International Economic Law and Policy Blog

Call For Papers: King's College of London University

From Jalal Alavi:

King's College of London University is organizing its first International Graduate Legal Research Conference. Information on the Conference, including its "Call for Papers" is available through http://www.iglrc.com/

Some People Claim That Canada's to Blame ...

Jimmy Buffett doesn't have to worry about the interpretation of GATT Article XX(g) or the chapeau.  He can just take matters into his own hands:

Margaritaville Cafés, restaurants owned by Jimmy Buffett, will no longer serve Canadian seafood until Canada ends its annual slaughter of seals, according to a statement issued by the world-famous musician, who signed on to The Humane Society of the United States’ Protect Seals seafood boycott in September. The HSUS launched the seafood boycott in March 2005 and asks consumers and restaurateurs to avoid Canadian seafood as a way of ending the annual seal hunt.

“Margaritaville Cafes will not be purchasing or serving Canadian seafood products until the Canadian government ends the commercial seal hunt permanently,” says Jimmy Buffett in his statement. “I do not look at this as one nation telling another how to best manage its affairs. I view it as an effort to make humans more humane in the way they manage the planet. We do not own the earth. We are landlords and we simply need to do a better job, for all creatures on this earth.”

UPDATE:  It's not just the older generation of musicians -- Pink has gotten into the act as well:

Pink is not one to let the wool to be pulled over her eyes—or over her body, for that matter.

The pop star has teamed up with People for the Ethical Treatment of Animals to urge a boycott of the Australian wool industry in an effort to halt the controversial practice of "mulesing," in which farmers cut skin from around the rear ends of sheep to prevent fly infestations.

Pink, whose real name is Alecia Moore, serves as the narrator of a graphic PETA video about the practice, which shows workers using shears to snip skin folds from the backsides of struggling sheep.

The practice is meant to create scar tissue that prevents a painful and often deadly condition called fly strike, but animal advocates argue that there are more humane methods of fighting the condition.

"The wool trade uses methods so sadistic that it makes you consider clearing your closet of any animal products," Pink states in the video.

"I am calling on consumers to check labels on sweaters before buying them, and if they're merino wool or made in Australia, to leave them on the racks."

Pink also called for a ban on live exports, citing the inhumane treatment of sheep that were shipped to foreign ports for slaughter.

More on China's Currency

Inside U.S. Trade, through its China Trade Extra, is doing some blogging from China (I don't know if this is a permanent feature, or just something temporary they are doing in relation to the Strategic Economic Dialogue), and they recount the following story:

Reporters here received an advance copy of Federal Reserve Chairman Ben Bernanke's speech on Dec. 15, which we were not to release until after he delivered his remarks at 2 pm Beijing time.

His speech had an interesting section in which he said China's currency peg is an "effective subsidy." His remarks are explained in our story from today.

This seemed pretty big, since various U.S. industry groups and members of Congress have been calling on the Bush Administration to find that China's currency peg is a subsidy for Chinese exports, and the administration has largely tried to ignore those pleas. If Bernanke says it, it would likely stoke this request once again.

Just before Bernanke's 2 pm speech, I decided I'd ask a Treasury official for a reaction. The official declined to say anything, since Bernanke hadn't delivered his remarks yet and also said he was not familiar with Bernanke's remarks.

But, word was now out about the speech, and when we filed in to hear him at the Chinese Academy of Social Sciences, Bernanke delivered his speech without using the word "subsidy" at all. Without giving away ways and means, it seems pretty clear that Treasury raised the issue with Bernanke's staff, which reminded the Fed chairman to avoid the "s" word.

Of course, Bernanke's written comments, with references to "subsidy" and all, still exist on our website, and you can see on page 12 what he would have said but for the intervention.

So it would seem we've learned three things.

First, while the Fed is an independent agency, it is capable of taking advice. The instant wisdom here was that Bernanke would probably want to avoid any political controversy, and when he heard that the word "subsidy" would likely be controversial, he killed it.

Second, Treasury is truly interested in not giving anyone who believes China needs to be cited or retaliated against any ammunition.

Third, Bernanke may indeed believe China currency peg is an “effective subsidy”.

Mandelson Rejects a Carbon Import Tax

We've had a few discussions on this blog about the possibility of the EU imposing trade restrictions on countries that are not doing enough to clean up the environment (see here, here and here).  According to the FT, EU Trade Commissioner Peter Mandelson has rejected the idea:

The European Union’s trade commissioner will on Monday dismiss French proposals for a “green” tax on goods from countries that have not ratified the Kyoto treaty as not only a probable breach of trade rules but also “not good politics”.

Peter Mandelson says that the levy, aiming to cancel the competitive advantage of countries that are not cutting carbon emissions to fight global warming, would be “highly problematic under World Trade Organisation rules and almost impossible to implement in practice”.

...

“Not participating in the Kyoto process is not illegal. Nor is it a subsidy under WTO rules,” Mr Mandelson will warn in a podcast speech to 50,000 subscribers. “How would we choose what goods to target? China has ratified Kyoto but has no Kyoto targets because of its developing country status. The US has not ratified but states like California have ambitious climate change policies.”

Instead, Mandelson will propose the following approach:

In contrast, Mr Mandelson backs a plan, to be unveiled this week, to include in the EU’s carbon emissions trading scheme all airlines landing or taking off in the EU, even though it is likely to antagonise the US and Asian countries.

Mr Mandelson, who favours a positive rather than punitive approach, is also writing to Pascal Lamy, WTO director-general, to suggest talks on scrapping tariffs on renewable energy and clean power generation equipment worldwide.

He also wants extra incentives for companies using environmentally sustainable methods to be built into a new generation of bilateral deals the EU is negotiating. Mr Mandelson says the rich world has “an historical environmental debt”, having contributed to 80 per cent of carbon emissions worldwide to date, and must lead the way.

The Stiglitz suggestion would have made for an interesting case, but it is probably best for the system that we will not see it.

UPDATE:  The Economist comments on this issue on their Free Exchange blog:

PETER MANDELSON, the EU trade commissioner, is putting the kibosh on a French idea to slap tariffs on American goods products from countries that don't comply with Kyoto.

It doesn't strike me as an obviously daft idea.  After all, countries that don't comply with Kyoto are arguably gaining competitive advantage through their failure to be a good world citizen.  And a tariff is the first credible mechanism I've heard of to overcome the commons problem that plagues attempts to fight global warming.

But what is good in theory is often appalling in practice.  As Mr Mandelson points out:

“Not participating in the Kyoto process is not illegal. Nor is it a subsidy under WTO rules,” Mr Mandelson will warn in a podcast speech to 50,000 subscribers. “How would we choose what goods to target? China has ratified Kyoto but has no Kyoto targets because of its developing country status. The US has not ratified but states like California have ambitious climate change policies.”

When standards are not clear, environmental restrictions often become tools for protectionists to wall off local markets from competition.  The purpose of the WTO is to prevent fungible standards from impeding world trade—and a very fine purpose it is, too.  These sorts of manoeuvres are sure to cause a huge row, and thereby arguably do more damage to the world's poor than climate change will.

Is the Undervalued Yuan a De Facto Export Subsidy in the Legal Sense?

According to Bloomberg, considering that the situation has likely worsened recently ''because the yuan has dropped 10 percent on a trade-weighted basis after inflation in the past five years",  Federal Reserve Chairman Ben S. Bernanke urged recently China to allow  the quasi- fixed exchange rate of its currency to gain at a faster pace to end "an effective subsidy'' for exporters. Bernanke said that " the effective subsidy that an undervalued currency provides for Chinese firms that focus on exporting'' is an  "important distortion'' in China's economy.

However, when he delivered his speech, the Fed chairman changed the word  "subsidy'' to  "distortion''. This changing of words is a clear indication that many people have a hard time distinguishing between the economic and the legal definitions of a subsidy, a fact which leads to an excessive use of the term “subsidy” to make it fit any case.

Under the SCM, a practice is a potentially challengeable subsidy if it simultaneously satisfies three distinct criteria: it must entail a governmental "financial contribution”, it must be "specific", and it must confer a "benefit" on its recipient. If it is contingent in law or de facto  upon export performance, it is then prohibited and deemed specific automatically. Is the yuan undervaluation an  "effective subsidy for exporters" (read "de facto export subsidy") in this legal sense? In other words, does the undervalued yuan entails a governental financial contribution providing a benefit  to certain chinese firms contingent de facto upon their export performance? In such a case the answer would be affirmative without the need to prove specificity which is deemed to exist in such a scenario. However, although the meaning of "contingent de facto upon export performance" seems obvious  in the context of  the yuan undervaluation,  what is the meaning to be given to financial contribution and benefit in such a context?

The German Marshall Fund on Trade

Jalal Alavi, a frequent commenter on this blog, suggested posting the following:

A Survey on Public Opinion

The newly released survey of German Marshall Fund of the United States “Perspectives on Trade and Poverty Reduction”   was presented in the WTO today(13.12.2006). GMF has surveyed seven countries (France, Germany, Italy, Poland, Slovakia, UK and US) who represent a third of exports and imports, 40% of FDI inflows and outflows, and 60% of overseas development assistance worldwide. People across these countries have been interviewed through telephone or face-to-face. The finding may be interesting, especially in comparison to the similar surveyed done in 2005. Some of the key finings of the survey are as follows:

“Economic optimism rising: Despite majorities in nearly every country remaining dissatisfied with the economy, 41% of Americans and 27% of Europeans are satisfied with their economy compared to 30% and 20%, respectively, last year.

Free trade benefits recognized: Seventy-eight percent of Americans and 82% of Europeans believe that freer trade enables access to new markets for national products, while 78% of Americans and 76% of Europeans believe that freer trade leads to lower prices and more product choices for consumers. Seventy-one percent of Americans and 72% of Europeans believe freer trade makes the world more stable by putting people from different countries in contact with each other.

Globalization fears weaken, but anxiety over jobs: Every country had more favorable views on globalization than in 2005: Poland (34% to 49%), Italy (51% to 61%), Germany (46% to 53%), the U.K. (47% to 53%), the U.S. (46% to 52%), and France (43% to 47%). But nearly 60% of American and half of European respondents believe that freer trade costs more jobs than it creates.

Americans and French apprehensive over open markets: American and French respondents wish to keep trade barriers to protect businesses, even if this means slower growth. They showed the highest levels of opposition to trade liberalization - 55% of French and 31% of American respondents do not favor freer trade. American (59%) and French respondents (58%) say freer trade costs jobs. But French respondents also showed the lowest confidence in freer trade providing consumer benefits (63%), helping poor countries (39%), increasing global prosperity (49%), and supporting democracy (45%). More Americans believe it has consumer benefits (78%), helps poor countries (70%), increases global prosperity (68%), and supports democracy (65%).

China viewed as threatening: Fifty-nine percent of both Americans and Europeans believe that China's growing economy is a threat because of competition from low-cost Chinese products and U.S. and European firms relocating to China. Seventy percent of French, 67% of Polish, 66% of Italian, and 65% of Slovak respondents expressed fears over China's emerging economy.

Skills gap worries: About 94% of Americans and Europeans believe that investing in education, job training and technology will help them compete in the global economy - fewer than those who believe that pro-business tax and regulation reforms (74%), trade and FDI promotion (64% and 70%), or making it easier to hire and fire workers (49%) will help improve competitiveness. Americans and Europeans ranked these policy opinions similarly in descending order of priority.   

Aid for trade a win-win: Three out of four Americans and Europeans are keen on promoting international trade with poor countries, a level of approval that is in line with transatlantic support for development assistance. Just as many Americans and Europeans believe "aid for trade" - that is aid that helps poor countries trade - will benefit their own economies.

Immigration pros and cons: In every country surveyed unskilled-worker wages are seen as more threatened by immigration than skilled-worker wages, but the extent to which countries believe that there is such an \impact on worker wages overall varies. Sixty-two percent of Americans and 54% of Europeans believe that immigrant workers create new businesses that add value to the economy and just over half of Americans and Europeans believe that immigrant workers contribute to the success of industries like science, medicine, and technology.

The Whole Report is here: http://www.gmfus.org/doc/GMF_TradeSurvey%202006.pdf

Tariff Preferences II?

Bloomberg reports:

Pakistan plans to challenge European Union trade policy for poor nations through the World Trade Organization, concerned that among India, Sri Lanka and Bangladesh, it's the only one not given equal advantages.

In April 2004, WTO judges said the EU could exempt Latin American nations and Pakistan from import tariffs as long as it made the qualifying criteria open to all developing countries. That ruling followed a complaint by India that Pakistan's textile exports unfairly benefited from the EU measure, putting Indian rivals who paid higher duties at a disadvantage.

The EU revised the criteria for its preference programs a year ago to include duty-free imports for goods from South Asian nations such as Sri Lanka. The new criteria for the preferential measures exclude any nation that accounts for more than 1 percent of EU imports, catching Pakistan with 1.1 percent. Pakistan's complaint also comes just weeks after the EU said it wants to begin negotiations on a free-trade accord with India.

``The EU set very arbitrary criteria,'' Manzoor Ahmad, Pakistan's ambassador to the WTO in Geneva, said in a telephone interview yesterday. ``They chose a 1 percent threshold just to exclude us. It's neither unconditional nor treating similar countries in a similar way,'' as stipulated by the WTO's ruling, he said. ``The only countries left out were India and Pakistan and now they're working on a free-trade accord with India.''

A request by Pakistan for consultations with the EU would start a two-month period of talks under WTO rules. Unless the two sides resolve their differences, Pakistan may press ahead with litigation, asking the WTO to rule on the EU measures.

European Commission spokesman Peter Power declined to comment.

See also this article: http://www.allheadlinenews.com/articles/7005842233

If I'm reading this correctly, Pakistan is definitely planning to request DSU consultations with the EU on the matter.  I can't tell from the article if this means an Article 21.5 complaint related to the previous Tariff Preferences disputes or if it means an entirely new complaint.  Either way, it's certainly going to be an interesting case, and may help clarify some of what was said in the earlier Tariff Preferences case.

ADDED:  I just realized that my statement that this could be an Article 21.5 complaint makes no sense.  The original Tariff Preferences complaint was brought by India, of course, so Pakistan's challenge would have to be a new complaint.  Sorry.

China's Checkers

See the USTR report that is the basis for Susan Schwab's recent criticisms of China's trade policy. 

Food for Thought

The Economist has an excellent article this week about food politics.  What I liked about it was that it brings the technical legal issues from the GMOs and other similar cases into a real world context.  Much of the debate in trade law circles involves government regulation, as well as international regulation of government regulation.  But people can also express their views with their pocketbooks, and many of them are doing so.

The article describes the movement towards buying foods that support a particular political agenda, in particular the following three:  organic, Fairtrade and local.  People buy organic because they perceive it to be healthier and/or better for the environment; they buy Fairtrade because they believe it will provide low-skilled agricultural workers a better wage; and they buy local because of opposition to Big Business generally, a desire to promote reduced transportation in the food industry ("food miles") and thus a cleaner environment, with a bit of anti-globalization sentiment thrown in.

The Economist examines the assumptions behind all of three of these food "agendas," and cites research that questions some of them.  They conclude:

What should a shopper do? All food choices involve trade-offs. Even if organic farming does consume a little less energy and produce a little less pollution, that must be offset against lower yields and greater land use. Fairtrade food may help some poor farmers, but may also harm others; and even if local food reduces transport emissions, it also reduces potential for conomic development. Buying all three types of food can be seen as an anti-corporate protest, yet big companies already sell organic and Fairtrade food, and local sourcing coupled with supermarkets' efficient logistics may yet prove to be the greenest way to move food around.

Food is central to the debates on the environment, development, trade and globalisation—but the potential for food choices to change the world should not be overestimated. The idea of saving the world by shopping is appealing; but tackling climate change, boosting development and reforming the global trade system will require difficult political choices. “We have to vote with our votes as well as our food dollars,” says Mr Pollan. Conventional political activity may not be as enjoyable as shopping, but it is far more likely to make a difference.

Personally, the only one of these agendas that I follow is buying organic -- sometimes -- and that's really for health reasons only.  I don't know for sure that there's any health benefit from organic foods, but, at least on a personal level, I favor the precautionary principle.  As to the other agendas, I am somewhat convinced by the points the article makes.  Others, of course, feel differently.  But it's interesting to see how politics plays a role in the market in this way, outside the context of what governments and international organizations are doing.

Definition of "Conflict"--Domestic Analogy

In a case about to be heard by the U.S. Supreme Court, Credit Suisse v. Billing, an issue of conflict between regulatory regimes will be addressed.  The two regimes are the U.S. antitrust laws and the U.S. securities laws.  The type of conflict is that the U.S. securities laws permit activity that the antitrust laws prohibit.  See the Department of Justice's brief.  It is interesting that in U.S. domestic law, we do not have a general or generic method of defining and resolving these types of "inter-functional" conflict.  Of course, similar issues arise in connection with definitions and resolutions of conflict between trade law and environmental law, etc.

Interreality Economic Law

See the cool post by Roger Alford at Opinio Juris.  It'll make your head spin.

Yet More EC-Biotech Comments!

Yesterday I happened to hear a lecture about the "Protection of family property against creditors in the enlightenment era court of chancery". Nothing to do with GMOs, but listening to a learned analysis of late 18th century jurisprudence made me wonder - what would future generations, say, in 250 years, make of a decision like EC-Biotech? I say "would", not "will" - the ongoing disregard of the precautionary principle may have an impact on the chance that legal historians in the 23rd century will have an opportunity to study the jurisprudence of today...

Anyway, in addition to those previously posted, here are two more working-paper attempts to understand different aspects of the GMO report, contemporary legal history, if you will:

Oren Perez, Bar Ilan University, "Anomalies at the Precautionary Kingdom: Reflections on the GMO Panel's Decision", available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=940907:

Abstract: the case before the WTO panel is a reflection of a wide-ranging social discontent. At the heart of this discontent lies the question of the risks genetically modified organisms ("GMOs") pose to human health and the environment. A prominent feature of this discontent was the unrelenting anti-GMO campaign, which was led by several transnational environmental groups, such as Greenpeace and Friends of the Earth. The idea of precautionary action has played a key role in this campaign. It was invoked as a ground for imposing stricter regulatory controls on the release of GMOs to the environment and their placement on the market. The precautionary principle, entangled with the concept of risk, stands then at the core of this conflict, at both the social and legal levels. However, the notion of precaution is a contested and highly vague concept. Environmental groups have not succeeded in developing a coherent understanding of this notion, and neither, as I will argue below, has the Panel. This comment has two main goals. First, it offers a critique of the Panel's interpretation of the precautionary principle and its WTO version - Article 5.7 of the Agreement on the Application of Sanitary and Phytosanitary Measures, arguing that the Panel's view is incoherent. Second, it develops an alternative approach for interpreting the precautionary principle and incorporating it into the law of the WTO.

Tomer Broude, Hebrew University of Jerusalem, "Genetically Modified Rules: The Awkward Rule-Exception-Right Distinction in EC-Biotech", available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=949623:

Abstract: The arcane distinction between rules, exceptions and autonomous rights has troubled WTO dispute settlement since its earliest days, primarily with respect to procedural burden-of-proof questions. Yet in its report, the EC-Biotech panel relied on a techno-textual understanding of this distinction to interpret the substantive applicability of Articles 2.2, 5.1 and 5.7 SPS – the WTO's fundamental rules on the degree of scientific certainty of risk required to allow a state to restrict imports of goods due to human, animal or plant health or life concerns. This article critiques the panel's approach on the backdrop of WTO jurisprudence and deontic logic, arguing that the norm-category of autonomous rights - as resorted to by the panel - does not actually exist; that the Article 2.2-5.1/5.7 SPS relationship should be more straightforwardly construed than the panel's convolutions would suggest; and that the disorderly and incoherent outcome of the panel's analysis of the questions involved serves as a cautionary tale against excessive textualism in WTO dispute settlement.

 

Is The Oxford English Dictionary one of the "covered agreements." ?

In its recent post on  Posner and the Rule of WTO Law,  Simon Lester underlines that the “mere mention of "policy preferences" seems to set people in the WTO on edge. This stems from a  fact long ago underlined by Hudec that WTO  activity intrudes upon domestic regulatory sovereignty and leaves therefore WTO legal institutions particularly exposed to damaging criticism from national governments that do not yet fully accept the WTO's authority in this area. Recognizing this very exposed position, the Appellate Body may well have concluded that the safest refuge from political criticism was to stay as close as possible to the shelter of the legal texts accepted by governments. This “ textualism” strategy has led to an excessive use of dictionaries in order to discover the “ordinary meaning” of terms. There is even the joke that the Oxford English Dictionary is now one of  the “covered agreements”!

However, in the vein of what Posner says, this “textualism-dictionary” strategy,  cannot be viewed only as a  the search for “pure” textual meaning. Rather, as John Greenwald pointed out, the WTO panels and the AB select "ordinary" meanings "in a highly result-oriented way." For example, "the 'ordinary meaning' of the word 'comparable' varies according to different dictionaries and  is elastic enough to allow for product type and/or model distinctions within a broad 'like product' category of a certain product.

As underlined by Dongsheng Zang in an excellent recent article about textualism in GATT/WTO jurisprudence (33 Syracuse J. Int'l L. & Com. 393),  the trouble with textualism is that it can be easily paralyzed by the fact that there are always more than one ordinary meaning. As a result, the seemingly "strict textual interpretation," in effect, leaves a lot of room for WTO panels and the AB.

Posner and the Rule of (WTO) Law

In an early post on this blog, Joel cited some articles by and about Judge Richard Posner, and noted that while Posner

accepts that there are limits, he refuses to accept a clear line between interpretation and policy-making.  This line is, if not the definition of the "rule of law," a critical component of the rule of law.  Posner rejects the separation between law and politics.

Posner's views on this issue have recently been elaborated and criticized over at Balkinization by Brian Tamanaha.  To get the full picture, it's probably best to read the whole post, but I'll put some excerpts here.  According to Tamanaha, Posner's view is as follows:

Posner believes that judging on the Supreme Court is almost entirely political, and he believes that judging on the Court of Appeals (his court), and judging generally, is substantially political. This view of the political nature of judging is widely shared among legal academics and political scientists, although many judges disagree. Posner, furthermore, advocates that judges should decide cases in a pragmatic fashion, oriented toward rendering the most reasonable decision in a given case (all things considered).

To obtain a sense of Posner’s view of these matters, consider his comments (paraphrased):

When asked by Leiter whether he thinks that judges have a duty or obligation to apply the law, Posner pointedly does not accept the terms of the question. Rather than characterize it as a duty, he said that there are basic “rules of the game” that judges must conform to (violators risk effort-wasting and embarrassing reversals), to wit: judges must follow any statute or precedent that clearly resolves an issue. Judges are constrained by rules in this sense.

However, according to Posner, these constraints are almost never at play at the level of the Supreme Court (cases that make it to that level are seldom clear in legal terms, and the Court can repudiate its own precedent), and “very often not in play” at the Court of Appeals. “A significant fraction” of the cases heard by the Court of Appeals is not clearly determined by statutes or precedent. Moreover, Posner says, the ordinary canons of statutory interpretation and reasoning by analogy do not help produce a legal answer.

Hence, in that situation, a judge must render a decision about the most reasonable result for the present and future. There is nothing particularly legal about this decision. Judges simply make policy judgments based upon their life experiences, temperament, and ideological views. [Notice how much Posner agrees, at least on these points, with the old “Crits”—Critical Legal Studies folks who were highly skeptical of the role of law in judicial decision making.]

Posner fully embraces the implications of his views of judging. He recognizes that judges may have different opinions about what is a reasonable result in a given case—that’s just the way it is. Whichever view happens to have the most votes on a judicial panel wins. Outcomes in given cases are therefore a function of the vagaries of who happens to be assigned to a given panel. Tempering this implication, Posner also points out that appellate judges agree a great deal of the time, but he insists that this agreement is not so much attributable to shared interpretations of the law, but rather to similar outlooks, experiences, and values held by judges, which produce shared judgments about what is reasonable. Since decisions in these cases rest upon political views, Posner accepts that the political views of individual judges should be considered in the appointments process (and he adds that, rhetoric notwithstanding, the Senators already know this).

In response, Tamanaha sets out the following opposing views:

My argument is that Posner’s descriptive claim is wrong: most judges strive to come up with the best—the strongest—legal outcome as dictated by the applicable rules. They do this whether the legal rules are clear or complicated and uncertain. When no strongest legal answer exists, which does happen, they may well try to figure out the most reasonable result in the manner that Posner suggests (what else can they do?). Of course, rule-bound judges still pay attention to results and consequences. When the outcome dictated by the rules is extremely unpalatable, they will struggle with the law to avoid this result. This does not change the fact that their overarching orientation is to try to figure out what the law requires, and to duly comply. This orientation is essential to a rule of law system.

I confess that I am, generally speaking, somewhat sympathetic to Posner's view of how judging actually works.  But I also confess that I'm no expert, and have only read bits and pieces about this issue.  Regardless of which side is right or wrong, though, what intrigues me is how these ideas apply to the WTO dispute settlement system.  My sense is that most people who participate in WTO disputes in some capacity would disagree that Posner's view is correct, and that this is especially true among those who work in the WTO Secretariat or those who serve as panelists or AB Members.  The mere mention of "policy preferences" seems to set people on edge, provoking a response that of course this is not a permissible consideration.  Now, it may be that I have simply not talked to enough people, and there are in reality plenty of WTO Posnerians out there.  On the other hand, I wonder if the Posnerian view is more prevalent among Americans (this may or may not be the case -- I'm not sure), and it is the relatively low percentage of Americans working on WTO disputes in a judging capacity that has resulted in this view not taking hold to a greater extent.

At some point in the distant future, I'd like to look at this issue in more detail.  For now, though, I just thought I'd set out the basic issues and see if anyone had any thoughts.

An Exercise in (Trade Policy) Legitimation?

Hold your breath.The EU is putting trade policy to public task: http://www.iht.com/articles/2006/12/04/business/trade.php . Is this like putting liberalization to public referendum? If the outcome is negative, could it justify trade restrictions? If it is positive, could it justify openness?

One to watch. The report should make for interesting reading.

T.

"Investment and..."

"Interactions between Investment and Non-Investment Obligations in International Investment Law " by my Hebrew University Colleague Prof. Moshe Hirsch is a systematized analysis of investment tribunals' treatment - perhaps the first - of the overlap between investment law and other areas of international obligation. It's available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=947430 . Among other issues, he identifies a gap between the use of international public law principles for treaty interpretation, on one hand, and for regulating normative conflicts,on the other.

Abstract:

"The accelerated proliferation of international investment agreements, the growing number of treaties in other international domains, and the increase of investor-state arbitrations enhance the prospects of overlap between investment and non-investment obligations. The interactions between international-investment and non-investment obligations may be controlled by two main sets of rules: the relatively well-developed principles of public international law or the nascent body of rules emerging from international investment jurisprudence. As analyzed in this paper, investment tribunals have generally not resorted to the relevant principles of public international law. This practical disregard of the regulatory rules of general international law stands in stark contrast to the extensive reliance of investment tribunals on other rules of the Vienna Convention on the Law of Treaties. This current unawareness of investment tribunals may well change in the future with regard to fundamental human rights that are recognized in public international law as jus cogens rules.

Contemporary international investment law does not offer a systematic set of rules to be applied to such questions. International investment tribunals that encountered such questions have tended to address these questions in a sporadic manner. Consequently, the paper examines these investment awards separately and seeks to trace some systematic principles that emerge from this jurisprudence. These principles relates to the relevance of non-investment treaties, the different impact of voluntary and non-voluntary obligations, the parties' motivations, chronological sequence of obligations and available information, and least restrictive measures.".

Cape Town Convention

This paper came across on SSRN, and looks interesting, both in terms of the subject it describes, and the method by which it evaluates the benefits of this convention. 

"Innovation in International Law and Global Finance: Estimating the Financial Impact of the Cape Town Convention"

Author: ANTHONY SAUNDERS

New York University - Leonard N. Stern School of

Business

Email: [email protected]

Auth-Page: http://ssrn.com/author=17647

Co-Author: ANAND SRINIVASAN

National University of Singapore

Email: [email protected]

Auth-Page: http://ssrn.com/author=505298

Contact: INGO WALTER

New York University - Stern School of Business

Email: [email protected]

Auth-Page: http://ssrn.com/author=17591

Full Text: http://ssrn.com/abstract=894027

ABSTRACT: This paper examines the financial impact of a transfer of legal sovereignty covering the rights to collateral to an international regime in the case of the Cape Town Convention and Protocol covering international mobile assets, specifically commercial aircraft and related equipment, which came into force in 2004. We estimate the impact on financing costs facing airlines based in signatory countries in terms of access to financial markets and interest differentials, debt rating migration and stock prices using rating-sensitivity analysis, OLS regressions and event studies. We find that the present value of the resulting financing cost reductions are very significant and are biased in favor of developing countries, the sources of much of the growth in demand for commercial aircraft going forward.

The results suggest the power of changes in the legal framework of financial markets to influence the costs and pricing of global financial flows.

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Biotech Panel Report

Unlike the rest of the world, I have made it a practice not to read leaked WTO panel reports.  I do this out of respect for the integrity of the WTO dispute settlement system.  Therefore, I did not have occasion to consider tackling the new Biotech report until it was released in September.  Because I thought it would be appealed, I did not read it even then.  After I learned that it was adopted on November 21, 2006, I began reading it.  I find the report troubling for many reasons. Tonight I will only mention me a few regarding procedures:  First, the panel took over two and one-half years to produce its report, far above the outside limit of nine months set in DSU art. 12.9.  Second, the panel seems to have carried out an inadequate investigation of the public disclosure of the panel’s confidential interim reports.  Only the parties were questioned, not the WTO Secretariat.  Third, in an 1087-page report that goes over party submissions ad nausea, the panel did not offer one word of description about what the three amicus curiae briefs contribute.  The panel merely stated, seemingly in a robotic way, that it did not find it necessary to take the briefs into account (para. 7.11).  The brief put together by CIEL would have been particularly interesting for the panel to discuss as it seems to have been written by a coalition of NGOs from the North as well as the South.  After I read the report, I wondered what the governments said when adopting the report on November 21.  Unfortunately, that information is not available on the WTO website.  The most recent DSB minutes posted are September 2006.  As I have said before, the WTO has a long way to go to attaining the level of transparency that it requires from its Member governments.

Unappealing Biotech Products

It appears that the EC has decided not to appeal the panel ruling in Biotech.  Why?  And what are the jurisprudential and practical implications of this decision?