Conclusion and Implementation of Foreign Trade Contracts within the Framework of WTO Accession

International Law, Business and Political Science Journal ISSN-L 3235-9799 E-ISSN 3235-9799 IF(Impact Factor) 13.24 https://journallaw.totalh.net/ Volume: 11. Issue 12 November 2025 1 Conclusion and Implementation of Foreign Trade Contracts within the Framework of WTO Accession Aybek Yakubov Tashkent State University of Law, Acting associate professor of the Department of Civil Law, PhD Annotation: The article examines the impact of Uzbekistan’s accession to the World Trade Organization (WTO) on the conclusion and execution of foreign trade contracts. It highlights the need for comprehensive legal reforms to harmonize domestic practices with international standards, enhance transparency, and ensure legal predictability in trade transactions. A central focus is the concept of the “integrated contract,” which extends traditional contract obligations to include ESG (Environmental, Social, Governance) standards, ethical provisions, and sustainable development principles, reflecting contemporary challenges such as digitalization and globalization. The study analyzes the influence of WTO principles—including Most-Favored-Nation treatment, national treatment, and transparency—on contractual practices and emphasizes the importance of compliance with international trade norms, digital trade regulations, and standard contract practices like Incoterms and the Vienna Convention. It also explores the systemic challenges within the WTO, including the suspension of the Appellate Body, trade conflicts, protectionist policies, and the increasing role of plurilateral and preferential trade agreements. The article concludes that Uzbekistan’s WTO accession requires a flexible, multi-level strategy combining multilateral, regional, and bilateral cooperation, and stresses that reforms must be effectively implemented to create stable, non-discriminatory conditions for all trading partners. The integrated contract approach is presented as a practical tool to enhance predictability, trust, and long-term cooperation in international trade. Key words: WTO accession, Integrated contract, ESG standards (Environmental, Social, Governance), Preferential trade agreements (PTAs), Contract execution, Sustainable development, Trade compliance, Most-Favored-Nation principle, Non-discrimination, Global trade integration International Law, Business and Political Science Journal ISSN-L 3235-9799 E-ISSN 3235-9799 IF(Impact Factor) 13.24 https://journallaw.totalh.net/ Volume: 11. Issue 12 November 2025 2 The conclusion and execution of foreign trade contracts is a key element in the international trade system. For Uzbekistan, which is in the process of joining the WTO, reforming the legal framework of foreign economic activity is a necessary condition for successful integration into the global trading system. WTO membership entails commitments to ensure transparency, a non-discriminatory approach, and legal certainty in foreign trade, which inevitably affects both the form and content of foreign trade contracts. In studying the essence of foreign trade contracts, it is important to highlight the legal-scientific concept of the “integrated contract.” The integrated contract concept is a modern scientific and practical approach that aims to expand the content of international and foreign trade agreements. Unlike classical contracts, which regulate only legal obligations (what to buy, when to deliver, how to pay), an integrated contract includes additional non-financial and ethical provisions, which are especially important in the context of globalization, digitalization, and sustainable development. This approach allows parties to embed social responsibility, environmental standards, and compliance with international norms directly into contracts, thereby increasing predictability, trust, and long-term cooperation between trading partners 1 . An integrated contract is an agreement that combines legal obligations (delivery, price, payment, liability) with ESG standards (Environmental, Social, Governance), ethical and anti-corruption provisions, and sustainable development principles 2 (for example, support for local production, respect for human rights, transparency), as well as innovative elements (digitalization, smart contracts, electronic registries). This concept is governed on the basis of ESG standards. ESG standards constitute an international system for evaluating a company’s performance not only by financial results but also by environmental, social, and governance criteria. They are becoming key in international trade, investment, corporate reporting, and legislation 3 . The first standard is environmental standards, which indicate how carefully a company treats nature, reduces harmful impact, and contributes to environmental 1 Poncibò, C. (2021). The Digitalization of Contracts in International Trade and Finance: Comparative Law Perspectives on Smart Contracts. Digitalization and Firm Performance. 2 Aaken, A. (2009). International Investment Law between Commitment and Flexibility: A Contract Theory Analysis. Journal of International Economic Law, 12, 507-538. 3 Мажорина, М. (2022). Принципы ESG в международном бизнесе и устойчивые контракты. Актуальные проблемы российского права. International Law, Business and Political Science Journal ISSN-L 3235-9799 E-ISSN 3235-9799 IF(Impact Factor) 13.24 https://journallaw.totalh.net/ Volume: 11. Issue 12 November 2025 3 protection. For example, a company may switch to solar panels and recyclable packaging, thereby lowering its carbon footprint, obtaining a “green” certificate, and ultimately increasing its chances of exporting to the EU 4 . The second, social standard, evaluates how a company interacts with people — its employees, local communities, and customers. This includes working conditions, absence of workplace discrimination, prohibition of child labor, and more. For example, a factory in Uzbekistan implements equal rights policies for women, conducts employee training, and provides insurance; as a result, it secures favorable contracts in European and Japanese markets 5 . The third standard — corporate governance — evaluates how a company is managed, including whether there is a transparency system, adherence to ethical norms, and how decisions and risks are controlled. Key aspects include the independence and professionalism of the board of directors, anti-corruption measures, transparency of financial reporting, ethical codes, and more. For example, a company signs an anticorruption agreement, implements independent audits, publishes an annual ESG report, and becomes attractive to foreign investors and trading partners. An integrated contract represents a new stage in the development of contractual relationships, especially in international trade. It addresses contemporary challenges: climate, social, and digital issues. For Uzbekistan, implementing this model is particularly relevant for exports to the EU, Korea, Japan, and other ESG-oriented markets, for modernizing the legal framework in preparation for WTO accession, and for supporting the reputation of national producers. According to WTO terminology, the international trade system is structured across three levels of cooperation, each characterized by specific legal features and obligations: bilateral, plurilateral, and multilateral trade. Although the rules governing trade under these forms may vary, the WTO accession process for each involves detailed negotiations aimed at agreeing on mutual concessions and membership conditions. It should be noted that during bilateral and plurilateral agreement negotiations, the participants are specific interested countries. In contrast, WTO negotiations aim to 4 Kimbrough, M., Wang, X., Wei, S., & Zhang, J. (2022). Does Voluntary ESG Reporting Resolve Disagreement among ESG Rating Agencies?. European Accounting Review, 33, 15 - 47. 5 Lee, B. (2024). ESG and Emotional Non-conformity of Goods in Contracts for International Sale of Goods. Journal of Korea Trade. International Law, Business and Political Science Journal ISSN-L 3235-9799 E-ISSN 3235-9799 IF(Impact Factor) 13.24 https://journallaw.totalh.net/ Volume: 11. Issue 12 November 2025 4 determine the terms of trade with all member states of the organization. Over the past decade, the multilateral regulatory system has faced a significant challenge: the unilateral imposition of economic sanctions against Russia and other states. The introduction of countermeasures has exacerbated the situation, sparking intense debates over the legality and justification of such restrictions from the perspective of national security 6 . In the context of rising political tensions, the intensification of regional trends, the strengthening of protectionist measures, and the transformation of the global trade and economic architecture, the WTO is facing a deep systemic crisis. This crisis significantly hampers the organization’s functioning and limits member countries’ ability to effectively utilize its potential. The need for WTO reforms has been recognized by the majority of its members. At the same time, the actions and statements of the United States have acted as a catalyst for initiating this process. Among WTO members, the following significant challenges in the organization’s work are observed: Insufficient efficiency and transparency of the dispute settlement system. The situation has worsened due to the suspension of the Appellate Body’s activities as a result of the U.S. blockade; Limited scope of WTO rules. Issues not fully covered by WTO norms include the regulation of state-owned enterprises and electronic commerce; Incomplete compliance with obligations by individual member states. These problems require close attention and swift resolution to ensure the effective functioning of the WTO in the interest of all its members. The inability of WTO members to reach agreements on the Doha Round and new issues has led to the development of plurilateral initiatives, i.e., agreements among subgroups of WTO members. Indeed, the suspension of the WTO Appellate Body has caused a serious disruption of the dispute resolution mechanism within this international organization. According to WTO data, more than 70% of trade disputes between countries are resolved using the appeals procedure. Due to the lack of a fully functioning WTO Appellate Body, the European Union concluded an agreement to establish a temporary appellate mechanism with sixteen WTO members, including China, Canada, and Australia. This multilateral agreement provided for the application of the standard WTO appellate rules and was open for 6 Statistics on anti-dumping [Электронный ресурс] // WTO. International Law, Business and Political Science Journal ISSN-L 3235-9799 E-ISSN 3235-9799 IF(Impact Factor) 13.24 https://journallaw.totalh.net/ Volume: 11. Issue 12 November 2025 5 accession by all interested WTO members until the permanent Appellate Body resumes its operations 7 . Events in international trade have been exacerbated by trade conflicts initiated by the United States. In 2018, the U.S. administration increased import tariffs on steel and aluminum by 25 and 10 percentage points, respectively. In response to these measures, the largest steel and aluminum producers and exporters, including Russia, implemented compensatory and protective measures and requested consultations with the U.S. side. The U.S.–China trade war also involved the issue of forced technology transfer. Due to the unprecedented scale of the trade conflict, the parties reached a “Phase One” agreement by early 2020, aimed at resolving the disputes. This agreement played a significant role in de-escalating the trade conflict between the two countries, leading to the removal of a number of mutual tariff restrictions. China undertook several commitments, most of which were either already planned under its domestic policies (e.g., in the financial services sector) or corresponded to China’s WTO obligations regarding technology transfer. China’s specific commitments regarding intellectual property, made under U.S. pressure, are likely to benefit all participants in the multilateral trading system. However, some of China’s commitments—particularly the promise to increase purchases of American goods—raise doubts about their compliance with WTO rules. EU Trade Commissioner Phil Hogan has already expressed concerns about possible violations of these rules. The protectionist policy actively pursued by U.S. President Donald Trump led to large-scale trade and economic conflicts. This phenomenon indicates the limits of further globalization. Unlike previous cases, when protectionism was used to support the development of new industries, today it has acquired a pronounced political character. The main goal of this policy has become the geopolitical and geoeconomic containment of China, with which the U.S. competes for global leadership. Given that the fundamental causes of modern trade conflicts remain active, it can be concluded that tensions in the international trade and economic sphere will persist in the near future, at least until significant structural and technological transformations in the global economy are completed. 7 Исаченко, Т. М. Система разрешения споров ВТО : преодоление кризиса и необходимость реформ / Т. М. Исаченко, О. В. Савельев // Международные процессы. – 2019. – Т. 17, № 4. – С. 22-35. International Law, Business and Political Science Journal ISSN-L 3235-9799 E-ISSN 3235-9799 IF(Impact Factor) 13.24 https://journallaw.totalh.net/ Volume: 11. Issue 12 November 2025 6 Impact of WTO norms on the conclusion of foreign trade contracts. The fundamental principles of the WTO, such as the Most-Favored-Nation treatment, national treatment, and the principle of transparency, require Uzbekistan to create a legal environment that facilitates the conclusion of foreign trade agreements on equal terms with all member countries. This means that the legal regulation of such contracts must be non-discriminatory, predictable, and in accordance with international trade standards. For a long time, the WTO was considered the dominant multilateral mechanism for regulating international trade. However, due to the slowdown in the development of new trade rules, since the 2000s countries have increasingly resorted to concluding preferential trade agreements (PTAs). This study is devoted to the timely and increasingly important topic of digital trade. Within its framework, we analyze the relationship between countries’ participation in the WTO and their approaches to developing digital trade rules within the framework of PTAs 8 . A study based on newly collected data from nearly 350 free trade agreements concluded since 2000 revealed a correlation between countries’ participation in WTO initiatives on digital trade and the content of their bilateral trade agreements. Specifically, it was found that countries actively involved in the WTO’s E-commerce Work Programme discussions are more likely to include progressive and ambitious digital trade provisions in their free trade agreements. Moreover, the study shows that WTO members of the Plurilateral Agreement on Information Technology (ITA) generally tend to undertake broader commitments in the field of digital trade. This work also contributes to a deeper understanding of the relationship between multilateral trade regimes and their regional and bilateral counterparts, analyzing the dynamics of increasing complexity in these regimes. There is an extensive body of literature dedicated to analyzing the interaction between the WTO and PTAs as platforms for negotiations and trade dispute resolution. Nevertheless, systematic research on the influence of WTO law on the structure of PTAs remains insufficiently explored, especially in the context of stagnation in multilateral WTO negotiations. Specific thematic studies (Arnold and Rittberger, 2006) have identified the influence of WTO law and practice on regional trade agreements. The first comprehensive study by Allee (2017), focused on assessing the “presence” of 8 Manfred Elsig and S. Klotz. "Digital Trade Rules in Preferential Trade Agreements: Is There a WTO Impact?." Global Policy, 12 (2020): 25-36. International Law, Business and Political Science Journal ISSN-L 3235-9799 E-ISSN 3235-9799 IF(Impact Factor) 13.24 https://journallaw.totalh.net/ Volume: 11. Issue 12 November 2025 7 the WTO in free trade agreements, analyzed textual duplications and references to WTO articles. The authors found both a significant amount of copied WTO provisions and extensive use of references to WTO articles in free trade agreements. Overall, the authors emphasize the significant presence of WTO commitments and how the legal norms of PTAs reinforce and support WTO legal norms. This work suggests that the competition between WTO obligations and PTA provisions is less conflictual than is often asserted 9 . The authors also found that, in particular, established areas of trade regulation (for example, trade remedies) are more likely to be imported from WTO law than new areas (such as procurement or investment), and that major trading powers (those that also have the ability to deviate from WTO obligations) import WTO law commitments at a much higher than average rate. Another recent study, focused on the development of parent agreements, examines how participation and experience in WTO dispute settlement influence negotiations over parent agreements and their outcomes. Professors Wüthrich and Elsig argue that PTA partners learn lessons from participation in WTO dispute settlement procedures 10 . It should be noted that the conclusion of foreign trade contracts must take into account international customs and standard terms applied in global practice, such as Incoterms, the United Nations Convention on Contracts for the International Sale of Goods (Vienna Convention, 1980), UNCITRAL provisions, and other international instruments. When concluding foreign trade contracts in the context of Uzbekistan’s accession to the WTO, the following key points must be considered: The contract must clearly regulate all aspects of the transaction, including price, quantity, delivery terms, responsibilities of the parties, dispute resolution, and so on. It is important that the terms comply with international standards, taking into account the obligations undertaken by Uzbekistan under the WTO. Currently, this is regulated by the Laws of the Republic of Uzbekistan (2000) “On Foreign Economic Activity” and the Resolution of the Cabinet of Ministers dated 14.05.2020 No. 283 “On Measures for the Further Improvement of Monitoring Foreign Trade Operations in the Republic of Uzbekistan”; 9 R. Baldwin. "The World Trade Organization and the Future of Multilateralism." Journal of Economic Perspectives, 30 (2016): 95-116. 10 R. Koopman, John Hancock, R. Piermartini and E. Bekkers. "The Value of the WTO." Journal of Policy Modeling, 42 (2020): 829-849. International Law, Business and Political Science Journal ISSN-L 3235-9799 E-ISSN 3235-9799 IF(Impact Factor) 13.24 https://journallaw.totalh.net/ Volume: 11. Issue 12 November 2025 8 It is important to specify in advance the jurisdiction in which potential disputes will be resolved and which international arbitration mechanisms will be used; Despite the reduction of trade barriers, rules regarding tariffs and quotas on certain goods should be carefully monitored to avoid unnecessary costs. The execution of foreign trade contracts under the new conditions of WTO accession also becomes more structured and organized. This includes: Customs procedures. After joining the WTO, customs procedures and standards become more transparent and harmonized with international practice, and WTO rules will be implemented in the legislation of the Republic of Uzbekistan; Quality control of goods. The WTO actively regulates product quality standards, which improves trust between countries and reduces the number of disputes over product quality. National standards will change significantly; Logistics and transportation. Thanks to the harmonization of international standards and the simplification of transactions with other countries, the process of delivering goods and executing contracts becomes more transparent and efficient. Studying scientific approaches to the conclusion of standard contracts, it should be noted that, despite significant efforts toward standardization and unification of contractual practices to promote international trade and economic integration, considerable heterogeneity and problems remain due to differences in legal systems, historical roots, and market standardization. Standard contract forms and general business terms can contribute to the unification or harmonization of international trade law. For this, it is first necessary to clarify the meaning of the term “standard contract.” Two aspects of a standard contract are obvious and require no additional comments. A standard contract is usually executed in writing with pre-agreed terms that one party presents to the other. However, providing a universal definition of this term is difficult because, in commercial practice, it is used in two different senses. First, a “standard contract” can refer to model contract forms containing pre-developed terms suitable for a wide range of transactions. Second, the term can refer to adhesion contracts, where one party (usually in a stronger position) dictates the contract terms, which the other party must accept without the possibility of modification. It is important to note that these two meanings of “standard contract” are not identical and have significant differences. International Law, Business and Political Science Journal ISSN-L 3235-9799 E-ISSN 3235-9799 IF(Impact Factor) 13.24 https://journallaw.totalh.net/ Volume: 11. Issue 12 November 2025 9 A standard form contract is a template document that serves as the basis for drafting specific agreements. Lawyers and business practitioners use it as a starting point, making necessary modifications and adaptations according to the specifics of each situation. An adhesion contract, in essence, is a ready-to-sign document offered by one party to another. Its terms are considered final and are not subject to negotiation or modification, except for minor details. The party to whom the adhesion contract is offered has only the right to accept it as presented or to reject it 11 . In his scholarly work, Professor Yishi Du notes that trade globalization fosters the development of commercial law by promoting the unification of international commercial contract rules at the global level. He also emphasizes that the growing role of China in the world economy is an integral part of progress in international business and poses a challenge to the entire global community. From a practical standpoint, this phenomenon effectively stimulates and safeguards the development of the global economy. To advance the standardization of regulations addressing global issues and fully leverage its potential, it is essential to have a comprehensive understanding of the concepts and attributes associated with it, as well as to analyze the challenges that arise during its implementation 12 . Moreover, by consolidating the actual conditions in specific countries, we can gain a better understanding of the current state of the unification of international commercial contract rules in practice, which, in turn, more effectively facilitates their implementation and improvement 13 . The central idea of contract theory is that, unlike traditional economic theory, which assumes rational self-interest, the goals of the principal and the agent do not always conflict. In an ideal situation, where the interests of both parties align, the principal could grant the agent full autonomy. However, in practice, a divergence of objectives is observed: the principal seeks to minimize costs, while the agent is motivated to reduce their own effort 14 . American professor Stewart Macaulay noted that most large companies, and a 11 C. Schmitthoff. "The Unification or Harmonisation of Law by Means of Standard Contracts and General Conditions." International and Comparative Law Quarterly, 17 (1968): 551 - 570. 12 Yishi Du. "On the International Unification of Rules on International Commercial Contracts." Advances in Economics, Management and Political Sciences (2024). 13 K.А.Усачева. «О современных тенденциях гармонизации и унификации договорного права». Вестник гражданского законодательства (2021) 14 Fatima A. Dirani and T. Ponomarenko. "Contractual Systems in the Oil and Gas Sector: Current Status and Development." Energies (2021).