International Economic Law and Policy Blog

Yale Conference on the ICSID Annulment Procedure

From the editors of the Yale Journal of International Law: 

 For over 40 years, the World Bank’s International Center for the Settlement of Investment Disputes (ICSID) has offered investors and states a unique arbitration mechanism, which trades off diplomatic protection on behalf of investors in return for commitments by host states to arbitrate investment disputes at the initiative of the investor. ICSID’s role in international investment has grown dramatically along with the proliferation of Bilateral Investment Treaties (BITs).  At the same time, most of the awards of ICSID tribunals have been published and have contributed to the ongoing development of international investment law and general international law.   

            In recent years, however, the ICSID framework has come under criticism from a number of angles, perhaps the most acute being controversy over its distinctive review and annulment procedure. Originally intended to be an “extraordinary remedy,” the Article 52 procedure has almost become a staple of the arbitral process.  Moreover, the precise function of the procedure and its scope appears to be conceived very differently in many of the decisions of ad hoc Committees. Some have suggested that the uncertainty introduced by the application of Article 52 is undermining the finality of ICSID awards and the attractiveness of ICSID arbitration itself, in competition with other arbitral institutions available for managing international investment disputes.

             This conference, cosponsored by the Yale Journal of International Law and the American Society of International Law, will bring together leading academics and practitioners who have played central roles in the drama of Article 52 to appraise recent cases and to consider whether any adjustments to the review procedure ought to be introduced.  Meg Kinnear of ICSID will be the keynote speaker.

             The conference will take place from 9 am to 7 pm on February 11, 2012, at Yale Law School, 127 Wall Street, New Haven, CT.

 Registration is available at http://a3.acteva.com/orderbooking/bookEvent/A313974.

• Panels and speakers will be available at http://www.law.yale.edu/news/2012YJILconference.htm as they are confirmed.
• For further information, please contact Brian Bombassaro, Senior Editor, YJIL, at [email protected], Aileen Nowlan, Co-Editor-in-Chief of YJIL, at [email protected], or Matthew Christiansen, Co-Editor-in-Chief of YJIL, at [email protected].

 

Differentiated Tariff Rates for "Toys" and "Dolls"

Blogger Matt Yglesias is shocked by the different U.S. tariff rates for toys and dolls:

You probably did not realize that the official legal position of Marvel is that contrary to the general thematic content of the Marvel Universe, mutants are not people. A recent Radiolab podcast brings the shocking true story, but it's easy enough to summarize: Marvel-licensed action figures are generally made abroad and imported into the United States. But "dolls" (which are representations of people) face a higher import duty than "toys" (which are representations of non-humans), so it's in the interests of Marvel to argue that X-Men action figures should be taxed at the low ... rate.

...

What we have here is a federal 12% sales tax on dolls, but only if the dolls are made in foreign countries, and a different -- arbitrarily lower -- 6.8% federal sales tax on toys, but again only if the toys are made in foreign countries. There's no good reason to have special higher sales taxes on toys made in foreign countries, and there's certainly no good reason to tax dolls and non-doll toys at different rates.

This makes me think of a radical change to the current trade regime:  Would it be a good idea if all countries adopted a single uniform tariff rate for all products, like Chile has (with limited exceptions)?  At the very least, should there be WTO discussions about the harms caused by having so many different tariff rates?  Would some limits on differentiation be useful?

Bhagwati on the U.S. Influence on FTAs

From a recent opinion piece by Jagdish Bhagwati:

The US has been establishing a template for its PTAs that includes several items unrelated to trade. So it is no surprise that the TPP template includes numerous agendas unrelated to trade, such as labor standards and restraints on the use of capital-account controls, many of which preclude China’s accession.

From the outset, the TPP’s supposed openness has been wholly misleading. Towards this end, the TPP was negotiated with the weaker countries like Vietnam, Singapore, and New Zealand, which were easily bamboozled into accepting such conditions. Only then were bigger countries like Japan offered membership on a “take it or leave it” basis.

I would be surprised if any of these countries were "bamboozled."  Perhaps "pressured" is a better word.  But I am curious as to whether anyone has done a study of FTAs on a country-by-country basis, to see whether each country has its own "template."  Which countries are pushing for labor standards, capital account controls, investor protection, IP protection, etc?  Taking the three countries mentioned -- Vietnam, Singapore, and New Zealand -- as examples, what do their FTAs with countries other than the U.S. look like, and how does that compare with (what we know about) the TPP?

Antigua's Lawyer Reacts to Legalizing Online Gambling in the U.S.

The Antigua Observer reports on the reaction of Mark Mendel, one of Antigua's lawyers in the WTO gambling dispute, to the Justice Department opinon on online gambling noted the other day:

Reacting yesterday to the US assistant attorney general’s view on the matter, Antigua’s counsel Mark Mendel stated, “I think it is a very, very positive development. Personally, I think this would be a great time to go back to the US government and say, in light of all the things that have happened, now there is no excuse for the US government not to deal with Antigua in a fair way and in a way that allows us to reap the benefits of the victory we got at the World Trade Organisation (WTO). All the excuses they’ve used in the past are now completely gone.”

...

Mendel’s interpretation is that it brings a new chapter to the dispute, in that the US “will still say (their) laws prohibit other countries from offering these services to (their) citizens but that can’t stand. If they allow it within their own country then they have to allow it from other countries.”

The expert on finance law and offshore trading added that Antigua & Barbuda’s refusal to allow the US to change their treaty obligations means “this will be a great time for Antigua since we are the beneficiary from that (WTO) ruling … I think this is a great time to go in there and say, ‘now you’ve said this,’ there needs to be room in there for us.”

...

With the support of the ruling, Mendel said, “The whole goal of the case was to allow us to offer these services fairly to American consumers and I think what this probably does, if we play our hand right and go about it in the proper way, I think it gives us a chance to have market access which is what we’ve really been wanting all these years.”

He doesn't say it explicitly, but reading between the lines, I think he has in mind that Antigua can now argue for a much bigger "nullification or impairment" level, and this will provide better leverage for inducing the U.S. to comply with the WTO ruling.  He seems very hopeful, but I'm not sure how this will all play out.  Will there be a proliferation of state-specific online gambling rules?  Will the federal government step in?  And most importantly, will foreign companies have any opportunity to offer their services?