International Economic Law and Policy Blog

Labelling of West Bank Products

Lorand posted the other day about the South Africa-Israel dispute over labelling of West Bank products.  Sean Woolfrey of Tralac has more here:

On August 22, the South African Cabinet released a statement  approving a Department of Trade Industry (DTI) notice requiring South African traders to refrain from labelling goods produced in “Occupied Palestinian Territory” (OPT) as Israeli products. Cabinet’s decision to approve the notice drew an angry response from the Israeli government, with Israel’s Foreign Ministry describing the move as being “without precedent” as constituting “blatant discrimination based on national and political distinction” and as potentially “fostering a general boycott”. South Africa’s ambassador to Israel was also summoned to Jerusalem to explain the South African government’s decision.

Much of the furore surrounding this decision has come from a misreading of the South Africa’s actions. First of all, the South African government is not seeking to ban or restrict goods from OPT, but simply to ensure that they are not misleadingly labelled. Indeed, when issuing the notice earlier this year the DTI stated that its aim was to ensure that South African consumers would be provided with accurate information regarding the origins of the goods they purchased. Secondly – and this is a point that seems to have been missed in many of the reports of South Africa’s actions – no requirement to label these goods as ‘Made in Palestine’ has been introduced.

The DTI notice, issued in terms of Section 24 of the Consumer Protection Act (No. 68 of 2008)  requires “traders in South Africa, not to incorrectly label products that originate from the Occupied Palestinian Territory (OPT) as products of Israel”. In other words, the notice does not create an obligation to label OPT goods as ‘Made in Palestine’. Instead, it is simply seeking to ensure that such goods are not labelled ‘Made in Israel’. For the most part, these goods need not be labelled with their country of origin at all, as, apart from certain classes of goods, such as foodstuffs, foreign goods traded in South Africa are not required to bear a label stating their country or place of origin.

...

In the case of OPT products, however, WTO law does not apply as the goods in question are not products of Israel – or of any other WTO member for that matter, as Palestine is not a WTO member – and are therefore not covered by WTO law. As WTO agreements do not cover the goods of non-WTO member states, South Africa could treat OPT imports in any way it liked, by, for example, requiring ‘Made in Palestine’ labels or banning such imports outright, and it would still not be in contravention of its WTO obligations. It appears, therefore, that the precise requirements entailed in the DTI notice are: i) already required by existing South African legislation; ii) entirely consistent with the country’s WTO obligations; and iii) less restrictive than other measures which could be adopted by the South African government without contravening international law.

This is not the end of the story, however, as the government notice states that the “burden for proving” where products originate from “will lie with traders”. By contrast, the Consumer Protection Act requires only that persons do not “knowingly” mislead customers, and that retailers do not sell a product if they “reasonably could determine” that the label of that product is likely to mislead customers. The enforcement of the regulation regarding goods carrying a ‘Made in Israel’ label, and, in particular, the requirement that traders are responsible for determining the true origin of these goods – a requirement that is absent from the Consumer Protection Act and therefore would seem not to apply in the case of goods imported from other countries – could open South Africa up to the charge that this measure could result inde facto discrimination against products imported from Israel, a charge which could potentially lead to a WTO dispute.

More Tim Groser on International Law and Sovereignty

A few weeks ago, I mentioned some discussion by NZ trade minister Tim Groser of sovereignty and international law.  Here's a quote:  "The whole point of international law is to put limits around countries' sovereignty on the basis of negotiated understandings."

In a recent speech (read the whole thing, it's very good), he had more to say on the subject, focusing on trade agreements:

 The whole point of TPP and the WTO is to put some reasonable limitations on that sovereignty around principles and policies that we know work and are mutually beneficial. For the most part, the limitations will be moderate, sensible and largely about binding in existing policy settings. 

I don't often hear people (especially government ministers!) talk about this in an analytical way, which is why I keep highlighting it.  I think it's pretty clear that international trade agreements do limit sovereignty to some extent.  As Groser puts it, these agreements "put some reasonable limitations" on sovereignty based on "principles and policies that we know work and are mutually beneficial."  As a general matter, I think that is exactly right.  At the same time, I do wonder whether, in practice, we have been drawing the lines in the right places.  And although there has been discussion of sovereignty, it has sometimes been more emotional than analytical.

There is a news report today that Groser is interested in the WTO DG job.  I have no idea who is best suited to lead the WTO, in terms of achieving negotiating breakthroughs.  But for my blogging purposes, finding a DG who says interesting things about difficult and controversial issues is important, and in that regard I think Groser would be a great successor to Pascal Lamy, who has been excellent himself!

SA-Israel dispute over West Bank products

The Guardian reports:

A diplomatic row has been growing as Israel summoned the South African ambassador to explain his country's decision to label products from West Bank settlements as coming from the occupied Palestinian territories.

http://www.guardian.co.uk/world/2012/aug/23/israel-south-africa-west-bank-label

This has been discussed previously on this blog, including at the time of the ECJ's Brita case. Very interesting questions about international law, territorial application of treaties, and so on.

Plain Packaging: The International Dispute Proceedings

As discussed in the last post, Australia successfully defended the domestic challenge to its plain packaging laws.  So what are the prospects for the plain packaging complaints at the WTO and under the Australia-Hong Kong BIT?  Some experts weigh in.

At Lawyers Weekly, Andrew Mitchell says the WTO claims have “serious problems” and are unlikely to be successful. The complainants are arguing that TRIPS gives tobacco companies a positive right to use trademarks, which is a flawed argument:  “[TRIPS] gives a negative right that restricts others from using your trademark,” he explained. “Tobacco companies still have the right to use their trademark and are simply prohibited from exercising a positive right to use it on tobacco products.”

On the investment claims, we have Andrew and also Don Anton:

Don Anton, an international law academic at the Australian National University, said that Philip Morris Asia’s suit is also “questionable”. The tobacco company has challenged plain packaging by claiming the Australian Government has breached the ‘fair and equitable treatment’ obligation under its bilateral investment treaty with Hong Kong.

He told Lawyers Weekly that Australia has a reasonable argument under the various bilateral investment treaties in play that plain packaging is about protecting public health and not stealing intellectual property.

“Under most investment treaties public regulation for a public purpose, such as promoting the health and welfare of the citizenry, is not direct or indirect expropriation and therefore is not prohibited by investment treaty prohibitions against expropriation,” he said.

The tobacco company also “faces hurdles” trying to prove that investors’ legitimate expectations have been violated, an important aspect of the obligation, Mitchell continued.

“Australia’s history of progressively sterner tobacco regulation makes it difficult for them to say they had a legitimate expectation that the tobacco regulatory environment was frozen in time and that plain packaging wouldn’t be introduced,” he said.

Mitchell added that the timing of Philip Morris Asia’s acquisition of shares in Philip Morris Australia on 23 February 2011 – 14 months after the Government announced its intention to introduce plain packs – is also unfavourable to the tobacco company’s argument.

“It will be very difficult to argue that at the time of making that investment they had a legitimate expectation that plain packaging wasn’t going to be introduced when the Government had already announced it was going to do exactly that,” he said.

Over at The Australian, another skeptic is Mark Davidson, a professor of law at Monash University, who says: "PMA will struggle to show that there has been any expropriation within the meaning of the BIT."

On the other side of the argument, Philip Morris Australia spokesman Chris Argent thinks they have a good claim (shocking, I know!): "Despite the fact that plain packaging does not reduce smoking it does devalue our investment by confiscating our brands," a bullish Argent says, "and therefore compensation will be due."

For more neutral voices, Kyla Tienhaara of the Regulatory Institutions Network says there are no guarantees Australia will win the international cases.  The BIT dispute is particularly concerning: "Unlike the WTO, there's no exception under the treaty for public health measures. And unlike in the Australian Constitution, 'expropriation' - the act of a government taking private property - is defined very broadly."  And a European financial services firm called the Berenberg Bank believes the WTO claim will succeed.  They note that international intellectual property treaties "support trademark protection, regardless of the nature of the product". They also warn the government has not provided the scientific evidence to justify the effectiveness of plain packaging as an anti-smoking measure needed to trigger the public health exemption clauses: "The relevant public health exemption which allows members to void trademark rights to protect public health requires evidence that the suppression of trademarks is necessary - based on scientific evidence - and the only way to protect public health."

As for me, just briefly, on the "trade" claims, such as TBT Articles 2.1 and 2.2, I haven't seen anything to suggest that there is a compelling claim of violation.  But presumably the complainants have something in mind, so I'll reserve judgement until I see their full argument.  (I'm not sure when that will happen, though.  Some countries make their WTO submissions public, but I don't know if that will be the case here.)

On the IP issues, I'm fairly convinced by the arguments -- offered on this blog and elsewhere -- of various people who know more than I do about IP that the claims here are weak.

Finally, on investment, it seems to me there is a lot of uncertainty as to just what the relevant obligations require. That may make these claims the most likely ones to succeed.  But there are still a number of hurdles to overcome, as noted above.

ADDED:

Speaking of the international complaints, Ukraine's panel request -- hot off the elecronic presses -- is here: http://www.worldtradelaw.net/pr/ds434-11(pr).pdf

Australia Wins the Plain Packaging Case

... in domestic court anyway.  From The Guardian:

Australia's highest court has endorsed cigarette plain-packaging laws that will force tobacco companies to remove branding from their products.

Tobacco companies British American Tobacco, Britain's Imperial Tobacco, Philip Morris and Japan Tobacco challenged the laws in Australia's high court, claiming the rules were unconstitutional because they effectively extinguished the companies' intellectual property rights.

The court found Australia's laws to force companies to remove all branding and sell tobacco only in generic olive green packets, which also carry graphic health warnings, were legal and did not breach trademark rights.

Some television commentary is here.  As I understand it, the reasoning won't be available for a while.  Benn McGrady comments:

When the reasons are released, there will be two things to look for.

First, the decision might examine the question of what rights are conferred under Australian trademark law. The key question is whether Australian law grants the holder of a trademark right the affirmative right to use that trademark, as compared to merely a right to exclude third parties from use. If it is forthcoming, the answer to this question will be particularly relevant to the investment treaty claim, in which Philip Morris is arguing that the effect of the measure is to expropriate trademark and other rights.

Second, in determining the nature and scope of trademark rights under Australian law, it is possible that the Court will interpret the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). If the Court does so, the reasoning used might be influential in both the WTO and investment treaty claim.

Investor-State in China: Part II

The Economist has an interesting article about the some Chinese government officials who left the public sector to start a private oil drilling business.  Some key excerpts:

It was in 2003 that the central government’s patience snapped. At meetings in the spring, Jingbian officials told the local oil barons that Beijing had ordered them to put an end to the private drilling experiment, citing the 1999 directive that they had hitherto ignored. Feng Xiaoyuan, the former chief of animal husbandry, represented the small-time operators. Among those sitting quietly across the table was his old deputy, Wang Zhihua, who was now a county oil official. Their fortunes were about to be reversed.

In May 2003 Jingbian authorities moved to confiscate some 1,600 wells, sending in the police to stop private owners from retaking them. In all, local governments in Shaanxi nationalised about 4,000 wells worth perhaps $850m in those days, when oil was still less than $40 a barrel (it is easily more than twice that today). Across northern Shaanxi, hundreds of private investors protested against the seizures. Some were beaten up, while others were detained. Most eventually took the meagre compensation on offer, some $240m in all.

Yet Feng Xiaoyuan, Feng Bingxian and Wang Shijun, who had been on their way to becoming oil millionaires, continued to press their case. They attempted to organise a mass lawsuit. The courts refused to take the case; their lawyer was detained; and they were arrested and jailed, for disturbing the peace and for illegal assembly. Feng Bingxian spent three years in prison, while the other two men served terms of five and six months. Feng Xiaoyuan was expelled from the party.

A county-run company, meanwhile, took over oil production, with Wang Zhihua one of the top men in charge. ...

What struck me about the events here is that if anything remotely similar happened to foreign investors, there would seem to be some pretty good investment claims.  Assuming this is not an isolated incident, it strikes me that China could have significant exposure to investor-state complaints, with implications for how it approaches investment treaties in the future.

Trade in Everything: Diaper Fluff

From the WSJ:

Three years ago, International Paper Co. closed an enormous mill [in Franklin, Virginia] that for generations had churned out white office paper, putting 1,100 people out of work and dealing a major blow to this tidewater city of 8,500.

Now, the world's largest producer of paper products is reopening part of the mill with an eye toward an expanding market in Asia for personal-care products. With about a fifth of its old workforce, IP's Franklin mill is gearing up to begin producing fluff pulp—the soft, white absorbent used in diapers, tampons, and some medical bandages.

"There is a huge, huge opportunity" as families in the burgeoning middle classes of China, India and other Asian countries are seeking more personal hygiene and baby care products, said Rildo Martini, IP's vice president and general manager for pulp.

...

World-wide demand for the substance has been rising about 4% a year and is expected to keep growing for years to come. ...

...

But the mill on the inky Blackwater River is able to take advantage of Asia's growing desire for fluff because it can be made only from the long, coarse fibers of loblolly pine, a fast-growing tree that thrives in the U.S. South. Its fibers are ground, boiled, bleached and pressed into puffy white material that can absorb what a baby can excrete.

Apparently, American's comparative advantage is in absorbent diapers.  Who knew?

Codex Votes and WTO Law

Alberto Alemanno has an interesting post on the relationship of Codex setting food safety standards and WTO law:

Although few Europeans outside of the livestock industry have heard about this veterinary drug, the establishment of MRLs of ractopamine by the Codex Alimentarius Commission is set to become not only the trigger of another endless transatlantic trade dispute, but also a test case for the emerging, yet fragmented, multilateral food safety governance system

Although few Europeans outside of the livestock industry have heard about this veterinary drug, ractopamine is set to become not only the source of public concern but also the trigger of another endless transatlantic trade dispute.

After years of scientific and political deadlock, the Codex Alimentarius Commission (CAC) narrowly voted (69-67), on July 5, 2012 to adopt the first-ever maximum residue levels (MRLs) for ractopamine hydrochloride, a controversial veterinary drug used in animal feed that boosts growth and promotes leanness in pigs and cattles, and, to a limited extent, heavy turkeys.

This decisions is a big win for the United States', Brazil's and Canada's trade interest and a lost combat for the 100 countries that have banned – on human and animal health grounds – the use of this substance in recent years. Among the latter countries, there are the EU and China, who together account for 70% of the world’s pig production. While this decision has been welcomed by the countries who use the drug in livestock production as a victory for ‘science-based’ standard-setting within Codex, the conditions surroundings its adoption signal the limits faced by the actual food global governance system for food safety epitomized by the institutional collaboration established between the WTO and the Codex Alimentarius.

In particular, the high polarization on the political acceptability of the substance as well as the politicization of its underlying science that have accompanied the discussions within Codex are likely to weaken the legitimacy and overall effectiveness of the adopted standard on the multilateral global food safety governance. In particular – as it has been widely observed – this decision, by making it easier for the U.S. and others to challenge countries like China, the European Union and Taiwan for having zero tolerance policies for ractopamine residues in meat products, is likely to lead the World Trade Organization to judge against those countries that ban the use of ractopamine. Yet this likely outcome begs the question of whether the weight of an international standard adopted with a one vote difference could realistically be considered tantamount to one adopted under consensus. While there is no doubt that legally speaking these standards are equal (see EC-Sardines), one may wonder – along the lines of the European Commission’s press release published in the aftermath of the adoption of the Codex standard – whether “for standards to be universally applicable, they (should) also need to be universally accepted”. Moreover, what makes the ractopamine case even more complex than previous similar disputes, such as EC-Hormones, is the range of public concerns invoked to sustain the legality of the restrictive measures. Not only it is claimed that ractopamine raises human health risks but also animal health and welfare considerations are invoked.

In the meantime, in the aftermath of the Codex Alimentarius’ vote on minimum amount of ractopamine,Taiwan has declared to be ready to relax its ban of beef containing ractopamine residues, while Russia is ready to ban them for the first time.

In these circumstances, ractopamine is set to become the source of another endless transatlantic trade dispute and a test case for the embryonic and fragmented global food governance system.

State Dept Investment Law Job

See here:

Job Title:Deputy Assistant Legal Adviser

Department:Department Of State

Job Announcement Number:CSHRM-2012-0022

SALARY RANGE:	$119,554.00 to $179,700.00 / Per Year
OPEN PERIOD:	Friday, August 10, 2012 to Friday, August 24, 2012
SERIES & GRADE:	ES-0905-00
POSITION INFORMATION:	Full Time - Permanent
DUTY LOCATIONS:	1 vacancy - Washington DC Metro Area, DC, US
WHO MAY BE CONSIDERED:	All groups of qualified individuals. Noncompetitive (Current career SES, QRB certified graduates of SES candidate development programs and individuals with SES reinstatement eligibility) "You are encouraged to read the entire announcement before you submit your application package. Your application may not get full consideration if you do not follow the instructions as outlined."

JOB SUMMARY:

...

This position is organizationally located in the Office of the Legal Adviser, Office of International Claims and Investment Disputes (L/CID). The incumbent serves as the Deputy Assistant Legal Adviser and is the full Deputy to the Assistant Legal Adviser for International Claims and Investment Disputes. As such, the incumbent fully participates with and assists the Assistant Legal Adviser (ALA) in providing leadership and direction to the programs and broad functional responsibilities involved in formulating and implementing the legal policies for and providing legal advice and services to the Department with respect to international claims and investment disputes brought by the United States and U.S. nationals against foreign governments as well as those brought by foreign nationals against the United States. In consultation with the ALA, agreement is reached on shared responsibilities and those that rest primarily with the incumbent as the full Deputy. 

...

The incumbent participates with the Assistant legal Adviser, and as may be agreed to with the ALA, assumes responsibility for aspects of the following in providing legal advice and services and in carrying out the activities involved in the analysis, formulation, development, interpretations, implementation, and management of legal policies and programs relating to:

-Claims  of the U.S. and U.S. nationals against foreign governments and of foreign national and governments against the United States.

-Espousal of claims, negotiation of lump sum settlements, and presentations of claims before dispute settlement bodies.

-Claims of U.S. nationals and aliens against the Department of State under the Federal Tort Claims Act of 1949, as amended.

-Claims by owners of vessels registered under the laws of the United States for reimbursement under the Fisherman's Protective Act of 1967, as amended

- Claims of the U.S. Government by and against foreign governments.

-Matters involving the Iran-United States Claim Tribunal in the Hague

-Claims under the investment chapter of the North American Free Trade Agreement

-Claims against foreign states of the Overseas Private Investment Corporation under the dispute provision of bilateral investment guarantee and investment incentive agreements.

-Claims against the United States and state-to state claims against foreign states for espousal claims under the dispute provisions of bilateral and other investment provisions of free trade agreements.

The incumbent participates with the ALA in assuring the legal interests if the United States in the handling of specific claims and investment disputes are brought to bear in the formulation, coordination, and management of legal and other policies concerning such matters as the regulation of foreign government under bilateral investment treaties as well as customary international law.

 

Institute for Transnational Arbitration Winter Forum

From law prof Jarrod Wong:

The Institute for Transnational Arbitration (ITA) will be holding its Second Annual Winter Forum at the Biltmore Hotel in Miami, Florida on January 24-25, 2013.

The first half of the Winter Forum will showcase two works-in-progress selected pursuant to a Call-for-Papers, encompassing presentations by authors, commentary by internationally recognized academics and practitioners, and interactive discussion among all participants.  After a conversation over lunch with renowned authority Gary Born, chair of the International Arbitration Practice Group of WilmerHale, the Winter Forum will feature a Tylney-Hall-style discussion forum, before concluding with a select year-in-review of noteworthy events in international arbitration.

We are now inviting submission of proposals on international arbitration for the Call-for-Papers.  All proposals must be submitted via email to [email protected] by Sept 1, 2012.   Any questions should be directed to either of the ITA Winter Forum 2013 Co-Chairs, Joseph Matthews ([email protected]) or Jarrod Wong ([email protected]).  Full details can be found at this link: http://www.cailaw.org/ita/2013winforum_papers.pdf 

Investor-State in China

Law professor Leon Trakman writes about China's "prolifering investment treaty program":

Notwithstanding China’s endorsement of investor-state arbitration more than a decade ago, only one investor claim has been initiated against it and it was withdrawn.  This does not necessarily mean that foreign investors will not make such claims in the future, but rather that proceeding against China, from an economic rationalist perspective, is likely to be contentious, costly and dilatory.  However, these concerns are not peculiar to China. Economically and politically powerful states, not least of all the United States, are less frequently subject to investor-state arbitration than poorer states for much the same reason.

What is increasingly apparent, however, is that China is preparing itself for investor-state proceedings against it in the future. This is evident, for example, in China’s growing interest in the functioning of the International Center for the Settlement of Investment Disputes [ICSID], among other institutions, in its inclusion of investor-state arbitration in its Model Bilateral Investment Agreement and in the various regional and bilateral agreements it has concluded.

What is also apparent is that China is well aware that the price of negotiating treaties to promote both inbound and outbound investment is the prospect that foreign investor claims will inevitably be lodged against it.  However, China is also aware that the investment benefits may well outweigh these costs.  After all, China has grown into the second largest economy in the world.  It is the second largest recipient of foreign direct investment [FDI].  It is sixth in outward FDI.  It well appreciates the economic rationalist reasons for promoting such investment, along with the risks.

With all of the investment treaties it has now signed, how many cases will there be against China in the future?

... the accusation that few foreign investors are likely to bring ISA claim against China is comparable to their reluctance to bring claims against other powerful countries.  Germany, with the largest number of BITs, has been subject to only one such claim.  This is not to deny that foreign investors that lodge ISA claims against China will face formidable resistance from a centrally directed economy with the financial muscle and capacity to mount a consolidated defense in the national interest. What is contended is that it is too early in China’s participation in the BITS revolution to conclude that China will be impervious to foreign investor claims, or will necessarily deter, or readily win claims brought against it.  It is simply too early to make such a prediction. ...

And what will be the reaction when Chinese foreign investors start bringing cases?

The attitude towards investor-state is worth watching in a number of countries right now, but China might be the most interesting.

Investor-State in Australia

The Australian business community fights back:

Sixteen peak business groups and leading companies have sent a letter of protest to Julia Gillard over the government's refusal to include provisions in a series of pending trade agreements that would protect the property and legal rights of Australian companies in other countries.

These "investor-state dispute-settlement provisions" allow companies to bring arbitration proceedings if governments breach an agreement with the company through policy decisions such as the nationalisation of their assets.

...

Without dispute-settlement provisions, the business groups believe the free-trade agreements will provide inadequate protection for Australian companies internationally and will reduce Australia's attractiveness for foreign investment.

"The government's refusal to consider such provisions in current or future regional and bilateral free-trade agreements is a flawed approach which reduces security for Australian firms," the letter says.

It was signed by Peter Anderson, the chief executive of the Australian Chamber of Commerce and Industry, and 15 other business leaders, including Stuart Clark, the chief operating officer of national law firm Clayton Utz.

...

Without such provisions, the business groups fear companies would be at a disadvantage when operating in countries that, while growing rapidly, may have systems of government that are less developed than Australia's.

Do they have a chance to convince Australia to change course?

The End of NAFTA Chapter 19?

Here's a letter sent by a number of members of congress -- including frequent trade critic Mike Michaud -- to President Obama relating to the TPP:

August 2, 2012

The Honorable Barack Obama
President of the United States
1600 Pennsylvania Ave.
Washington, DC 20500

Dear Mr. President:

Rules-based trade and U.S. trade laws are vitally important components to our nation’s forestry jobs.  It is imperative that trade agreements not undermine the effectiveness of our trade laws. Upholding this principle in the Trans-Pacific Partnership (TPP) negotiations could mean the difference between a healthy U.S. forestry industry, and one falling victim to unfairly traded imports. Although we may have differences of opinion on the overall Trans-Pacific Partnership trade agreement, we can all agree that we must have the strongest agreement possible for our domestic industries.

A final Trans-Pacific Partnership (TPP) trade agreement must eliminate inequities currently present in the application of U.S. trade laws against foreign unfair trade practices.  Specifically, the final text of the TPP must include language making all signing parties subject to full judicial review with respect to the application of domestic trade laws.

Existing U.S. free trade agreements uniformly provide for the continued application of national antidumping and countervailing duty laws to imports from partner countries.  However, the U.S.-Canada Free Trade Agreement, and subsequently NAFTA, provide for international dispute settlement panels to substitute for domestic judicial review of antidumping and countervailing duty determinations by national investigating authorities.

NAFTA’s “Chapter 19” panel system has undermined the full effectiveness of our trade laws when it comes to unfair Canadian trade practices and cross-border trade matters. Instead of allowing U.S. Courts to determine whether the U.S. government has properly applied U.S. trade laws, NAFTA Chapter 19 transfers that authority to private non-U.S. citizens – who interpret U.S. law and make binding decisions upon U.S. federal agencies.

The NAFTA dispute settlement system completely turns on its head the fundamental principle of U.S. jurisprudence that all parties are entitled to full judicial review by an independent and competent judiciary. Under Chapter 19, foreign individuals can dictate how U.S. laws are enforced without any review by the U.S. judiciary.  This entrustment of the interpretation of our laws to NAFTA panels has severely injured U.S. forestry industries and workers that depend on these laws to fight unfair trade practices.  We must not repeat this mistake under TPP.

The TPP negotiations provide an excellent opportunity to bring U.S. trade law as it pertains to Canada (and Mexico) into harmony with that for other TPP members.  The TPP must specifically preserve the sovereign right of all member countries to use their trade laws with respect to unfairly traded imports from other TPP countries.  Given Canada’s track record of providing massive subsidies to its forestry industry and unfair lumber trade practices, a TPP agreement that includes Canada must provide for normal domestic judicial review of trade law actions with respect to all TPP members.

Ensuring that all signing parties to the Trans-Pacific Partnership are subject to the same application of domestic trade laws and full judicial review would ensure that our trade laws are fully enforced.  Resolving this issue is of utmost importance to our domestic forestry industries, and will help preserve good American jobs in our rural communities that can least afford the loss of these jobs.

Assuming the TPP is eventually completed (perhaps not very likely), what would become of NAFTA Chapter 19?  If the policies advocated in this letter are followed, there will be no Chapter 19 equivalent in the TPP.  But what about Chapter 19 itself (and NAFTA rules more generally)?  Will it continue to exist as it stands now?  Or will it be superseded by the TPP's (non-)rules in this area?  It's clear what the signers of this letter want.  I'm just wondering how things will actually play out.