of current trade patterns, a narrower regulation framework could become a straightjacket and would not facilitate its application. Conversely, another speaker mentioned the danger of cherry picking among too many applicable rules and interpretations.

Prof. Claire Kelly, from Brooklyn Law School, praised the WTO for promoting discussions on value-added trade. She noted the current importance of intermediary products in global supply chains, the subjective nature of most tests used to identify them, and the different approaches to determine the basis value for ad valorem duties. She noted how national agencies often adopt contradicting views in regard to transfer pricing, such as tax authorities assuming inflated prices, customs assuming deflated ones. Finally, she suggested more use be made of trade networks, in which businesses, academics, regulators etc. could confront problems from the bottom up, citing as an example the EU consultations on rules of origin and the OECD experience with studies on transfer pricing.

The debate touched upon questions on rules of origin, such as the possibility of adopting an origin of convenience, the relevance of the concept itself and the fact that a “made nowhere specifically” would often best describe present products.

Prof. Jorge Viñuales, from the Graduate Institute of International and Development Studies, looked at the overlaps and conflicts between trade and investment rules. The main implications of moving the lens towards investment rules, specifically in relation to restrictions of movement, would be the direct right of action investors have against the state adopting the measure and the impossibility for the state to centralize proceedings in a class-action manner, as happens at the WTO. He noted that national trade policies have to be considered from the point of view of both trade and investment rules, illustrating how border adjustments for subsidies such as those for carbon neutralisation would be better justifiable under trade law, while import restrictions might be more acceptable under investment law. This regulatory mismatch between both regimes could originate several investor claims against states.

Therefore, he concluded on the need for sustained effort to harmonize trade and investment regulation in those areas where they overlap, while allowing them to keep their distinctiveness so as to avoid conflation. He highlighted the specificity of admission to bilateral investment treaties (BITs), which are not extended to investors of other states, and the danger of extrapolating trade law reasoning to these provisions.

During the debate, another speaker wondered whether any attempts at such harmonization were undertaken, and Prof. Viñuales said he had not heard of any such attempts. However, he pointed to signs of awareness of this issue, such as in the model BIT of Canada that includes a provision stipulating that actions taken by Canada in pursuance of WTO decisions should not be considered a breach of the BIT.

Ms Konstantina K. Athanasakou, Associate at White & Case, commented on the challenges that global supply chains pose for trade regulation, especially in the context of environmental technology. She noted that the WTO Trade & Environment Committee studies the way trade can help disseminate and promote investment in technology, but only one proposal on environmental goods is centred on having technology as its component.

The debate also raised questions about the limit between official regulation and private norms, such as codes of conduct in global supply chains, and how enforceable they are.