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Contents
Part I: Introduction to the Legal and Economic Aspects

of World Trade Regulation
1. Introduction to World Trade Law��3
I. Increased Trade and Deeper Integration: Globalisation!��4
(a) Increased Trade and Increased Importance of Trade��5
(b) What is Traded?��7
(c) Who Trades?��10
II. Why Trade?��13
(a) Economics��13
(b) Peace��15
III. The Economics of Trade��20
(a) Comparative Advantage��21
(b) Weighing the Harms to Some against the Benefits to Others��24
(c) Trade between Countries at Different Income Levels��25
(d) Free Trade and Development��25
(e) Industrial Policy��26
(f) Conclusions on the Free Trade versus Protection Debate��27
(g) The Economics of the ‘New’ Issues��28
IV. Free Trade vs Protectionism��28
V. Structure of the Book��50
Part II: History, Institutional Aspects and the Relationship between
World Trade Law, International Law and Domestic Law
2. The History and Institutions of the Multilateral Trading System��53
I. Introduction��53
II. The GATT as an Institution��53
(a) The Origins of the GATT��54
(b) GATT Negotiating Rounds��57
III. The WTO as an Institution��58
(a) WTO Objectives, Scope and Functions��62
(b) Basic Structure of the WTO��70
(c) Decision-Making in the WTO��74
(d) Membership��84
(e) Accession and Withdrawal��85
IV. Questions��89
viii Contents
3. World Trade Law and International Law��91

II. World Trade Law and International Law: Differing Viewpoints��91
III. Questions��109
4. World Trade Law and Domestic Law��111
II. United States��117
(a) Direct Effect��117
(b) Indirect Effect/Consistent Interpretation��119
(c) Summary of the US Law Position��129
III. European Union��129
(a) Direct Effect��129
(b) Indirect Effect/Consistent Interpretation and Beyond��136
(c) Summary of the EU Law Position��137
IV. Other Jurisdictions��138
V. General Observations on Other Jurisdictions��143
VI. Questions��144
Part III: Dispute Settlement in the WTO
5. The Settlement of Disputes in the GATT/WTO��149
II. Dispute Settlement in the GATT��150
III. Dispute Settlement in the WTO: Introduction��153
IV. Basic Overview of the DSU Process��154
(a) Consultations��154
(b) Panels��155
(c) Appellate Review��156
(d) Implementation��157
(e) Compliance Review��158
(f) Compensation and the Suspension of Concessions or other
Obligations��160
(g) The Sequencing Debate��167
V. Alternatives to Disputes: Mediation and Arbitration��169
VI. Interaction of the DSU Rules with other WTO Agreements��170
VII. Important Procedural and Systemic Issues��171
(a) The Complaint��171
(b) Participation by WTO Members and other Interested Groups��181
(c) Panel and Appellate Body Decision-making��190
(d) Multilateralism versus Unilateralism��210
VIII. Questions��213
Part IV: Traditional GATT Obligations
6. Border Measures: Tariffs and Quotas��219
II. Tariffs��220
Contents ix
(a) GATT/WTO Tariff Negotiations��220

(b) GATT Rules on Bound Tariffs��221
(c) Domestic Tariff Administration��236
III. Quotas��243
IV. Tariff Quotas��249
V. Export Quotas and Export Tariffs��249
(a) Export Quotas��249
(b) Export Tariffs��257
7. Non-Discrimination: MFN and National Treatment��259
I. Overview of Non-Discrimination��259
(a) What is Discrimination? The Role of Intent, Effect and Comparisons��259
(b) De Facto versus De Jure Discrimination��263
II. National Treatment: Domestic Taxes and Regulations��263
(a) Introduction��263
(b) The National Treatment Provisions of GATT Article III��265
(c) Article III:2: Tax Measures��266
(d) Article III:4: Regulatory Measures��285
(e) Internal Measures vs Border Measures��305
(f) Article III: Conclusions and General Observations��308
III. Questions��310
IV. The Most Favoured Nation Principle��311
(a) Introduction��311
(b) Elements of the Most Favoured Nation Principle: ‘Likeness’
and Non-Discrimination��315
(c) Unconditional MFN��324
(d) Conclusions on the MFN Obligation��327
V. Questions��328
Part V: GATT Exceptions
8. Bilateral/Regional Trade Agreements��331
II. History of PTAs��332
III. The Development of Regionalism: Why (or why not) PTAs?��334
IV. Gatt Article XXIV and GATS Article V��339
(a) The Obligation to Notify to the CRTA��340
(b) External Trade Requirement��344
(c) Internal Trade Requirement��348
V. PTAs and Dispute Settlement in the WTO��351
(a) Turkey—Textiles��352
(b) United States—Line Pipe Safeguards��356
(c) Peru—Agricultural Products��357
VI. Recent Trends: The Future of PTAs in the WTO��364
VII. Questions��372
x Contents
9. The Article XX ‘General Exceptions’: Health, the Environment,

Compliance Measures, Public Morals and More��373
II. General Interpretive Issues��374
(a) Applicability of Article XX to Claims under the GATT and under
Instruments Other than the GATT��374
(b) Burden of Proof��378
(c) Structure of the Article XX Analysis: Sub-paragraphs First,
Chapeau Second��378
(d) ‘Necessary’ versus ‘Relating to’��379
(e) Relationship of Article XX Chapeau Discrimination to Article I
and Article III Discrimination��384
(f) Scope of Article XX��385
(g) The Consideration of Extraterritorial Measures��385
III. The Major Listed Exceptions��386
(a) Article XX(a): Public Morals��386
(b) Article XX(b): Human, Animal or Plant Life or Health��397
(c) Article XX(d): Compliance Measures��403
(d) Article XX(g): Conservation of Exhaustible Natural Resources��410
(e) Article XX(j): Acquisition or Distribution of Products
in Short Supply��425
IV. The Chapeau��427
(a) US—Gasoline��427
(b) US—Shrimp��432
(c) Brazil—Tyres��434
(d) EC—Seal Products��440
V. Conclusions��443
Part VI: Remedies for Fair and Unfair Trade
10. Subsidies and Countervailing Measures��449
II. Identification of Subsidies that are Subject to the SCM Agreement��451
(a) The Definition of ‘Subsidy’��451
(b) Specificity��467
III. Regulation of Specific Subsidies Under the SCM Agreement��471
(a) Prohibited Subsidies��471
(b) Actionable Subsidies��485
(c) Non-actionable Subsidies��494
IV. Dispute Settlement and Remedies��494
V. Subsidies Provisions in other WTO Agreements��497
(a) Agriculture Agreement��497
(b) GATT��498
(c) TRIMs Agreement��499
VI. Countervailing Measures��499
Contents xi
11. Dumping and Anti-dumping Measures��513

II. Anti-dumping: A Basic Overview��516
(a) Domestic Anti-dumping Rules��516
(b) History of GATT/WTO Rules on Dumping��518
III. Anti-dumping Investigations��519
(a) Initiation��519
(b) Evidence Used in the Investigation��520
(c) Key Substantive Issues: Dumping, Injury and Causation��521
IV. Anti-dumping Measures��555
(a) Provisional Measures��555
(b) Price Undertakings��556
(c) Imposition and Collection of Duties��556
(d) Duration and Review of Duties��557
(e) The Use of Anti-dumping Measures Other than Tariff Duties��558
V. Challenging Anti-dumping Measures in WTO Dispute Settlement��566
(a) Standard of Review��566
(b) The Measures to be Challenged��567
(c) Good Faith, Even-handedness, Impartiality��567
VI. ‘Double Remedies’ in Relation to Concurrent Anti-dumping and
Countervailing Duties��568
(a) Domestic/Export Subsidies and Lower Export Prices��569
(b) Adjustments in the Dumping Calculation Which Take Subsidies
into Account: The NME Calculation��571
12. Safeguards��579
II. Procedural Requirements��581
III. Conditions to be Satisfied in Order to Apply Safeguard Measures��583
(a) Increased Imports��584
(b) Unforeseen Developments��586
(c) Serious Injury or Threat Thereof��589
(d) Causation and Non-attribution��592
IV. Standard of Review��599
V. Application of Safeguard Measures��600
(a) The Extent of Safeguard Measures��600
(b) Parallelism��602
(c) Measures in the Form of Quantitative Restrictions��608
(d) Excluding Developing Country Members��608
(e) Duration of Safeguard Measures��609
(f) Provisional Safeguard Measures��610
VI. Maintaining an Equivalent Level of Concessions��610
xii Contents
Part VII: Beyond Trade in Goods: Domestic Regulation, Services, Investment,

Procurement and Intellectual Property
13. The SPS and TBT Agreements��617
II. The SPS Agreement��618
(a) Basic Rights and Obligations��619
(b) Harmonisation��621
(c) Equivalence��621
(d) Assessment of Risk and Determination of the Appropriate Level
of Sanitary or Phytosanitary Protection��623
(e) Regional Conditions��641
(f) Standard of Review under the SPS Agreement��644
(g) Summary of the SPS Agreement’s Provisions��647
III. The TBT Agreement��648
(a) TBT Agreement Article 2.1—National Treatment and
Most Favoured Nation Treatment��649
(b) TBT Agreement Article 2.2—More Trade-Restrictive
than Necessary��662
(c) TBT Agreement Article 2.4—International Standards��675
IV. Closing Thoughts: The Object and Purpose of the SPS and TBT
Agreements��684
14. Trade in Services��689
II. The Nature of Services��690
III. The Scope of the GATS��692
(a) What Services are Covered?��692
(b) How are Services Traded?��693
(c) The Relationship of Trade in Goods (the GATT) with Trade
in Services (the GATS)�� 695
IV. General Obligations and Disciplines��695
(a) Most-Favoured Nation Treatment (MFN)��695
(b) Transparency��696
(c) Domestic Regulation��696
(d) Exceptions��698
V. Specific Commitments��706
(a) Market Access��708
(b) National Treatment��719
(c) Additional Commitments��720
(d) Withdrawal of Commitments��720
VI. Additional Issues��721
15. Trade and Investment��727
II. Investment in the GATT/WTO��727
Contents xiii
(a) The TRIMs Agreement Negotiations��728

(b) The TRIMs Agreement��729
(c) Dispute Settlement��731
III. International Investment Regulation Outside the WTO Context��738
(a) Bilateral Investment Treaties and Investment Provisions
of Free Trade Agreements��738
(b) A Multilateral Agreement on Investment?��745
IV. Investment, the Doha Round and beyond��750
16. Government Procurement��755
II. The GPA’s Objectives��760
III. Issues Relating to Contract Coverage��763
(a) The Definition of Covered Procurement��764
(b) Coverage from the Developing Country Perspective��771
IV. The United States ‘Stimulus Package’ Buy American Provisions
and the GPA��772
(a) Section 1605(d)—Legislative History��773
(b) Section 1605(d)—Operation��774
(c) Section 1605(b)—the Waiver��775
V. Rules Applying to Covered Contracts��776
(a) General Principles of Non-discrimination��777
(b) Methods of Procurement��779
(c) Advertisement of Procurement Opportunities—Notices��780
(d) Conditions for Participation��782
(e) Time Limits for Award Procedures��783
(f) Awarding of Contracts��785
VI. The Exceptions Provision��788
VII. Domestic Review Procedures for Supplier Challenges��789
(a) The Identity and Attributes of the Review Body��793
(b) Remedies��794
VIII. The GATT Article III:8(a) Procurement Derogation��795
IX. Discussions Towards Multilateral Procurement Disciplines��797
X. Questions��800
17. Trade and Intellectual Property: The TRIPS Agreement��803
II. Historical Treatment of Intellectual Property��803
III. The Framework of the TRIPS Agreement: General Provisions
and Principles��805
(a) Overview��805
(b) General Structure��806
(c) National Treatment and Most Favoured Nation Treatment��807
(d) Exhaustion��810
(e) Objectives and Principles��812
IV. The Scope and Coverage of the TRIPS Agreement��813
(a) Copyright and Related Rights��814
xiv Contents
(b) Patents��829
(c) Enforcement and Remedies��855
(d) Acquisition and Maintenance of Intellectual Property Rights
and Related Inter Partes Procedures��859
(e) Dispute Prevention and Settlement��859
(f) Transitional Arrangements��864
(g) Criticisms of the Agreement��865
V. Intellectual Property and Preferential Trade Agreements��869
Part VIII: Social Policy Issues
18. Developing Countries in the Multilateral Trading System��877
II. Classification of WTO Members as ‘Developing’ or ‘Least Developed’��877
III. The Role of Developing Countries in the WTO: Negotiations, Disputes,
and Special and Differential Treatment��880
(a) The Negotiating Process��882
(b) Dispute Settlement��884
(c) Special and Differential versus Equal Treatment��886
IV. Are the WTO’s goals Appropriate for Developing Countries?��910
19. Linkages between Trade and Social Policies��913
I. Environment��914
II. Culture��924
III. Labour Standards��932
IV. Human Rights��944
V. Health and Safety��952
Index��963
Part I
Introduction to the Legal and Economic

Aspects of World Trade Regulation
2
1
Introduction to World Trade Law
The scope of the field of ‘World Trade Law’ is somewhat difficult to define. In part, this
is because a number of terms have been used to describe it: International Economic Law,
International Trade Law, Global Trade Law and International Trade Regulation, among
others. All seem to refer to generally the same subject matter, although there may be slight
variations. There are a wide range of topics that have, to some extent, aspects that are
‘global’ or ‘international’ or ‘world-wide’; that relate to ‘trade’ or ‘economics’; and that are
‘legal’ or ‘regulatory’ in nature. We chose the term ‘World Trade Law’ in large part because
it emphasises the central role of the World Trade Organization (WTO) in regulating the
rules of world trade. The WTO is not the only relevant legal instrument or international
organisation, but it is the broadest and most comprehensive in its coverage, and to some
extent governs other bilateral and regional agreements in this area. In addition, while we
address various ‘economic’ issues in this book, the core focus is on ‘trade’ issues. To the
extent that other issues are discussed, it is in large part because of their connection to trade.
Thus, ‘World Trade Law’ seemed the most appropriate title for this volume.
The ‘World Trade Law’ covered by this book focuses on the legal instruments that
regulate trade flows. This includes international agreements related to trade, as well as
certain domestic laws affecting trade flows. The international agreements begin with the
WTO Agreement, which established the World Trade Organization. With 164 countries
(or customs territories) as Members as of this writing (and many more attempting to join),
the WTO is almost a fully global agreement at this point, providing a binding set of rules
on a wide range of trade-related topics (including trade in goods and services, intellectual
property protection and even a few limited rules on investment).
In addition to the WTO, there are the numerous bilateral, regional and plurilateral trade
agreements. These agreements are, in a sense, still part of the multilateral system because
the WTO Agreement establishes conditions which these agreements must meet in order
to be permitted under WTO rules. However, these agreements often go further in terms of
economic integration than do WTO rules, so there are important substantive differences.
The most prominent of these agreements are the European Union (EU), the North American
Free Trade Agreement (NAFTA), Mercosur (the Southern Common Market) and the
ASEAN Free Trade Area (AFTA). Having proliferated in recent years, bilateral agreements
are increasingly gaining in importance in any ‘World Trade Law’ discussion or debate.
Investment agreements also play a significant role in trade law. Traditionally, these
agreements have taken the form of bilateral investment treaties, under which the signatories
3
4 Introduction to the Legal and Economic Aspects of World Trade Regulation
promise to give certain treatment to inward investment in their territory. Recently, though,
many bilateral and regional trade agreements now incorporate investment provisions, thus
combining both trade and investment into a single agreement.
In terms of domestic law, the key areas covered are the so-called ‘trade remedies’,
where domestic agencies oversee a quasi-judicial process for putting up barriers to both
fair and unfair trade (within the boundaries of certain international rules). Also important
is customs administration, under which governments collect duties and otherwise regulate
imports and exports.
While this book does briefly cover domestic laws, the focus is on the international
agreements, with a heavy emphasis on the rules of the WTO. In a sense, WTO rules are an
umbrella under which almost everything else falls. The WTO sets the international trade
rules and regulates regional and bilateral trade agreements and domestic trade laws.
Before moving on to the substance of this text, it is important that students are first intro-
duced to international trade and economics more generally. We will do so in this chapter
by looking at how trade has played, and continues to play, an important role in the world
economy. As will be seen, the trend is towards deeper international integration. The chapter
then asks and briefly attempts to answer the following questions: why do nations trade?
why is integration increasing? what is the effect of this? In answering these questions, we
present several extracts providing various perspectives on globalisation and trade. Finally,
we provide an outline of the structure of the book.
I. INCREASED TRADE AND DEEPER INTEGRATION: GLOBALISATION!
‘Globalisation’ is an often spoken but seldom defined term used to describe the growing
inter-connectedness of the world. This inter-connectedness, of course, includes but is not
limited to trade. The ability to speak on the telephone or send an email to someone in
another country, to send a parcel or travel beyond one’s borders with relative ease are all
forms of ‘globalisation’. The ability to purchase a product made in another country, or
conversely to sell a product beyond one’s own border, as well as the ability to make an
investment in a foreign country, are also examples of ‘globalisation’.
While some portray ‘globalisation’ as a new trend, this cannot be farther from the truth.
‘Globalisation’, in its rawest form, began with the first human migrants from Africa over
60,000 years ago. Continual movement of people, whether by choice, necessity (due to, for
instance, natural disaster) or coercion (due to, say, an invading army), as well as the emer-
gence of powerful nations, firmly established the position of ‘globalisation’ in the world.
It is often the emergence of technological advances that increases the pace of ‘globalisa-
tion’. For instance, writing in the 1850s, David Livingstone stated:
The extension and use of railroads, steamships, telegraphs, break down nationalities and bring
peoples geographically remote into close connection commercially and politically. They make the
world one, and capital, like water, tends to a common level.1
1 As cited in ‘The Early Pioneers’, The Economist, 28 July 2007, 76.

Introduction to World Trade Law 5
Today, relatively inexpensive air travel, telephone and computer network coverage, and a
host of other recent technological advances, have taken this further and created a world
where one can instantly connect to others in every country in the world.
The impact of ‘globalisation’ on world trade law has run a similar course. New tech-
nologies, such as relatively safe ocean-going vessels, created opportunities for explorers to
‘discover’ new lands and establish trading routes. This, in combination with colonisation,
allowed merchants of varying countries to trade their wares while also providing a more
diverse range of products to the populace (whether it be food, wine, spices, silk, cloth, etc).
By the 1910s, trade (imports and exports) in goods as a percentage of gross domestic
product (GDP)—output—had reached 12 per cent in several colonising nations. This level
of trade diminished with increased protectionism and two world wars and, in fact, did not
return until the 1970s. Thus, it can unquestionably be stated that ‘globalisation’ is not new.
Instead, it is a new term to describe a very old process.2
It can also be stated that the world trade-to-GDP ratio has continued to grow. In other
words, the importance of trade to the world is increasing. While part of the growth can be
attributed to technological advances, a large part is due to the reduction in trade barriers
and trade stability brought about by the GATT/WTO system. As noted, the legal obliga-
tions resulting from such international agreements form the substance of this book, but it is
worthwhile at this point to provide some statistics on the trends in world trade.
(a) Increased Trade and Increased Importance of Trade

The first statistical point to make is simply that trade, as a whole, is increasing. Table 1.1
shows a consistent rise in exports and imports throughout the decades. Notably, it also
shows the rapid rise in trade following the conclusion of the Uruguay Round and advent of
the WTO in 1995.
Table 1.1: World merchandise trade
(US dollars at current prices (billions))

1948 1953 1963 1973 1983 1993 2003 2013 2016
World exports 59 81 157 582 1,858 3,781 7,590 18,953 15,956
World imports 62 85 165 596 1,901 3,845 7,780 18,934 16,141
Source: UNCTADstat, available at http://unctadstat.unctad.org/wds/ReportFolders/reportFolders.aspx (accessed
on 21 June 2017).
Figure 1.1 illustrates not only the consistent rise in the percentage of world exports as well
as global GDP, but also highlights the rise in exports as a percentage of global GDP. This
consistently strong growth rate has correspondingly led to rises in GDP in every c ontinent.3
Not only are global GDP and the level of global trade increasing, but so is the export
2 Ibid.
3 World Economics. ‘Global Growth Tracker—The World Economy—50 Years of Near Continuous Growth’,
available at www.worldeconomics.com/papers/Global%20Growth%20Monitor_7c66ffca-ff86-4e4c-979d-7c5d
7a22ef21.paper (accessed on 1 July 2017).
of goods and services as a percentage of world output, with exports now accounting for
approximately 29 per cent of world output, up from 18 per cent in the 1980s.4 Of note, the
export-to-GDP ratio held firm during the global financial crisis of 2008, and this caused a
steeper decline in the volume of world merchandise exports than in overall decline in GDP.
It is also worth noting that since 2012 trade and GDP have stabilised, though growth has
been relatively stagnant and the export-to-GDP ratio more unpredictable.
Annual percentage change
25
20
15
10
5
0
1961 1965 1970 1975 1980 1985 1990 1995 2000 2005 2009 2010 2011 2012 2013 2014 2015
–5
–10
–15
–20
–25
Export GDP
Figure 1.1: Volume of world merchandise exports and gross domestic product, 1961–2015
Source: World Bank, ‘GDP Growth (Annual %)’, available at http://data.worldbank.org/indicator/NY.GDP.MKTP.
KD.ZG?end=2016&start=1961&view=chart; World Bank, ‘Merchandise Exports (Current US$)’, available at
http://data.worldbank.org/indicator/TX.VAL.MRCH.CD.WT; WTO, ‘World Trade Statistics Review—2016’,
available at www.wto.org/english/res_e/statis_e/wts2016_e/wts16_chap9_e.htm (accessed on 21 June 2017).
The importance of international trade relative to domestic transactions is also increasing.

This can be measured by using a trade-to-GDP ratio, which measures the average share of
exports and imports of goods and services in GDP. Often referred to as a ‘trade openness’
ratio, the term is in fact misleading, as a low ratio does not necessarily imply a high tariff
or non-tariff protection, but may be due to other factors. For instance, international trade
seems especially important for smaller countries (whether it be in terms of land mass or
population) that are in close proximity to countries with open trade regimes. Larger as well
as more isolated countries tend to have lower trade-to-GDP ratios. Other factors, such as
history, culture, trade policy, the structure of the economy and the presence of multinational
firms, also help explain differences in trade-to-GDP ratios across countries. Regardless,
it is clear that total trade (exports and imports) of both goods and services as a percent-
age of GDP is increasing. Remembering that the trade-to-GDP ratios of the industrialised
4 World Bank, ‘Exports of Goods and Services (% of GDP)’, available at http://data.worldbank.org/indicator/

NE.EXP.GNFS.ZS (accessed on 1 July 2017).
c ountries reached 12 per cent in the 1910s before falling and only recovering to those levels
again in the 1970s, the current statistics show the substantial increase in importance of
trade over the last three decades, and even a large increase since 1995.
(b) What is Traded?

Merchandise accounts for the majority of world trade (approximately 77 per cent), while
services (approximately 23 per cent) are playing an increasingly important role in world
trade. Meanwhile, mining (approximately 18 per cent) and agriculture (approximately 10
per cent) account for a small, but politically important percentage of world merchandise
exports.5
Figure 1.2 further breaks down the trade in goods statistics and reveals the change in
trading volumes from 1950 to 2014, while Figure 1.3 shows the average annual percent-
age change in trade in agricultural products, fuels and mining, and manufacturing in three
periods from 1950 to 2014.
Manufacturing (of all kinds) accounts for a large percentage of all trade in goods,
but the prominence of agriculture in world trade continues to diminish. This continues
a long decline for agriculture as a share of global trade. Thus, despite the prominence of
Log. scale
10000
Average annual percentage change

1950-2014
5000
Total exports 6.0
Manufactures 7.0
Mining products 4.0
2500 3.5
Manufactures
1000
Fuels and mining
products
500
Agricultural
products
250
100
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Figure 1.2: World merchandise trade volume by major product group, 1950–2014
(volume indices, 1950 = 100)
Source: WTO, ‘International Trade Statistics 2015—Charts’, available at www.wto.org/english/res_e/statis_e/
its2015_e/its15_charts_e.htm (accessed on 21 June 2017).
5 WTO, ‘World Trade Statistics Review 2016’, available at www.wto.org/english/res_e/statis_e/wts2016_e/

wts16_toc_e.htm (accessed on 22 June 2017).
a griculture in the multilateral trade negotiations, its role in the economies of most nations
has declined for over 50 years. Figure 1.4 tracks the decline of world agriculture exports as
a percentage of total world trade.
Average annual percentage change

12
Agricultural products
10
Fuels and mining products
8
Manufactures
6
0
1950–1973 1973–1990 1990–2014
Figure 1.3: World merchandise average annual percentage change, 1950–2014

This shift from agriculture has disproportionately affected developing countries, many of
which have industrialised in the last few decades. Overall, while agriculture accounted
for 58 per cent and manufacturing 12 per cent of developing country exports in 1960,
manufacturing exports now account for approximately 70 per cent and agriculture only
10 per cent of developing country exports. This trend has been particularly true in many
East Asian nations, such as Korea, Hong Kong, Singapore and most recently China, where
rapid industrialisation since the 1960s (and for China the 1980s) dramatically shifted output
and trading patterns.
10
0
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
Figure 1.4: Agricultural raw materials exports as percentage share of world merchandise exports
Source: World Bank, ‘Agricultural Raw Materials Exports (% of Merchandise Exports)’, available at
http://data.worldbank.org/indicator/TX.VAL.AGRI.ZS.UN (accessed on 1 July 2017).
Trade in services has also significantly increased its position of prominence in the last few
decades. Figure 1.5 shows the rapid post-WTO rise in global service exports.
4500
4000
3500
3000
2500
2000
1500
1000
500
0
1980 1984 1988 1992 1996 2000 2004 2008 2012
Services Exports (US $ B)
Figure 1.5: Global growth in services

Source: UNCTADstat, available at http://unctadstat.unctad.org/wds/ReportFolders/reportFolders.aspx (accessed
on 21 June 2017).
The service sector significantly contributes to global growth, with its contribution to GDP
averaging more than 70 per cent in most advanced countries. Figure 1.6 shows the contribu-
tion of services to the GDP in select countries, while Figure 1.7 shows the world contribu-
tion to the services trade by country.
Brunei Darussalam
Cambodia
Vietnam
Indonesia
China
South Asia
Thailand
Malaysia
Sub-Saharan Africa
Philippines
East Asia & Pacific
Chile
Mexico
Russian Federation
Uruguay
Latin America & Caribbean
World
Australia
Brazil
Japan
European Union
OECD Members
Singapore
United States
Hong Kong, SAR, China
0 10 20 30 40 50 60 70 80 90 100
Figure 1.6: Service as a percentage of GDP, 2015

Source: World Bank, ‘Services, etc, Value Added (% of GDP)’, available at http://data.worldbank.org/indicator/
NV.SRV.TETC.ZS (accessed on 22 June 2017).
United States 11.7

China 6.3
Germany 6.1
United Kingdom 5.5
France 5.3
Japan 3.6
Netherlands 3.5
India 3.1
Singapore 2.9
Ireland 2.8
Belgium 2.4
Italy 2.4
Korea, Republic of 2.3
Switzerland 2.1
Spain 2.1
Other Members 35.7
0 10 20 30 40
Figure 1.7: WTO Members’ percentage share in world commercial services trade, 2014
(c) Who Trades?

It is fair to say that large countries dominate trade—large economies produce more goods
and services to sell and generate more income for people to buy more (what economists
refer to as the ‘gravity model’). In this regard, the largest 15 trading partners of the US
account for almost 75 per cent of its total trade.6 But the quantity of trade, and its importance
to an economy, is dictated by factors other than size. For instance, proximity (distance in
transportation and also communication) and cultural affinity have long been and remain an
important determinant. Other factors, such as trade policy, openness to trade and investment
and border policies, also play a critical role in the level of imports and exports. For instance,
membership of trade agreements promotes trade through the reduction of barriers and low-
ering of costs to trade. Technology (whether by aeroplane travel, faster shipping lanes or
computerised negotiating and transacting) also plays a part in making the world ‘smaller’,
in that it has reduced the barriers of proximity. Moreover, intra-firm and intra-regional trade
is playing an important (and growing) role in world trade. In fact, m ultinational companies
account for approximately 50 per cent of Chinese exports, 25 per cent of Brazilian exports,
15 per cent of Korean exports and up to 90 per cent of Ireland’s exports.7
6 See United States Census Bureau, ‘Business & Industry—Foreign Trade—US International Trade Data Top
Trading Partners (April 2017)—Year-to-Date Total Trade’, available at www.census.gov/foreign-trade/statistics/
highlights/toppartners.html (accessed on 23 June 2017).
7 ‘The Emerging Market to Emerging Market Opportunity: Are You Ready to Play?’ [January/February 2010]
Global Business, available at http://iveybusinessjournal.com/publication/the-emerging-market-to-emerging-market-
opportunity-are-you-ready-to-play/www; IDA Ireland, ‘Multinational Companies Account for Bulk of Irish Exports’
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"To complete the purchase of the yacht for Gwendolen. I wanted to give
it to her absolutely unencumbered. Mr. Tracy was selling some capital for
me and said I must wait till the following settling day for the cash, and I
asked Melville to lend me the hundred I needed until the matter was
completed. But he didn't send it. He never even answered my letter."
"He tells me he sent you a hundred pounds in notes," Sir Geoffrey said
distinctly. "Isn't that true?"
"No," said Ralph indignantly; "it's an absolute lie." He paced the room
in angry impatience. It seemed incredible that his own brother could be
capable of such an utterly unworthy trick. Sir Geoffrey closed his book with
a snap and pressed his lips together.
"I ought to have known you both better," he said; "but Melville's story
was so circumstantial, and there was the evidence of your letter, too. I was
completely taken in. But now I know what to do."
Ralph stopped abruptly.
"What are you going to do?" he asked.
"Instruct Tracy to take proceedings against Melville for getting money

under false pretences."
"But that's punishable with imprisonment," said Ralph aghast.
"Certainly it is," said Sir Geoffrey grimly.
"But you can't make a convict of my brother, and your nephew!"
"Our relationship to him is our misfortune," said Sir Geoffrey, "not our
fault. I shall do what I say."
"Look here, Uncle Geoffrey," said Ralph excitedly, "after all, this is
largely my affair. I will give you back the hundred pounds—I've got the
money now—and I will go to town at once and square accounts with
Melville. Did he tell you where he was staying?"
"No," said his uncle; "I did not enquire."
"Well, I'm sure to get news of him at Jermyn Street, if he isn't actually
there. Promise to abandon all idea of prosecution, and leave this in my
hands. Promise?"
Sir Geoffrey looked with pleasure at his nephew as he stood erect before
him, glowing with just indignation, but with chivalrous desire to spare his
brother this crowning shame.
"How you two fellows are brothers passes my comprehension," he said.

"Well, Ralph, I tell you what I will do. I'll give you a week—you need not
go up to town again to-day, for that would be hard on Gwen. I'll give you a
week, and if you can make Melville disgorge the money I'll take it back
with uncommon satisfaction. If you fail, I reserve liberty of action."
"That's fair, I suppose," said Ralph reluctantly; then he added more

hopefully, "but it will be all right; of course, it will be all right."
Sir Geoffrey shook his head doubtfully, but the mellow roar of the gong
reverberated through the house announcing luncheon, and he welcomed the
interruption.
"Shake hands, my boy," he said. "I'm sorry I misjudged you, even for a
moment. And now come along, or Gwen will think I've frightened away
your appetite."
He linked his arm within his nephew's, and went into the dining-room
with all his wonted cheerfulness restored.
CHAPTER V.
KINDRED AND AFFINITY.

Possession of money has an invigorating effect upon the majority of
people, and Melville, who like most gamblers lived only in the present,
awoke in the morning feeling a new man because of the open cheque for
£100 which he had secured the night before. No qualms of conscience
disturbed his equanimity because of the device he had adopted to obtain it.
As soon as his toilette and breakfast were completed he could get the
money from the bank, and the future, with its difficulties and complications,
might be left to take care of itself. The solid satisfaction derived from the
possession of money was enough for the moment.
Moreover, to-day contained an element of surprise in the shape of his

pending visit to his unknown relative, and next to money there is probably
nothing that has so much charm for the average gambler as the element of
surprise, had any kindred spirit been with him at the time Melville would
have made wagers upon the age and appearance of this Lady Holt, of whose
existence he had never heard before. She was old, of course, and most
likely intensely disagreeable; incompatibility of temper was doubtless the
reason of her separation from Sir Geoffrey, and desire to avoid scandal the
explanation of her complete seclusion from the world. The phrasing of her
letter showed that she was precise, and upon that fragmentary piece of
evidence Melville erected in imagination a complete living personality, in
much the same way as scientists "restore" an entire prehistoric mammoth
from a single tooth.
He dressed with particular care, and after an early breakfast went

cheerfully downstairs and drove to his uncle's bank. Then, with eighteen
five-pound notes in his pocket book and ten pounds in cash in his waistcoat,
he was in a position to spend in a sufficiently agreeable manner the hours
that intervened before he was due at South Kensington.
A refresher, in the shape of a sherry and bitters at the club, was followed
by a delicate but entirely adequate luncheon at the Dieu-donnée, and
Melville's enjoyment of it was not diminished by the fact that, happening to
meet a casual acquaintance there, he lunched at the same table, and
suggested that they should toss to decide which of the twain should pay the
joint account, with the result that the casual acquaintance lost. Evidently the
fickle jade was smiling on Melville; a couple of games of billiards followed
the luncheon, and another refresher the billiards, and in high good humour
Melville sauntered down the Ladies' Mile, preparatory to driving from
Albert Gate to The Vale.
Opposite the French Embassy he parted from his friend.
"Sorry I can't ask you to come with me, old man," he said genially, "but
I'm obliged to pay a duty visit to an aged aunt."
The friend expressed his sincere commiseration, but Melville only

laughed.
"It's a very little flaw in an otherwise perfect day. You must lunch with
me next time, and I will give you your revenge at billiards," and carefully
choosing a well-appointed hansom he drove away.
The Vale, South Kensington, is a little-known cul-de-sac lying just off

the Fulham Road. It contains but half-a-dozen houses, with trim lawns in
front and quite large gardens in the rear; great elms shade the houses, and
the remoteness from the main road makes them very quiet; in all of them
are French windows and small verandahs, and there is an air of quietude
and refinement about the place that makes it very attractive.
"The old lady does herself pretty well," thought Melville to himself as
he walked up the gravelled path and noticed the close-cropped lawn and the
blaze of geraniums and petunias. "I wonder what she knows about me, and
what line I'd better take! The interesting musician might be diplomatic
perhaps."
He thought that the maid who opened the door looked curiously at him
as he enquired whether Lady Holt was at home, but, after all, that was a
trifling matter, capable of bearing many interpretations. His interest was,
however, more fully aroused by the drawing-room into which he was shown
to await his aunt's coming, for it was not at all the sort of environment in
which he had imagined he would find Sir Geoffrey's wife. It was essentially
the drawing-room of a worldly woman of the world, furnished with taste,
but evidently at great cost; photographs and silver boxes, enamels and
ivories were scattered in profusion over the many tables, water colours by
rising artists covered the walls, cushions and flowers were everywhere.
"I shall have to readjust my preconceived notions of my elderly

relative," he said to himself as he took a rapid survey of the pretty room;
"this is a veritable canary's cage."
Then the door opened, and at the rustle of silk petticoats he turned to
make a formal bow to his aunt. But as he turned, an exclamation of surprise
escaped his lips and his single eye-glass dropped upon the floor, for the
woman who entered was no precise and ringletted old lady, but the one who
had asked him for his card at Monte Carlo, and who had expressed such
sympathy with him when he was reduced to the necessity of applying for
the viaticum. It was indeed no other than the charming Mrs. Sinclair.
She came forward with perfect self-possession, but a gleam of

amusement lurked in her eyes.
"This is really a most astonishing experience," Melville said, as he

bowed over her hand. "You are quite the last person I expected to see."
"Not the last you wanted to see, I hope," she replied, "but I confess
delight is not the predominant expression upon your face at the moment.
Won't you sit down?"
Melville picked up his monocle and polished it carefully before

readjusting it in his eye.
"But tell me," he persisted, "what are you doing here?"
"Living here," Mrs. Sinclair answered. "What else do you suppose?"
"I can't quite sort things," Melville said apologetically. "To begin with,
you see, I had never heard until last night that there was a Lady Holt, and
when I got her note asking me to call here to-day I tried to picture what she
would be like."
"What was the result of your efforts?" Mrs. Sinclair enquired.

Melville laughed slightly.
"Well, I'm bound to admit that I imagined my uncle's choice in women

would be early Victorian, so to speak, and I don't think it's anything but a
compliment to say that the early Victorian brand isn't very likely to agree
with you. If you like Lady Holt, there is hope for me."
"I like her very much," Mrs. Sinclair said. "Mr. Melville, it isn't quite
fair, perhaps, to lay snares for young men, and you evidently don't grasp the
situation. You remember your last night at Monte Carlo?"
"It was not the sort of night to forget readily," Melville replied grimly. "I
never had such monstrous bad luck at the tables before."
"You gave me one of your cards and I promised to write to you."
"You did," said Melville.
"I have kept my promise," said Mrs. Sinclair. "I wrote to you yesterday
and asked you to come to see me. I am Lady Holt."
The astonishment depicted on Melville's face was ludicrous, and Mrs.

Sinclair rippled over with mirth.
"I never thought to see you so taken aback," she said. "What I like so
much about English gentlemen is that they are so imperturbable, and now
you are gazing at me as if I were a freak."
"Really, I beg your pardon," Melville said. "but to think how grossly I
have misjudged Sir Geoffrey!"
"Come, that's much better," Mrs. Sinclair replied. "Yes, Mr. Ashley, the
confession has to be made; I am your aunt."
"I'm uncommonly delighted to hear it," Melville said heartily, "and I've
only one regret in learning the fact."
"And that is——?" his new-found relative enquired.

"That I did not know it long ago," Melville replied. His wonted
composure returned, and with it his wonted desire to stand well in the
opinion of those in whose company he happened to be—a desire, it may be
said, characteristic of many men who drift into bad lives from weakness
rather than from natural vice. "Tell me, have you refrained from claiming
relationship with me all this time because you heard I was a bad lot?"
"I perceive you are not expert in drawing inferences," Mrs. Sinclair
said; "one does not associate the particularly goody-goody type of young
man with Monte Carlo, and that is where I saw you first."
"That is true," Melville admitted. "I must plead guilty to not being
goody-goody. By the way, am I to call you 'aunt'?"
Mrs. Sinclair shuddered.
"Certainly not," she said emphatically; "there is no necessity to draw

public attention to the question of my age."
"What am I to call you?" he persisted.
"Call me Mrs. Sinclair," she said. "How old are you?"
"Thirty-five," Melville answered. "Why?"
"Then you are old enough to call me Lavender when we are alone," she
said. "Out of doors it had better be Mrs. Sinclair, I suppose. It is a
censorious world."
She leaned back in her chair and surveyed her nephew critically; the
scrutiny was satisfactory, and she was glad of the impulse that had
prompted her to disclose her identity to him. Yet, shrewd and clever woman
as she was, she had taken a step which, while it could never be retraced,
was the first towards the undoing of them both. There were other things in
her life which in her hours of reflection she regretted, not least among them
being her separation from a husband whose good qualities she fully
recognised, but nothing in the past had been so fraught with peril to herself
as this alliance with her husband's nephew, which she owed to a single
moment of caprice.
"Confess now," she said presently, "you are burning with curiosity to
know all about everything?"
"That is a comprehensive way of putting it," he laughed, "but it is true.

Tell me everything that is necessary, and as much more as you think fit."
"The only thing that is necessary," Mrs. Sinclair replied, "is that I
actually am Sir Geoffrey Holt's wife. I married him years ago, when I was
too young to realise all that marriage means, especially marriage to a man
many years older than oneself. And—it didn't answer. That is really all."
She had no intention of telling Melville very much about herself, and, of
course, he could not cross-examine her. "He had not come into the title
then," she went on, "and indeed there was no reason for supposing he ever
would, for his brother was quite young enough to have married and had
sons. Perhaps——" She paused, and Melville took advantage of the pause
to give expression to the thought that was uppermost in his mind.
"I wonder that his marriage has been so completely forgotten. I never
heard of it, and I'm quite sure my brother never has, yet he has been like a
son to Sir Geoffrey, and knows a lot about his affairs."
Mrs. Sinclair flushed a little.
"Sir Geoffrey is a very proud man. He always was; indeed, that had a
great deal to do with our mutual incompatibility, and proud men are apt to
hold their tongues about their failures. Oh, yes!" she said, laughing, though
there was no mirth in her laughter, "it was a dismal failure, and so we
agreed to separate and never trouble each other again."
"And you never have?" said Melville.
"We never have."
"Sir Geoffrey is a very rich man," Melville remarked, following the line
of his own thoughts.
"I believe he is," said Mrs. Sinclair indifferently. "All the money in the
world doesn't make some things worth while."
"But I suppose he is very generous to you?"
"I wouldn't touch a penny of his money," said Mrs. Sinclair vehemently.
Melville, of course, dropped the subject, but noted her reply for future
use. What he wanted to ascertain most at the moment was Lady Holt's
feeling for her husband, but she gave him no opportunity.
"What's your brother like?" she enquired. "Anything like you?"
"Nothing," said Melville shortly. "Ralph is a paragon of all the virtues

and I'm—not."
"And he's like a son to Sir Geoffrey?" said Mrs. Sinclair. "Is he to be his
heir?"
"I don't know," Melville answered moodily. "I suppose so; but, as a
matter of fact, Sir Geoffrey hasn't made his will, so I don't know what he
will do with his money."
Mrs. Sinclair yawned. The conversation really did not interest her much,
and she had her own reasons for not wishing to let it get too intimate. She
had taken a fancy to Melville when she first saw him in the Riviera; he
belonged to the type of man in whose company she was most at home, and
she foresaw a certain amount of pleasurable excitement in which she could
participate with him without being worried by demonstrations of a more
affectionate interest, which men not related to her were apt to make. A
nephew is safer than a cousin.
"You must ask me to dine with you," she said, "and we will develop our
acquaintance gradually. I hate finding out all about people at once and
having nothing left to learn."
"Dine with me to-night," said Melville promptly. The hundred pounds

were burning a hole in his pocket, and he felt convinced that more would be
forthcoming now from the same source. "Where shall it be?"
"Wherever you like," Mrs. Sinclair replied. "I'm always interested in

people's varying ideas of hospitality. Come here for me at half-past seven
and take me to the appointed place. Only don't tell me now where it is to
be."
"All right," said Melville with alacrity. He liked her point of view and
felt amazingly sympathetic already. Moreover, he recognised as clearly as
she did the value of their relationship as a preventative of mutual
misunderstandings. "I will go and fix it up. 'Pon my honour, I'm awfully
delighted about this."
"Respect my confidence," she said gravely. "I may rely on that?"
"Absolutely," he answered. "I never interfere with other people's private

business. It's not my form; and, besides, I'm so grateful to you for
recognising me that I'm not going to forfeit a good thing."
Mrs. Sinclair was satisfied. She rang the bell for the maid to open the
door, and smiled graciously upon her nephew.
"I hope you're going to be a great success," she said, as he rose to go.
"There is an element of romance in the way fate has brought us together
that is fascinating, and really you are a very creditable nephew."
Melville smiled sardonically. His aunt's husband held such a different

opinion!
"I am a particularly fortunate one, I think," was all he said, and as he

went out into the Fulham Road he thought the sun had never shone so
brightly. Fortune had turned her wheel again, and his gambler's soul
exulted.
CHAPTER VI.
BRAVADO.
It was, indeed, with a very similar sense of satisfaction to that enjoyed

by a man who, when playing cut-throat euchre, finds the joker in his hand,
that Melville contemplated the advent of Mrs. Sinclair into his life. In many
respects she was a charming woman; vigorous and resourceful in
consequence of her somewhat adventurous career, but womanly and free
from affectation. Moreover, if she could not claim entire exoneration from
the charge of being an adventuress, she was entitled to several important
limitations in the term; she gambled, it is true, and led an extravagant life,
but she did both out of her own resources, and did not prey upon society as
do most of the evening-gowned frequenters of the Casino. What other
skeletons might be hidden in the secret cupboard of her life, Melville did
not yet trouble to surmise; he assumed that among them was the grisly relic
of her marriage with his uncle. The marriage had been a failure; the couple
had separated and agreed to let the story be forgotten; "Sinclair" was merely
a nom-de-guerre, and everything was capable of a perfectly satisfactory
explanation, with the exception of her financial independence. Melville
could not understand the feeling which prompted her to refuse assistance
from her husband, more especially in such a case as this, where she might
dictate her own terms for consenting to suppress the fact of her existence.
What her motive was in so doing was one of the first things Melville
intended to ascertain; there might be money in the knowledge. But the first
thing he intended to do was to tell Sir Geoffrey that he knew this amazing
secret of the marriage, for he felt convinced that he could make money by
holding his tongue on that subject to the world at large.
Such were the thoughts that passed through Melville's mind as he

walked from the station to The Grange at Fairbridge, where the Austens
lived. With him to decide was to act, and the previous night he had resolved
to adopt a bold policy and face Sir Geoffrey and Ralph at once; they had
had time to compare notes about the hundred pounds, and a stormy
interview with them both was inevitable, but it possessed no terrors for
Melville now. He guessed correctly that for the credit of the family neither
of them would detail the facts to the Austens, with whom he was
particularly anxious to stand well. Too selfish a man to be capable of real
love for any woman, he yet liked Gwendolen better than any other woman
he had ever seen, and he was quite willing to "range himself" if she would
be his wife. That she was engaged to his brother troubled him very little.
Engagements had been broken off before now, and the idea of cutting Ralph
out had a certain piquancy that rendered the attempt worth making.
Looking delightfully cool and well-bred in his grey flannel suit and
straw hat, with a turn-down collar that seemed to suggest an innocent
simplicity of character, Melville walked slowly down the hill from the
station and presented himself at the Austens' door. The ladies were in the
garden, the servant informed him, and there Melville sought them,
confident of a friendly greeting from them both.
Mrs. Austen was unaffectedly glad to see him. She had a tolerant feeling
for nearly all young men, and Melville's marvellous gift as a musician had
an especial charm for her. To Gwendolen he was Ralph's brother, and
hitherto Ralph had championed Melville's cause, with the result that the girl
was disposed to regard him as a somewhat maligned young man. So to-day
they made much of him, and, under the influence of their warm welcome
and gentle refinement, Melville was at his best.
"I've been sowing wild oats at Monte Carlo," he said gently, "and I
found it vanity. So I've come home. No, I had no adventures and met
nobody I knew. I lost all my money, and I'm very sorry for myself."
He congratulated Gwendolen on her engagement to Ralph, and there

was a touch of pathos in his voice that proved him to be a consummate
actor. Altogether, he enjoyed himself hugely, and awaited the critical
moment of meeting his brother with actual pleasure. Ralph was expected
early in the afternoon, and Melville lunched at the Grange and occupied the
centre of its little stage with much complacency.
After luncheon Gwendolen remained indoors to watch for Ralph, and

Melville sat in the verandah with Mrs. Austen and waxed confidential. She
liked to be regarded as the recipient of the confidences of young men, and
Melville played upon her amiable weakness, being careful to invent such
peccadilloes only as would not strain her charity unduly.
"Heaven divides its gifts very unequally," he remarked presently.
"Why that platitude?" asked Mrs. Austen.
"I was thinking of Ralph and myself," he said. "Of course, Sir Geoffrey
has been equally generous to us both, but I notice that Ralph gets all the
affection. He was always Uncle Geoffrey's favourite, and now he is
engaged to Gwen." He sighed pathetically, and Mrs. Austen considered.
"I think your uncle is just as fond of you as he is of Ralph," she said,
"but you're not a home bird and your brother is. Really, I don't think Sir
Geoffrey could have been kinder to you if you had been his own son."
"Not kinder," Melville said, "but fonder, more affectionate. You have
known him a long time, Mrs. Austen. Why do you suppose he never
married?"
"I have often wondered," Mrs. Austen said, "but I never met him until
he came into the title and estates, and he was not a young man then. He may
never have wanted to marry, or he may have had some disappointment. At
all events, it's an excellent thing for you boys that he never did."
"Excellent," Melville assented heartily. Mrs. Austen evidently had no

suspicion of the facts; that meant that Sir Geoffrey did not want her to know
them, and that, too, was excellent. "Ah! here comes Ralph, dancing on air."
Judging by the expression on Ralph's face, dancing on air was a

disagreeable mode of progression. He was, indeed, furious at finding
Melville thus established in the heart of the citadel; he was conscious, too,
of a disadvantage in being thus taken by surprise. Confident in the justice of
his indignation, he could have invaded Melville's chambers and demanded
explanations and apologies for the fraud; here all the force of his attack
would be wasted in the interval before he could deliver it.
He made no offer to shake hands, and, flushed with anger, he compared
unfavourably with Melville, sitting so imperturbable, and prepared for all
contingencies.
Melville employed every little artifice of which he was capable to

heighten the contrast between his brother and himself, of which he saw
Mrs. Austen was conscious. He made room for Ralph upon the verandah,
and chatted gaily of a hundred trifles, but to all his flippancies Ralph
returned only monosyllabic answers, appearing awkward and ill-mannered
even in Gwendolen's biassed judgment.
At last Melville rose to go, and with alacrity Ralph rose too.
Melville protested politely.
"Don't let me take you away, old man," he said.
"But I want to have a talk with you," Ralph answered.
"Thought you weren't particularly pleased to see me," Melville returned

placidly, "but I'm glad I was wrong. Good-bye, Mrs. Austen, and thanks
awfully for a jolly time. May I come again soon?"
"Do," she answered, "there's always cold luncheon and a warm

welcome here for you." She made the remark pointedly, for she was a little
vexed with Ralph. She even went so far as to restrain Gwendolen from
accompanying the brothers to the gate, and as they disappeared at the end of
the drive Ralph was conscious of almost being in disgrace with his future
mother-in-law.
Outside, however, on the main road his embarrassment vanished.
"What the deuce do you mean by coming here like this?" he said
angrily.
"My dear Ralph," said Melville coolly, "The Grange doesn't belong to
you, nor does the Manor House—yet. I've been to The Grange because I
wanted to see the Austens, and now I'm going to the Manor House because
I want to see Sir Geoffrey."
Ralph was unfeignedly astonished.
"You want to see Sir Geoffrey?" he gasped.
"I do," said Melville. "Why not?"
"I wonder you have the audacity to look him in the face again," said
Ralph hotly. "You are a liar and a thief."
"Go slow, Ralph," said Melville, "go slow. It seems to me you're off
your chump. If your engagement hasn't turned your brain, tell me what all
this pother is about, and leave mud-slinging till afterwards. What do you
mean?"
Ralph was almost deceived by his brother's calmness; at any rate, it had
the effect of making him struggle to regain command of his own temper.
"I wrote to you when you were at Monte Carlo," he said more quietly,
"and asked you to lend me a hundred pounds."
"That's so," said Melville. "Sorry I couldn't oblige you, but I didn't even
read your letter till I was on my way home, and then I was broke myself."
"But you got a hundred pounds out of Sir Geoffrey," spluttered Ralph.
"I did," said Melville. "I hope you did the same."
"Good heavens, man!" cried Ralph, as angrily as before; "don't try your
vile swindles on me too. You told Sir Geoffrey you lent me that hundred
pounds and got him to hand you over an open cheque for the amount in
repayment of what you said was my debt, leaving him to get explanations
from me afterwards."
"I hope the old man wasn't very crusty," said Melville sweetly.
"But your whole story was an infernal lie," roared Ralph, "and you got
that money by a vulgar, low-down swindle. You are a liar, Melville, and a
thief. I wish to heaven Sir Geoffrey had kicked you out of the house before
he parted with the cheque."
"I daresay you do," Melville replied, unmoved; "but really, Ralph,
you've had your whack out of the old buck, and now you're going to marry
the Austen money you needn't grudge me a bit, need you? It's not exactly
brotherly."
The sneering affront goaded Ralph almost to madness.
"You can thank me that you've not been arrested already for getting that
money under false pretences," he said, livid with passion. "If Sir Geoffrey
had had his own way you would have been, and 'pon my word, I'm
beginning to be sorry I begged you off."
"Perhaps it isn't too late even yet," said Melville, no less calmly than
before, "but I fancy you are exaggerating. Sir Geoffrey is always
intemperate in his language, but I can't believe he would adopt such
extremely unpleasant measures as the prosecution of his own nephew.
However, I'll talk to him about it. I came down with the intention of doing
so after I left The Grange."
Ralph was nonplussed. Such unlimited assurance as that displayed by

Melville was outside his experience, and it even began to have some effect
upon him.
"I think it was a mean and dirty trick," he said, "to make out that I owed
you anything when I didn't, but that part of the business you can settle with
your own conscience. What are you going to do now about the money?"
"How do you mean?" Melville enquired innocently.
"Well," said Ralph, "I persuaded Sir Geoffrey to drop the idea of legal
proceedings by saying that as you had used my name the matter ought to be
left in my hands. I've been to town to get the money, and I repaid him this
morning."
"That's really awfully good of you," Melville said effusively. "I am
infinitely obliged to you, but I'm afraid I shall have to owe it to you for a
little while."
"It's simple waste of time to talk to you," said Ralph with scorn, "but
there's one more remark I have to make, and you may as well remember it,
for I mean what I say. I can't undo the fact that you are my brother, but I can
do a good deal to prevent it from being forced on my attention, and one way
is to avoid seeing you. Now, in future I'll trouble you to keep away from
The Grange."
Melville coloured. This was a contingency he had not foreseen, and for
a moment he lost his judgment.
"Jealous, eh?" he enquired, with ill-affected sarcasm. He was no coward

physically, but he almost quailed before the blaze in his brother's eyes.
Ralph did not trouble to fling back the taunt. With suppressed passion he
spoke rapidly and distinctly, and each word flicked Melville on the raw.
"You are a contemptible swindler, and if you only have rope enough
you'll hang yourself in the end. I'm quits with Sir Geoffrey over your last
fraud, and it's worth every penny of the money to have learnt to know you
as you are; but now I do know you I'll take jolly good care that you don't
hang about my friends. Sir Geoffrey has ordered you out of the Manor
House, and I order you out of The Grange. Go there again, and I'll tell Mrs.
Austen all about this business and twist your neck into the bargain."
Melville forced a laugh.
"It will be time enough for you to order me out of houses when you
possess any. When you are master of The Grange I shall keep clear of the
place, you may be sure. Until then I shall call upon Mrs. Austen whenever I
choose."
"If you go to The Grange I shall tell Mrs. Austen what has happened,"
Ralph repeated, "and she will order you out then herself."
"I dare you to do it," said Melville. In reality the idea filled him with
uneasiness, but he was too shrewd to show it. Instead, he remarked
reflectively, as if considering Ralph's interests only, "Mrs. Austen might
begin to think she was allowing her daughter to marry into a queer family,
supposing for the moment that she took everything you said for gospel."
Ralph drove his hands deep into his pockets. Honesty such as his often
seems very stupid when confronted with the cleverness of a knave, and he
felt unequal to a discussion with his brother. But he wished he had been less
loyal to him in the past, less sturdy an advocate for his defence when Sir
Geoffrey arraigned him. It was humiliating to think how completely
Melville had taken him in. They walked in silence to the Manor House, and
Ralph paused by the gate.
"I'm not going to argue with you, and I have nothing to add to what I
said about The Grange. Go there and you'll see. Here is the Manor House. If
you take my advice you will leave me here and get back to town by the next
train."
"When I ask your advice I'll consider about taking it," Melville
answered gently; he saw how his own coolness angered and flurried Ralph.
"As for The Grange, Mrs. Austen has kindly invited me to dine there and
bring my violin, and I need scarcely say I have accepted. And as for Sir
Geoffrey, I have come down to see him, and if he's at home I will see him
now; if he is out I shall wait."
"You are beyond me," Ralph said hopelessly. "Well, I don't want to keep
you away from Sir Geoffrey if you are anxious to see him, but if I were in
your shoes, which, thank heaven, I am not, I would blow out my brains
rather than face him. I don't believe you have any shame left."
He opened the gate and, with Melville, walked up the drive. As they
came in sight of the house, however, his mind shrank from the prospect of
having to be present at so painful an interview between his uncle and
brother as he felt sure this one must be. He stopped abruptly.
"You will probably find Sir Geoffrey in the library," he said. "I am
going down to the houseboat."
"All right," said Melville unconcernedly. "I dare say I shall see you
again later. If Sir Geoffrey asks me to stay, I will. By-bye," and noting with
amusement the incredulous surprise written on Ralph's countenance he
nodded cheerfully to him and walked in through the open doorway of the
Manor House.
CHAPTER VII.
MELVILLE LEADS TRUMPS.
Melville possessed in an eminent degree the gift of winning the

affection of his inferiors. Where no conflict of interest was possible he gave
full play to the sympathetic part of his nature, which was his as it is the
nature of all musicians. It was part of his policy, too, to stand well in the
favour of those upon whom his comfort depended, and thus, although he
was indifferent to the appeals of those who were inconvenienced by his
indebtedness to them, and would resort to any subterfuge rather than pay his
tradesmen's bills, yet he was a lenient and considerate master to his valet in
Jermyn Street, was regarded with admiration by the hall porters of his club,
and was held in affection by the old retainers at the Manor House, who had
known him for so many years.
With Martin Somers, Sir Geoffrey's butler, Melville was an especial

favourite. The old man had taught him all he knew of outdoor sports, and
had often stood his friend when in earlier days the boy was in disgrace with
his uncle.
Melville turned from the hall into the dining-room and rang the bell. It
was cool and shady in this room, and Melville was conscious of a pang of
regret at the knowledge that the place would never be his. His life had been
full of variety and excitement, but it had cost him all chance of ever being
master of the Manor House. Already he was an unwelcome visitor, and
when in course of time it passed into Ralph's possession, its doors would
very probably be closed to him altogether.
"Ralph is a stupid clown," he muttered, "but I'm not sure that he hasn't
done better for himself than I have. To own this place and be Gwen's
husband should be good enough for anyone."
The sigh that escaped him was born of sincerity, but he turned briskly to
face his immediate task as the butler came in answer to the ring. Melville
shook hands with him, making no reference to his previous evening visit to
his uncle.
"Here I am again, Martin," he said cheerfully, "'Pon my word, it's good

to see you."
"You've been abroad, Master Melville?" Martin asked.
"Yes," said Melville; "same old racket, same old place, same old luck."
Martin shook his head.
"I've no faith in Monte Carlo," he remarked austerely; "never heard of

any good coming from there."
"That's rude," said Melville, "seeing that I've just come from there. How
is Sir Geoffrey?"
"Pretty well, sir," the butler replied; "I may say very well."
"He's a wonderful old chap," said Melville. "He'll be marrying soon and
having a family of his own; see if he doesn't."
"Sir Geoffrey never took any account of the ladies," Martin remarked.
"It's a pity, in some ways; but, bless you, sir, he's got all the family a man
needs in Master Ralph and yourself."
"Too much, perhaps," said Melville. "Go and tell him I'm here, Martin,
will you."

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(eBook PDF) World Trade Law: Text,

Materials and Commentary 3rd Edition

Part I: Introduction to the Legal and Economic Aspects

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Part VII: Beyond Trade in Goods: Domestic Regulation, Services, Investment,

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Introduction to the Legal and Economic

Introduction to World Trade Law

I. INCREASED TRADE AND DEEPER INTEGRATION: GLOBALISATION!

1 As cited in ‘The Early Pioneers’, The Economist, 28 July 2007, 76.

(a) Increased Trade and Increased Importance of Trade

Table 1.1: World merchandise trade

(US dollars at current prices (billions))

Annual percentage change

The importance of international trade relative to domestic transactions is also increasing.

4 World Bank, ‘Exports of Goods and Services (% of GDP)’, available at http://data.worldbank.org/indicator/

(b) What is Traded?

Average annual percentage change

5 WTO, ‘World Trade Statistics Review 2016’, available at www.wto.org/english/res_e/statis_e/wts2016_e/

Average annual percentage change

Figure 1.3: World merchandise average annual percentage change, 1950–2014

Figure 1.5: Global growth in services

Figure 1.6: Service as a percentage of GDP, 2015

United States 11.7

(c) Who Trades?

Ralph stopped abruptly.

"What are you going to do?" he asked.

"Instruct Tracy to take proceedings against Melville for getting money

"But that's punishable with imprisonment," said Ralph aghast.

"Certainly it is," said Sir Geoffrey grimly.

"But you can't make a convict of my brother, and your nephew!"

"How you two fellows are brothers passes my comprehension," he said.

"That's fair, I suppose," said Ralph reluctantly; then he added more

KINDRED AND AFFINITY.

Moreover, to-day contained an element of surprise in the shape of his

He dressed with particular care, and after an early breakfast went

Opposite the French Embassy he parted from his friend.

The friend expressed his sincere commiseration, but Melville only

The Vale, South Kensington, is a little-known cul-de-sac lying just off

"I shall have to readjust my preconceived notions of my elderly

She came forward with perfect self-possession, but a gleam of

"This is really a most astonishing experience," Melville said, as he

Melville picked up his monocle and polished it carefully before

"But tell me," he persisted, "what are you doing here?"

"Living here," Mrs. Sinclair answered. "What else do you suppose?"

"What was the result of your efforts?" Mrs. Sinclair enquired.

"Well, I'm bound to admit that I imagined my uncle's choice in women

"You gave me one of your cards and I promised to write to you."

"You did," said Melville.

The astonishment depicted on Melville's face was ludicrous, and Mrs.

"And that is——?" his new-found relative enquired.

Mrs. Sinclair shuddered.

"Certainly not," she said emphatically; "there is no necessity to draw

"What am I to call you?" he persisted.

"Call me Mrs. Sinclair," she said. "How old are you?"

"Thirty-five," Melville answered. "Why?"

"That is a comprehensive way of putting it," he laughed, "but it is true.

Mrs. Sinclair flushed a little.

"And you never have?" said Melville.

"We never have."

3. World Trade Law and International Law��91

(a) GATT/WTO Tariff Negotiations��220

11. Dumping and Anti-dumping Measures��513

(a) The TRIMs Agreement Negotiations��728