Unequal Treaties Revisited: Coercive Trade Agreements in a Fragmented Global Economy

[Beichen Ding is a PhD Candidate in Law at the World Trade Institute, University of Bern]

This post was originally written as a reflection for the PhD Workshop “Current Dynamics and Challenges of Contemporary Trade Policy and Regulatory Frameworks” by World Trade Institute, University of Bern. The analysis is inspired by the workshop lectures, in particular the ideas shared by Professor Werner Zdouc, as indicated in the text. Any errors or omissions remain the sole responsibility of the author.

Unequal Treaties as a Historical Weapon of Trade

During the ASEAN summit in October 2025, US President Donald Trump announced new trade deals with Malaysia and Cambodia, with framework agreements with Vietnam and Thailand expected to be finalized in the coming weeks. These arrangements, described as “Agreements on Reciprocal Tariffs” are premised on a clear strategic logic: countries that agree to apply US-aligned tariffs on Chinese exports, thereby effectively joining the United States’ economic confrontation with China, would see their own exports spared from US trade restrictions.

However, these agreements display a strikingly unequal character. Most provisions are framed in terms such as “Cambodia shall” or “Malaysia shall”, revealing a pronounced asymmetry in the allocation of obligations. There is an inequivalent distribution of commitments between the United States and its counterparties, particularly Cambodia. A closer examination of the treaty texts reveals several potentially problematic provisions.

For example, Article 2.12 of the Malaysia agreement and Article 2.11 of the Cambodia agreement both address “Border Measures and Taxes”. While the Malaysian provision states that “no Party shall contest at the WTO a measure adopted by the other Party”, the Cambodian provision goes significantly further. It explicitly stipulates that “Cambodia shall not contest, including through countervailing measures or at the WTO, any measure adopted by the United States to rebate or to refrain from imposing direct taxes in relation to exports from the United States”. Notably, this obligation is unilateral: the provision almost does not impose any corresponding restraint on the United States. Both agreements also contain a Section 5 on “Economic and National Security”, which reflects an additional asymmetry. Provisions in this section tend to promote security alignment and implicitly target third countries. For instance, Cambodia is required, “consistent with its sovereign interests”, to adopt and implement measures addressing “unfair practices” of companies owned or controlled by third countries operating within its jurisdiction (Article 5.1(2)).

Taken together, these provisions reveal the systematic asymmetry of obligations and constraints between the parties. Historically, unequal treaties were imposed on weaker states in East Asia during the nineteenth century. Following conflicts such as the Opium Wars (1839–1842; 1856–1860), Britain forced China into agreements such as the Treaty of Nanking (1842), which mandated the cession of territory, namely, Hong Kong, the opening of treaty ports, and extraterritorial privileges for foreign nationals. Similar arrangements were imposed on pre-Meiji Japan (1854 Treaty of Kanagawa) and Korea (signed with Japan after the Meiji Restoration, 1876 Treaty of Ganghwa), often under conditions of gunboat diplomacy.

These historical unequal treaties had distinct commercial dimensions. First, states such as China and Korea lost their autonomy over tariff-setting, with tariff levels fixed at low rates favourable to Western imports. Second, the inclusion of Most-Favoured-Nation (MFN) clauses locked weaker states into perpetual concessions, ensuring that any benefit granted to one Western power would automatically extend to all others. 

Coercive Economic Lawfare

The United States’ recent trade initiatives can be understood as targeting so-called “connector states” located between US- and China-centred value chains. (This point is directly inspired by Prof. Werner Zdouc’s lecture.) Within ASEAN, Cambodia and Malaysia exemplify this category. Connector economies are states that do not strongly align themselves with either the United States or China yet occupy strategically significant positions in global trade and investment networks. Through free trade agreements or regional integration arrangements, such states often provide indirect or “backdoor” access to major markets. Their intermediary position gives them disproportionate strategic value and helps explain their prominence in recent US trade initiatives.

Cambodia illustrates this dynamic particularly clearly. While both China and Cambodia align themselves with the Non-Aligned Movement (some developing countries choose not to align with any major power bloc, especially during the Cold War, seeking independent foreign policy and collective support) and are not formal political allies, the two countries maintain close ties in terms of economic cooperation and development strategy. The Funan Techo Canal in Cambodia, a recent co-investment project between China and Cambodia, will link the Mekong River near Phnom Penh to the Gulf of Thailand, further embedding Cambodia within regional and global value chains.

In today’s global economy, interdependence is structurally asymmetric. States that occupy central positions within economic networks can translate this centrality into coercive leverage, either by monitoring economic flows (the panopticon effect) or by restricting access at critical nodes (the chokepoint effect). A state such as Cambodia becomes a plausible target of economic pressure not simply because of its size or vulnerability, but because of its position within critical supply chains and trade linkages. 

Seen from this perspective, the new trade agreements align closely with the United States National Security Strategy, which explicitly seeks to counter and disrupt China’s global economic influence. Rather than relying primarily on exclusionary measures, this strategy increasingly aims to displace China’s economic soft power by expanding US-centred trade relations with third countries, including in Southeast Asia.

The resulting asymmetry, therefore, is not limited to the allocation of substantive obligations. It also concerns who retains the ability to contest measures and invoke legal remedies (e.g., bringing a case before the WTO), and who is effectively precluded from doing so.

Validity of Treaties 

Unequal treaties have long been criticised as violating state sovereignty and hollowing out pacta sunt servanda, precisely because they are concluded under conditions of pronounced power asymmetry. Modern treaty law, most notably the Vienna Convention on the Law of Treaties (VCLT), reflects lessons drawn from this historical experience by codifying grounds of invalidity in cases of coercion, particularly in Article 52.

From a law of treaties perspective, the validity of the agreements discussed above raises at least two distinct forms of potential unlawfulness. First, specific treaty provisions may be invalid to the extent that they conflict with prior treaty obligations, most notably under WTO law. Second, the validity of the agreement as a whole may be questioned if it was concluded under conditions amounting to coercion, even if such coercion falls short of traditional armed force.

Two provisions of the VCLT are of relevance: Article 52, which addresses the coercion of a state by the threat or use of force, and Article 53, which concerns treaties conflicting with a peremptory norm of general international law (jus cogens). The scope of Article 52 VCLT is, however, notoriously narrow. Its reference to the “threat or use of force” is generally understood as referring exclusively to mean armed force, a formulation drawn directly from Article 2(4) of the UN Charter. As a result, economic and political pressure are widely regarded as falling outside its formal scope (p. 644).

This narrow wording was not accidental, but the outcome of deep political divergence during the drafting of the VCLT (Yearbook of International Law Commission, 1966 I/I 31). While many developing states argued that “force” should encompass economic and political coercion, Western states maintained that it referred solely to armed force. A group of nineteen states proposed an amendment explicitly including economic and political pressure, but this proposal was ultimately withdrawn (para.449). As a compromise, the Conference adopted the Declaration on the Prohibition of the Threat or Use of Economic or Political Coercion in Concluding a Treaty, leaving the Convention text itself what we see today.

This drafting history reveals that the concept of coercion has never rested on a firm or universally accepted understanding. In today’s global economy, coercion increasingly operates through market-access leverage, tariff threats, and supply-chain chokepoints rather than through military force. The result is a growing normative gap between the VCLT’s formal conception of coercion and contemporary practices of economic pressure. Notably, the VCLT remains largely silent on who may invoke invalidity in such circumstances, leaving questions of standing and collective interests under-theorized.

Article 53 VCLT, addressing treaties conflicting with jus cogens, is less promising in this context. While it provides for automatic nullity where a treaty conflicts with a peremptory norm of general international law, the current catalogue of jus cogens norms identified by the International Law Commission makes it difficult to identify any norm clearly implicated by unequal trade agreements as such. As a result, jus cogens is unlikely to offer a viable doctrinal pathway for challenging these agreements.

Future Pathways

The practical question that follows is where, if at all, these unequal trade agreements can be challenged by the affected trade partners or by later Cambodian/Malaysian administrations, at the international level.  Several avenues present themselves, each with distinct legal and political constraints: an ICJ advisory opinion, WTO dispute settlement, and regional responses within ASEAN.

An ICJ advisory opinion could offer normative clarification on the legality of treaty-based economic coercion. Advisory opinions, however, are not legally binding, and only authorized UN organs and specialized agencies may request them (ICJ Statute, Art. 65; UN Charter, Art. 96). Under Article 96(1) of the UN Charter, the UN General Assembly (UNGA) and the Security Council may request advisory opinions on any legal question, while other UN bodies and specialized agencies may do so only within the scope of their activities (Art.96(2)). In practice, the UNGA route is politically demanding, as it requires mobilizing a broad coalition of states willing to frame economic coercion as a matter of general international concern. Moreover, while an advisory opinion could be symbolically powerful, its practical impact would likely remain limited.

The WTO dispute settlement system presents a more legally grounded, though politically sensitive pathway. WTO membership is not merely a bundle of bilateral trade concessions; it establishes a system of collective enforcement designed to safeguard the integrity of multilateral trade rules. From this perspective, provisions in bilateral trade agreements (US-Cambodia trade deal, Art. 2.11(2); US-Malaysia trade deal, Art. 2.12(2)) that pre-emptively waive or restrict recourse to WTO dispute settlement raise systemic concerns. At the same time, however, WTO litigation is politically fraught. Initiating a dispute would expose smaller states to retaliation and diplomatic pressure, and the Appellate Body’s current dysfunction further complicates the calculus. Nevertheless, the WTO remains the forum best equipped to address the legality of trade-related measures and the permissibility of waiving multilateral remedies. A central question is whether a WTO Member may validly waive, through a bilateral agreement, its right to initiate WTO dispute settlement proceedings. Such waivers sit uneasily with the WTO’s institutional logic. Dispute settlement under the Dispute Settlement Understanding serves not only the interests of the complaining Member, but also the broader membership by clarifying obligations, ensuring compliance, and preventing unilateral retaliation. Allowing Members to contract out of WTO dispute settlement risks undermining these collective functions.

Beyond multilateral institutions, regional pathways may also play a role. Bilateral agreements of the kind discussed here pose clear risks for ASEAN. As individual members negotiate separately under asymmetric conditions, it erodes regional cohesion and weakens ASEAN’s collective bargaining power. This is particularly problematic given ASEAN’s long-standing self-positioning as a stabilizing anchor. ASEAN solidarity offers a potential, yet limited, counterweight to coercive bilateralism. ASEAN’s institutional framework allows member states to coordinate positions, issue collective statements, and raise concerns through regional forums and dialogues with external partners. ASEAN has also developed a regional dispute settlement framework for economic and trade issues. The Protocol on Enhanced Dispute Settlement Mechanism (EDSM) governs disputes arising under ASEAN economic agreements. In practice, however, ASEAN’s dispute settlement mechanisms are underutilized and limited to intra-ASEAN disputes. Ultimately, while ASEAN lacks the legal tools to directly invalidate or formally challenge US trade agreements, its value lies in exerting collective political and diplomatic pressure, reframing coercive bilateralism as a regional concern rather than an isolated contractual choice. 

To conclude, the resurgence of unequal agreements signals a troubling return to power-based economic ordering, now formalized through treaty law rather than imposed by force. If left unchallenged, they risk entrenching economic coercion as a legitimate tool of treaty-making. The challenge ahead is whether international and regional institutions can still impose legal discipline on power in an increasingly fragmented global economy.