International Economic Law and Policy Blog

Renewable Energy Commentary from Economists

Back in May, I mentioned some comments by economist Amar Breckenridge on the FIT/Renewable Energy WTO panel report.  Along with a colleague, he has a new piece on the AB report.  Here's an excerpt related to the AB's discussion of market definitions and the existence of a subsidy:

It is not clear, however, that the existence of “green energy” plans offers a persuasive basis for considering that different markets exist for electricity according to energy source. The fact that energy producers offer such plans is not primarily a reflection of a response to consumer tastes. Rather, it more usually reflects the response by energy suppliers (and retailers, more specifically) to incentive mechanisms put in place by governments to expand the supply of electricity based renewable energy sources. But these incentive mechanisms exist precisely because in their absence suppliers would have few incentives to supply electricity from low emissions sources which in the normal operation of energy systems would be substituted for by lower cost- higher emissions sources. Ultimately, the extent to which end-consumers of electricity differentiate on the basis of energy sources is an empirical question to be addressed by robust analysis.

Cloves, Tuna, COOL Update

If you are wondering what's going on with the Cloves, Tuna, and COOL WTO disputes, Jamie Strawbridge has an ASIL Insight with some details on the implementation status of each.  From the conclusion:

If the WTO upholds U.S. compliance steps in some or all of these cases, the United States will have navigated around fears that adverse rulings necessarily lead to weakened regulatory standards. In fact, if the U.S. approaches are affirmed, it could be said that these challenges encouraged “pro-consumer” and “pro-health” outcomes and did not lead to increased access for imports - an ironic twist that may make other WTO members think twice before mounting similar challenges under the TBT Agreement.

He also notes that: "The U.S. approach to compliance in U.S.—Tuna II (Mexico) is perhaps the most likely to survive further scrutiny."  I agree with him there, although predicting how specific cases will turn out can be difficult.

(For those who don't know him, Jamie spent many years reporting on WTO disputes and other trade issues at Inside U.S. Trade.  Even without a legal background, he did a great job with this.  He is now a J.D. student at Georgetown Law, and I'm eager to see what he comes up with after arming himself with some actual legal knowledge!)

CETA and Investor-State

From the Canadian government's "Technical Summary" of CETA:

Investment protection rules

• • Strong rules that take into consideration lessons learned from past FTAs and foreign investment promotion and protection agreements
  • Commitments to treat investors from Canada and the EU fairly and equitably and in non-discriminatory manner
  • Provisions on expropriation, including indirect expropriation
    • annex clarifies that non-discriminatory, good-faith measures to protect health, safety and the environment do not constitute indirect expropriation
  • Robust and innovative provision on minimum standard of treatment
    • new format for article but substantively the same as NAFTA (that is, substantively the same as the customary international-law minimum standard of treatment)
  •   Investment-protection rules subject to ISDS on only a post-establishment basis

Investor-state dispute settlement (ISDS)

•  
  • Clear and detailed rules of procedure to promote the efficient resolution of investor-state disputes
  • Enhanced consultations and new mediation provisions encourage early settlement of disputes without recourse to arbitration
  • Transparent ISDS process, making submissions to the arbitral panel public and generally opening hearings to anyone interested
  • Allows amicus curiae interventions (non-disputing individuals and organisations may seek leave to submit briefs to the arbitral panel)
  • Provisions to allow for early dismissal of frivolous and stale claims to ensure that the process will not be abused
  • Standing provision adjusted for the Convention on the Settlement of Investment Disputes between States and Nationals of other States (the “ICSID Convention”)
    • allows an investor to bring a claim against the host state for a breach of obligation and for damages arising from that breach
    • Canada plans to become a party to the ICSID Convention, which allows for locally established, foreign-owned companies to bring a claim.
  • Accordingly, when the ICSID Convention arbitral rules apply, that foreign-owned company may initiate a claim
    • does not change the result of Canada’s current standing approach
  • To pursue an ISDS claim, an investor must file a waiver abandoning any other parallel claim it may have seeking damages related to the same measure(s).
    • Future claims are also prohibited when the ISDS claim is dismissed on its merits.
    • If the ISDS claim is dismissed in its early stages, such as on procedural or jurisdictional grounds, then an investor may pursue its claim elsewhere.
    • If the ISDS claim is withdrawn within 12 months, the investor may pursue its claim elsewhere
  • An ISDS tribunal cannot order the repeal of the host state’s measure.
    • It may order an award, separately or in combination, for damages or restitution of property, as well as costs.
    • When calculating a damages award, a tribunal must consider, amongst other factors, whether a measure has been voluntarily repealed or modified.
      • This may serve to discount the amount of damages awarded to the investor
  • Canada and the EU may adopt interpretations of a provision in the investment chapter that are binding on investor-state dispute-settlement arbitration tribunals.
    • Such interpretations can be used to clarify the parties’ intent when the obligations were negotiated.

Among other things, I'm curious to learn more about the "Provisions to allow for early dismissal of frivolous and stale claims to ensure that the process will not be abused".

EU-China Investment Treaty Issues

I've gotten to know some of the folks at Brussels think tank ECIPE over the past year, and I always enjoy their work.  Here's a new piece from research associate Michal Krol entitled "The Case for an EU-China investment agreement": http://www.ecipe.org/media/publication_pdfs/ECIPE_Bulletin_6_FINALPDF.pdf  An excerpt:

all the BITs that China has with EU countries are not of top standard. Provisions in these BITs vary and vague language makes them susceptible to different interpretation. Both sides need to get agreements with improved legal clarity and precision – binding agreements rather than rehearsals of ambiguous and broad legal concepts. The latter invites confusion and unpredictability – and prompts firms to test the limits of an agreement through investor-state litigation, adding yet more tensions.

It won't surprise anyone to learn that I agree with all of this in a general sense.  I would love to see future investment negotiations look closely at possible legal obligations, with the aim of improving certainty and clarity, and removing unpredictability.  I don't know exactly where that would take us, but hopefully a better place than where we are now.

I also wanted to mention one other issue in the paper.  He talks about the difference between the goals of "market access" and "investment protection."  By this, I take it he means rules that enable investments to be made in the first place, on the one hand, and rules that protect existing investments, on the other.  But I wonder if the investment debate is better served by deemphasizing this distinction, and focusing more on the general principle of non-discrimination:  Governments can't discriminate against foreign investors/investments, regardless of whether the investment has been made yet.  (Part of my concern here is the uncertainty over the term "market access").

CETA and Services Trade

From the Economist:

[CETA] also takes a crack at liberalising cross-border ... trade in services in ways that previous trade negotiations have rarely attempted. 

...

The aim is to begin lowering barriers to trade in services just as past agreements removed obstacles to trade in goods: a worthy goal, since services generate about 70% of rich-world GDP.

...

But if CETA can work, it will be harder for protectionists to claim that services cannot be liberalised. 

I'm puzzled by this.  Does the CETA really go further on services trade than other agreements have?  Or is this a case of the media not understanding how trade agreements work?  Trade in services rules are not exactly new at this point, and plenty of service sectors have already been liberalized.

Call for Submissions on Trade and Climate Change

From my friends at the Trade, Law & Development journal:

Founded in 2009, the philosophy of Trade, Law and Development has been to generate and sustain a constructive and democratic debate on emergent issues in international economic law and to serve as a forum for the discussion and distribution of ideas. In keeping with these ideals, the Board of Editors is pleased to announce Trade and Climate Change as the theme for its next Special Issue (Vol. VI, No. 1).

Climate change is one of the foremost challenges facing the global community today and intersects with international trade in numerous ways. Sustainable development and protection and preservation of the environment are recognized as fundamental goals of the WTO, although its principal objective is to foster international trade. The WTO permits members to avail of exceptions to its principles in order to protect the environment under specific conditions. The on-going Doha Round has further consolidated the WTO’s stance on the environment by launching the first ever multilateral trade and environment negotiations. Moreover, the recent COP-15, Rio+20 and Earth Summit negotiations have given significant impetus towards achieving a global solution to climate change. There is hope that this multilateral dialogue will materialise into a global climate change deal in 2015 under the auspices of the UNFCCC.

This Special Issue, currently scheduled for publication in June, 2014, will provide an ideal platform for deliberation on the relationship between trade and climate change in the run-up to the proposed 2015 global climate change deal. Accordingly, the Board of Editors is pleased to invite original, unpublished submissions for the Special Issue on Trade and Climate Change for publication as ‘Articles’, ‘Notes’, ‘Comments’ and ‘Book Reviews’. Preference will be given to submissions that espouse perspectives of developing and under-developed countries.

Manuscripts may be submitted via email, ExpressO, or the TL&D website. For further information and submission guidelines, please visit the Journal’s website: www.tradelawdevelopment.com.

In case of any queries, please feel free to contact us at: editors[at]tradelawdevelopment[dot]com

LAST DATE FOR SUBMISSIONS: JANUARY 31, 2014

 

Food Security and Agriculture Trade Talks: The G-33 Proposal

Previous posts to this blog have discussed trade-policy responses to the food price spikes of recent years; a recent study by Rob Howse and Tim Josling argued that WTO Members might be obliged to refrain from restricting exports to secure domestic food supply if doing so could adversely affect the food security of importing countries. This is an issue of special concern to import-dependent developing countries, where food price inflation may be amplified by larger balance of payments problems.

It looks as though not export restrictions, but rather subsidies and other domestic measures, are most prominently characterizing new food security programs. India is implementing a Food Security Act that WTO Director-General Robert Azevedo asserts is a violation of AMS commitments under the Agriculture Agreement. Food stockpiling has been a major issue in recent WTO Agriculture Committee proceedings. 

The upcoming WTO Ministerial Conference in Bali this December will address a G-33 proposal to amend aspects of the Agriculture Agreement to enable greater stockpiling, subsidies and other food security measures. A recent ICTSD note about the proposal seems sympathetic to its objectives, stating that “insofar as it relates to problems arising from the effects of food price inflation, the G-33 proposal can more broadly be seen as symptomatic of the challenges many countries face in designing policies to achieve food security goals in the new price environment.”

Here’s a quote from the report’s conclusion:

 “Although agricultural markets have evolved dramatically since 2007, global trade rules have not. Current disciplines on agriculture in the multilateral trading system deal primarily with the challenges of structural over-supply on global markets that characterized the 1980s and 1990s, but arguably do not respond effectively to problems associated with the volatile and rising prices for food and agriculture that many experts expect will continue to predominate in the years ahead. As a result, while exporting countries are able to rely on a relatively well- developed set of rules and mechanisms to address trade distortions on the import side, importing countries (including the poorest ones) are unable to rely on an equivalent regulatory framework to ensure stability and predictability in the supply of farm goods on world markets. Ambiguities and inconsistencies continue to affect the ability of WTO Members to understand and monitor new phenomena properly…”

 My questions include:

 - Are AMS amendments preferable to export restrictions as a means of addressing food security? The ICTSD note suggests that such measures might even help import-dependent countries, where such countries can enter into deals with stockpiling countries.The interplay of potential effects on internal and external markets seems incredibly complex.

 - How might the G-33 negotiations affect the balance of agriculture negotiations? The proposal’s supporters are linking it to trade facilitation negotiations sought by developed countries. From a policy point of view, the proposal potentially impedes the case for agricultural market access that developing countries have put forward, and in that sense depends on an effective revitalization of the special and differential treatment principle.

More on National Treatment in the Bilcon NAFTA Chapter 11 Case

Last year, I mentioned an issue related to the meaning of national treatment that is likely to come up in the Bilcon NAFTA Chapter 11 case.  Here are some brief thoughts on the same issue from the U.S. non-disputing party submission:

NAFTA’s national treatment provision, Article 1102, is designed to prohibit discrimination on the basis of nationality. Article 1102 paragraphs (1) and (2) are not intended to prohibit all differential treatment among investors or investments. Rather, they are intended only to ensure that Parties do not treat entities that are “in like circumstances” differently based on their domestic nationality. If the challenged measure, whether in law or in fact, does not treat foreign investors or investments less favorably than domestic investors or investments on the basis of nationality, then there can be no violation of Article 1102.

Written submissions are great, but even better sometimes are the questions and answers at the hearing, which is streaming live on the web this week: http://www.pca-cpa.org/shownews.asp?nws_id=396&pag_id=1261&ac=view

The European Commission on Investor State, Part 4

And finally, one last claim addressed by the Commission in defense of investor state:

Claim: Investors should not be allowed to challenge governments directly in international law. Only governments should be able to act against each other, via state-to-state dispute settlement.

The Commission responds that:

It is investors who actually suffer the financial losses. Governments (including the EU) need to pursue the general interest, and that means that they have neither the time nor the resources to follow-up each individual alleged breach of the agreement. ...

But compare trade and investment rules on this point.  With trade, we rely on state-state, and governments seem to be able to handle this.  Why treat foreign investment differently?

The European Commission on Investor State, Part 3

The third claim related to investor state that the European Commission addresses is the following:

Claim: Investor-state dispute settlement undermines public choices (e.g. Vattenfall challenging the German moratorium on nuclear power, Philip Morris challenging Australia’s plain packaging regime for cigarettes)

The Commission then distinguishes the remedies under trade rules and investment rules:

"Should Australia lose the [plain packaging] case at the WTO it would indeed be under an obligation to change its legislation. This could not happen as a result of the investor state dispute settlement. Whatever the outcome of the Philip Morris investor state dispute settlement case, we can be sure that Australia will remain free to maintain its legislation. Same goes for Vattenfall case and Germany's ban on nuclear energy."

To me, the Commission's answer seems technically true, while not giving the full picture. It is true that at the WTO, there is a formal obligation to change legislation. At the same time, a losing country does not actually have to change its legislation. Instead, it could simply accept the withdrawal of concessions in response, or perhaps negotiate some compensation. We have seen this on several occasions.

As for how investor state works, it is true that Australia and Germany can maintain their measures. However, they might have to pay millions or billions of dollars/euros as compensation (I'm not sure what the amounts claimed in those cases are). Which system interferes more with "public choices"? That's a hard question to answer. But certainly they both get in the way a little bit. One obvious suggestion is to tweak the rules so that they get in the way a little bit less.

The European Commission on Investor State, Part 2

Here's another "incorrect claim" about investor state that the European Commission responds to:

Claim: Investor state dispute settlement gives too many rights to companies

The Commission response is, "Wrong!" In fact, the Commission says, such rights are "limited," as they are restricted to "generally accepted principles of international law," such as "protection against discrimination, protection against unlawful expropriation and a requirement to treat investors fairly and equitably."

On this issue, I would note a couple things.

First, I think that the principle of non-discrimination could be fairly limited, but the way it is interpreted by some people in the field is potentially very broad, as it goes far beyond the idea of nationality-based discrimination, and ends up somewhere I can't quite figure out.

Second, while the idea of protecting against "expropriation" may be limited, protection against "regulatory expropriation" has a lot of uncertainty in it. National legal systems differ on the scope, and even within those systems the concept does not seem well-settled.

And finally, I don't think we even need to get into the jurisprudence on "fair and equitable" to have a sense of how vague, broad, and potentially "unlimited" these provisions are, simply based on the words themselves.

The European Commission Defends Investor State

I mentioned that, having taken the EU side on issues related to regulatory trade barriers, I would criticize the EU soon, to make sure that this blog is "fair and balanced". So here goes.

The European Commission has posted a short document in which it defends investor state dispute settlement. In the document, the Commission puts forward what it considers to be "incorrect claims" about investor state, and then rebuts each one. I'll address a couple of these, one post at a time. Here's the first one.

Claim: Investor-state dispute settlement subverts democracy by allowing companies to go outside national legal systems.

The Commission responds "Untrue!" They elaborate by noting that:

- Many "healthy, vibrant democracies" have signed on to investor state;

- Relying on national courts to enforce obligations in investment agreement can be hard, because:  those courts might be biased or lack independence; they may not be accessible to foreign investors at all; and countries might not incorporate investment agreement rules into national law.

My first concern here is that this presentation of the issue by the Commission seems to blur together two separate concepts: democracy and national sovereignty.  They really need to be separated out and discussed individually.

On the democracy point, while this isn't something I have focused on in my own critique of investor state, I do think the issues are more complicated than the Commission lets on. For those countries that are democracies, allowing lawsuits to be brought in international courts takes the issue out of democratic legal systems, and puts them into an international arena that has something of a democracy deficit. Democracy is a complex and nuanced thing, but presumably it involves, to some extent, input from people directly or through their representatives. There isn't much of that at the international level. So does investor state "subvert" democracy? That may be overstating things a bit, but I see how one could argue that democracy is undermined to some extent -- that is, there is less democracy -- through the investor state system.  The fact that democracies agreed to it in the first place doesn't change this.  Democracies can agree to all kinds of things which would undermine democracy.

The more important point, I think, is that investor state allows companies to go outside national legal systems. As far as I can tell, that aspect of the investor state critique is certainly true. To some extent, policy-making is shifted from national lawmaking processes to international courts. Maybe that's fine, but for those who support this, I would say they should make clear this is happening and explain why it is a good idea.  In this regard, the Commission makes several points -- noted above -- regarding how national courts are unsatisfactory for investment disputes. But not all nations' courts have these problems. An obvious question arising from the Commission argument is, should international courts only play a role where national legal systems are problematic?  And what are the implications of providing for these courts where the national systems are just fine?  There may be an argument that fundamental legal principles such as "fair and equitable treatment" should operate at the international level to constrain national governments as a general matter, as a form of global constitutional law.  But defenders of the system seem to want to bend over backwards to avoid addressing this issue head on.

The Canada-EU Trade Agreement is Here! Almost!

I've been excited to look at a number of aspects of the Canada - EU Comprehensive Economic and Trade Agreement (CETA), including regulation, investment and IP.  So I was excited to see the news reports this week that it was almost done.  Then today there were headlines like this:

- The Globe and Mail: Canada, EU, unveil 'historic' free trade agreement;

- The European Commission:  EU and Canada strike free trade deal.

Great, I thought.  I can't wait to see the text!

But then I saw this:

But the text of the so-called CETA agreement remains a private document that still requires "drafting and fine tuning" and will need a "scrub" from lawyers to make sure it is "legally coherent," a Canadian official said in Brussels on condition he not be identified.

It could be another 18 to 24 months before final European approval is given, and Canada will likely proceed along a similar time frame, the official said.

...

... ratification could be complex, perhaps requiring all 28 EU members to ratify, as well as a green light on key issues from Canada's 10 provinces.

Presumably they will have to release the text at some point before approval, but it may be a while.

More on US-EU Regulatory Trade Issues

Following-up on my post last week about the dueling U.S./EU speeches on "regulatory trade barriers", here's an excerpt from an op-ed we wrote on these issues:

... The EU focus on tackling existing and future regulatory divergences, as opposed to domestic regulatory reform, is a useful starting point for addressing this issue. It can lead to concrete economic gains, and, if done right, should not interfere with domestic policy objectives.

...

By contrast, the goal of using binding international agreements to improve the domestic regulatory process more generally is asking a lot, and it is uncertain whether this would yield any major benefit in reducing the burden of regulation. Domestic regulatory systems are the result of complex internal processes, and cannot easily be changed. The EU regulatory system is not some accident of history. They have spent a lot of time developing it, and it would not be easy to get internal agreement on modifications. ...

We're currently working on another short piece on this, where we go into more detail on the U.S. efforts to push its regulatory regime abroad.

And just so people don't think I'm favoring the EU, and so as to maintain a "fair and balanced" position on this blog, I promise to criticize the EU on a different issue soon!

Death Penalty Export Restrictions

From a recent news report:

Missouri Gov. Jay Nixon on Friday halted what was to have been the first U.S. execution to use the popular anesthetic propofol, following threats from the European Union to limit the drug's export if it were used for that purpose.

Nixon also ordered the Missouri Department of Corrections to come up with a different way to perform lethal injections without propofol, the leading anesthetic used in America's hospitals and clinics. Nearly 90 percent of the nation's propofol is imported from Europe.

...

The leading propofol maker, Germany-based Fresenius Kabi, and anesthesiologists had warned of a possible propofol shortage that could impact millions of Americans if any executions took place.

It's not clear to me exactly what the "threats from the EU" were.  They may just have been from the German company that was mentioned.  But let's say it was an EU governmental entity threatening export restrictions. For WTO purposes, if the threat were carried out, you would have the withholding of a drug used for anesthesia, in order to prevent it being used for the death penalty.  How would that be judged under GATT Articles XX(a) and XX(b)? 

Why Governments Bring WTO Complaints

Via Benn McGrady, here's an op-ed from trade lawyer Simon Lacey explaining his advice to the Indonesian government on whether to file a WTO complaint against Australia's plain packaging law:

A few months ago I was asked to provide a legal opinion on whether or not Indonesia should throw its hat into the ring and join the other four WTO Members (Cuba, Dominican Republic, Honduras and Ukraine) in bringing a case against Australia on the issue of plain packaging tobacco laws. I did so, and ultimately advised Indonesia that it should bring a case, not because I think the case is particularly worth fighting or because the claimants have a particularly strong chance of winning, but because I believe Indonesia needs all the practice it can get at asserting its interests at the WTO.

...

For Indonesia, this is another opportunity for it to develop and enhance its understanding of how, when, and why to use the WTO dispute settlement system to further its own export interests.  ...

...

My advice to the Trade Ministry to bring the most recent case was based on the fact that Indonesia still has some very important WTO disputes that it must fight in the near future in order to assert its national economic and development interests, the most important of which is arguably going to be a case against either the European Union, the US or both, regarding Indonesian exports of palm-oil biodiesel. In order to take on two of the biggest and most experienced practitioners of WTO dispute settlement, Indonesia needs to get as much practice as it can. The current dispute on plain-packaging tobacco offers as good an opportunity to do this as any, especially since tobacco companies will be footing the bill.

There are a number of political scientists who study various aspects of government participation in WTO disputes.  I suspect this is likely to make their heads spin a bit.

Dueling Speeches on Regulatory Trade Barriers

A couple weeks ago, I mentioned the different views of the US and EU on how the TTIP talks should deal with regulatory issues. Now we have dueling speeches by the head trade officials of each side. In a nutshell, as set out by US Trade Representative Mike Froman, the US wants the EU to modify its regulatory process to add features such as public comments on draft regulations. By contrast, as set out by EU Commissioner Karol De Gucht, the EU thinks there should be a Regulatory Cooperation Council under the TTIP, to help minimize regulatory differences (thus focusing on the outcome, not the process).

On some issues, I try to remain neutral, and just present both sides. On this one, however, I will soon be on record as favoring the cooperative approach. For the last few months, I've been working with my colleague Inu Barbee on a paper arguing for using the US-Canada Regulatory Cooperation Council as a model for how the TTIP should deal with regulatory issues. It will be published in the next issue of the JIEL (we just sent them the final version).

But in the interest of promoting a vigorous debate, anyone who supports the US view of this issue should feel free to explain in the comments why this is the better approach.

The (Almost) Final EU Tobacco Rules

We talked about the EU's proposed Tobacco Products Directive here, here, and here.  The EU measure is moving ahead, and here are some details about what they will be doing:

- The sale of cigarettes in packets of 10 is expected to be banned by 2016

- Menthol cigarettes are to be banned and health warnings covering 65% of cigarette packs will be introduced. There is to be no ban on packs of slim cigarettes. Parliament did vote to delay the menthol ban, voting that it should come into force in eight years instead of three.

- Legislators put new limits on advertising for electronic cigarettes but have so far rejected proposals for them to be regarded as medicinal products.

Presumably this will all be discussed in the TBT Committee at some point.

The Independence of the Judicial Branch of the WTO

Among the reasons I was positive about the choice of Roberto Azevedo as WTO DG was his extensive experience with the dispute settlement process in the WTO, perhaps its most important and certainly most successful function today.  I was very surprised by a recent report in an Indian newspaper that Azevedo has stated that India's food security law will place it in violation of the Agreement on Agriculture. The report is here (The Hindu, Oct. 7): bit.ly/15iDo16.  Perhaps the report is inaccurate, or the DG was merely stating that some WTO Members had raised issues about the law or that a request for consultations or a panel was immiment.Such a statement of notorious fact would of course be entirely innocuous.  What, however, would be much more serious is if, as the article literally states, Azevdo "assert[s]" that a particular measure of a particular Member "breach[es]" its obligations under a covered Agreement.  Article 23 places an obligation on WTO Members to make determinations of whether WTO rules have been violated only through resort to the DS procedures.  Granted 23 does not bind the DG, but unilateral determinations by the DG that a measure of a Member is in breach do not sit well with the spirit of 23.

I suppose that a panel or the AB could simply ignore a statement by the DG that a Member has breached its obligations.  But after the head of the WTO has already pronounced on the facts and the law, could the Member really be confident that they would get a fair trial in the dispute settlement system?

Some years ago, I was concerned when Pascal Lamy starting making interpretations of AB rulings and their applicability to other situations (part of the concern there was the wildly erroneous readings he was making).  But the actual statement that a specific measure by one Member violates a particular obligation under the DSU (without a dispute ruling)-Lamy to my knowledge never went that far.   

If the newspaper report is inaccurate, then the DG's office should demand a correction.  While I realize that for now the US would appear to be on the opposite side from India on the food security issue, the Administration should be very concerned about a precedent where the DG can go around declaring individual Members' measures illegal without, or prior to, dispute proceedings. If he were to do that in regard to US legislation, I can well imagine some difficult questions from Congress.

How Broad is a Right to Use Trademarks?

Another conversation I had in Geneva was about the Plain Packaging case and the right to use trademarks.  We've talked about this issue on this blog before.  Do trademark holders have a right to use those trademarks?  Or simply a right to prevent others from using a similar trademark that causes consumer confusion?

Let's stipulate for the moment that a right to use your trademark exists under the TRIPS Agreement.  Just how broad would that right be?  The argument by the complainants in Plain Packaging, as I understand it, is that prohibiting the use of a trademark on the product package violates that right.  But presumably you can still use the trademark around your offices (on letterhead, on the building), so it's not a total prohibition on the use of the trademark.  Neverthless, it does go quite far.

What about the situation where a government bans advertising for tobacco, which many countries do.  In effect, such a ban means you cannot use your trademark in the way that people frequently use trademarks (to get their name out to potential customers).  Its effect on trademarks is a little more indirect, but it nevertheless has an effect.  So while perhaps this would not go as far as plain packaging in restricting the use of your trademark, it is a significant intrusion (I suppose you could argue that it actually goes further).

The question then becomes somewhat less black and white.  It is not whether the TRIPS Agreement provides a right to use your trademark.  Rather, it is the extent to which the TRIPS Agreement allows interference with the use of trademarks.  What forms of interference are allowed?  Is a plain packaging requirement allowed?  Is an advertising ban allowed?  What other measures would constitute a potential concern?

Finally, for those of you interested in situations where companies lose the ability to use their trademarks, keep an eye out for a decision in this case relating to the American sports world:

The Trademark Trial and Appeal Board will hear a petition brought by a group of Native Americans who say the [Washington] Redskins should lose their federal trademark protection. They cite a law that prohibits registered names that are disparaging, scandalous, contemptuous or disreputable.

What is "Trade" in Services?

Last week, I was at the WTO public forum, talking about online higher education.  One of the themes was that putting education online makes education tradable like it never has been before.

I had been assuming that online education would fall within the GATS as trade in services, but someone raised the point that when the courses are available to users for free (as many of them are now), perhaps that is not "trade" (this suggestion was based in part on the exception for non-commercial government services).

That hadn't occurred to me before, and forced me to re-think things a bit.  Eventually, I decided that if the service is transmitted across borders or between people of different nationalities, and there is a payment of any sort somewhere along the way (e.g., if there is a textbook to purchase along with the free course), there is trade in services.

Then I thought, maybe I should check the GATS on this.  "Trade in services" is defined as the "supply of a service" between people of different nationalities/across national borders through each of the four modes.  And the "supply of a service" is defined as including "the production, distribution, marketing, sale and delivery of a service."  So it's not just sale; it's also "distribution" and "delivery" of services.

What I take from this is that there does not need to be any money involved for there to be trade in services.  Clearly, when a non-American uses Google for searches, and paid ads pop up, there is trade in services.  But I think that similar use of a purely non-commercial site would also be trade in services.

So that's what I'm going with unless someone can point to a different understanding: "Trade" in services just means transmission of services across boundaries or between citizens of different nationalities, regardless of whether the exchange has a commercial component.