International Economic Law and Policy Blog

The EU GSP+ Scheme

From the European Commission:

The European Union will continue to offer enhanced access to the EU market for vulnerable developing countries as of 1 January 2014: Armenia, Bolivia, Cape Verde, Costa Rica, Ecuador, Georgia, Mongolia, Paraguay, Pakistan and Peru. Pakistan will enter the scheme for the first time. The so-called ’GSP+’ scheme provides a strong incentive to respect core human and labour rights, the environment and good governance principle. The scheme is part of the revised GSP scheme that enters into force on 1 January 2014.

...

The GSP+ is a component of the EU Generalised Scheme of Preferences (‘GSP’) for developing countries. It offers additional trade incentives to developing countries already benefitting from GSP to implement core international conventions on human and labour rights, sustainable development and good governance. 

GSP+ is a scheme that rewards developing countries that shows a credible commitment to implementing those conventions ...

Will other countries get GSP+?

On 17 December 2013, the European Commission adopted a proposal to grant GSP+ status to three other developing countries: El Salvador, Guatemala and Panama. The proposal was been sent to the European Parliament and to the Council which have two months (this period can be extended to four months on request) to approve or reject the proposal. 

So the countries mentioned above will receive the additional tariff breaks.  Countries not mentioned will not get them.  Will the countries who do not qualify feel aggrieved enough by all this to consider filing a WTO complaint?  In this regard, note that Pakistan is in, while India is not, which led to a complaint once before.

Sanitizing COOL

A while back, I suggested that consumers don't want to see the word "slaughtered" on their packages of meat.  If that's true, it might affect the way we evaluate the COOL requirement to include information on where meat was "born, raised and slaughtered" on the label.

My local Whole Foods may be proving me right about what consumers want.  Here's a picture of the way they now label all their meat:

So, it's not "born, raised and slaughtered," but rather "born, raised and harvested."

I hadn't been aware that "harvest" was a possible word choice here, but the final USDA rule explains that it is:

This commenter as well as other commenters stated their opposition to having to use the term ‘‘slaughtered.’’ The commenters suggested alternatives to the term ‘‘slaughtered’’ that consumers may find more acceptable including ‘‘harvested’’ or ‘‘processed.’’ 

...

With respect to the suggested alternatives that may be more acceptable to consumers, the 2009 COOL regulations permit the use of the term ‘‘harvested’’ in lieu of ‘‘slaughtered.’’ As discussed previously, this flexibility will continue to be allowed under this final rule.

...

Under this final rule, the United States country of origin designation for muscle cut covered commodities is required to include location information for each of the three production steps (i.e., ‘‘Born, Raised, and Slaughtered in the United States’’). The current COOL regulations permit the term ‘‘harvested’’ to be used in lieu of ‘‘slaughtered.’’ This final rule retains that flexibility.

"Harvesting" cows?  Not something I ever heard said before.  Will this information confuse or inform consumers?  If consumers are interested in knowing where their beef was slaughtered, will the word "harvest" adequately provide that information?  And what if some packages say "born, raised and slaughtered," while some say "born, raised and harvested."  Is that confusing?

Cato Events on IP and Trade Agreements

We are going to host two trade and IP events at Cato in January.  I'll remind everyone again after the holidays, but this is just to put it on your radar now.

The first one is on the Eli Lilly NAFTA Chapter 11 case, and will be on January 16.  Here are the details:

Patents, Public Health, and International Law: The Eli Lilly NAFTA Chapter 11 Case

 

Featuring Burcu Kilic, Legal Counsel, Public Citizen Global Access to Medicine Program; Christopher Sands, Senior Fellow, Hudson Institute; and Mark Schultz, Associate Professor, Southern Illinois University School of Law, and Senior Scholar, Center for the Protection of Intellectual Property, George Mason University School of Law; moderated by Simon Lester, Trade Policy Analyst, Herbert A. Stiefel Center for Trade Policy Studies, Cato Institute.

 

In recent years, controversy has arisen over perceived conflicts between intellectual property protection and public health, and also over the role of international investment rules that allow corporations to sue governments before international tribunals. A new case combines both issues. Pharmaceutical company Eli Lilly has filed a claim before a NAFTA tribunal, alleging that Canadian court decisions in response to challenges from the Canadian generic drug industry have unfairly invalidated some of the company’s Canadian patents. Eli Lilly has asked for CDN$500 million as compensation for the damages it has suffered. This forum assembles experts with different perspectives on the case to sort through the various intellectual property, public health, and international law issues involved: Is the “promise utility” doctrine relied on by the Canadian courts credible? Is public health undermined or helped by this shift, which will favor the generic drug industry? Is it appropriate for international tribunals to play a role here? Please join us for a spirited discussion.

Register here: http://www.cato.org/events/patents-public-health-international-law-eli-lilly-nafta-chapter-11-case

There will also be one on the TPP and IP, on January 21.   

Intellectual Property in the Trans-Pacific Partnership: National Interest or Corporate Handout?

Featuring Margot Kaminski, Executive Director, Information Society Project, Yale University; Tom Giovanetti, President, Institute for Policy Innovation; and K. William Watson, Trade Policy Analyst, Herbert A. Stiefel Center for Trade Policy Studies, Cato Institute; moderated by Simon Lester, Trade Policy Analyst, Herbert A. Stiefel Center for Trade Policy Studies, Cato Institute.

Intellectual property has been a focus of U.S. trade policy for many decades, and the Trans-Pacific Partnership negotiations include an especially ambitious effort by the United States to strengthen international intellectual property laws. At the same time, however, there is serious debate within the United States over the proper scope and level of intellectual property protection. Is it in the interests of the United States to seek to harmonize intellectual property rules around the world, or is the U.S. position overly influenced by special interests hoping to export bad policy abroad and to lock it in at home? Come hear our panel of experts discuss why trade agreements cover intellectual property law, whose interests are served, and what, if anything, should be done about it.

Register for the second one here: http://www.cato.org/events/intellectual-property-trans-pacific-partnership-national-interest-or-corporate-handout

And as usual, there will be a free lunch afterwards!

Do We Really Need Fast Track?

My Cato colleague Bill Watson says no:

Many will argue that you need fast track to pass free trade agreements, but right now trade promotion authority is largely useless and unacceptably costly. Recent history with fast track shows that the obstacles to passing free trade agreements depend more on the partisan and ideological balance of Congress. Imposing Congress’s policy objectives into the negotiations at this stage won’t help get the TPP accomplished any sooner, and will surely reduce the value of the agreement as a vehicle to liberalize trade.

A clean fast track bill that reduces the role of controversial non-essential objectives in the TPP negotiations would do wonders for the U.S. trade agenda. Unfortunately, Congress seems poised to insist on making the TPP an even more "ambitious" agreement.

The president has options to get the TPP through Congress that don’t involve the risks that come with a formal grant of trade promotion authority. If he wants support for the TPP, President Obama should listen to congressional leaders, adapt his negotiating goals accordingly and then lobby Congress to pass the agreement once it’s completed.

Basically, his point is that Congress can, if it wants to, vote up or down on a completed trade deal even without fast track, so mucking up the process with fast track now doesn't really add anything.

Building on Bali; Unleashing Recognition

See the new VoxEU ebook on the future of the WTO after Bali, with a number of interesting contributions, organized by Alejandro Jara and Simon Evenett:  Building on Bali.  My own contribution discusses the possibility of addressing regulatory barriers to trade through an enhanced multilateral mechanism for recognition. 

Regulatory Cooperation in the TTIP / Regulatory Trade Barriers

The European trade negotiators are in DC this week for the 3rd round of the TTIP talks.  A little while back, I mentioned a paper on regulatory cooperation in the TTIP.  It is now out in the JIEL.  The main point is that regulatory cooperation can work, but we should keep things realistic, perhaps along the lines of the US-Canada Regulatory Cooperation Council (RCC) model.

But I wanted to mention a broader point that may be a little buried in the paper, one that we are developing further now in another paper:  What exactly does everyone mean when they talk about "regulatory trade barriers" (or "non-tariff barriers")?  These terms get thrown around all the time, without much clarity.  I see regulatory trade barriers falling into one of three categories:

-- regulatory protectionism - measures purportedly designed for other policy purposes, but with a component that is intended to favor domestic actors

-- regulatory divergence - regulatory differences across countries, arising either arbitrarily or based on different policy preferences

-- regulatory reform - issues related to improving the regulatory process or the efficiency of regulation

Are there any other ways that regulation can affect trade?  To me, these categories cover everything.  If it's not one of these three issues, I'm not sure it is a problem, and we shouldn't worry about it.

The question then becomes, if these categories work as a framework, how do we deal with each one?

More on all this at some later point, but free free to offer comments now.

From the Fringes

This is from the John Birch Society:

William F. Jasper, Senior Editor for The New American magazine, explains how President Obama's Trans-Pacific Partnership (TPP) is an "an all-out assault on our national sovereignty," and how It would unconstitutionally transfer legislative powers from the U.S. Congress, our state legislatures, and our city and county governments to multi-national corporations and unaccountable international bureaucrats at the World Trade Organization, or WTO. Incredibly, it also would transfer judicial powers from our federal and state courts — which are bad enough — to globalist TPP judges at regional tribunals and the WTO.

If you're having trouble following how the TPP will give more power to the WTO, don't worry, I am too.

More on Trade and Tobacco

This time from the NYT editorial board:

The United States is negotiating a trade agreement with 11 Pacific Rim countries right now. American officials have said they plan to include language in that pact, which could be finalized next year, to protect those nations from legal challenges by tobacco companies. Those safeguards must be ironclad and should include provisions to penalize companies that bring frivolous and harassing lawsuits. Governments around the world should add similar provisions to existing trade and investment agreements to stop the tobacco industry’s bullying of sovereign governments.

My sense is they don't really understand the nuances of what's in these agreements, and how that might affect tobacco regulation.  It will be interesting to see what happens when there is actual text, and they have to weigh in on whether that text does the job they want done.

More from the Comments: Ted Posner on Implementing Trade Facilitation in the US

From the comments on an earlier post, here's DC trade lawyer Ted Posner:

This discussion of how the United States will approve the newly concluded TFA is quite interesting. From my quick perusal of the agreement, I expect that the USG view that no congressional action is required is based on the determination that no U.S. law needs to be amended to give effect to the agreement, as Simon suggested. In other words, the USG appears to be treating this as an agreement that the President is constitutionally authorized to enter into under his sole executive power without congressional action. That certainly is not unprecedented. The United States enters into plenty of "sole executive agreements." For example, "trade and investment framework agreements" (TIFAs) are conlcuded without express congressional approval. I believe the Anti-Counterfeiting Trade Agreement was not submitted to the U.S. Congress for approval. Even the GATT 1947 did not receive express U.S. congressional approval. (It was given effect through presidential proclamation pursuant to authority given the President under the 1934 Reciprocal Trade Act.) What's odd here is that the U.S. Congress did expressly approve the WTO Agreement (see Uruguay Agreements Act sec. 101(a)), and the new TFA would appear to be an amendment to the WTO Agreement. So query whether, as a matter of U.S. constitutional law, where an international agreement was treated as a "congressional-executive" agreement when it was approved, that agreement can be amended through an agreement that is treated as a "sole executive" agreement. I am not aware of any precedent for this. I would be curious whether anyone is. As I am sure many will recall, at the time the United States Congress approved the Uruguay Round agreements and the NAFTA, there was much debate among constitutional law scholars (notably, Prof. Lawrence Tribe and Prof. Bruce Ackerman) about whether the United States could treat such agreements as "congressional-executive agreements" (as opposed to "treaties" which, under Art. II of the Constitution would require approval by a two-thirds majority in the Senate). The prevailing view appears to be that as a matter of constitutional law the United States does not need to treat such agreements as "treaties" (even if they are considered to be treaties as a matter of international law). But now we are going a step beyond that. Now the question is whether a "sole executive" agreement can amend an agreement that was approved as a "congressional-executive" agreement. I will be eager to hear what others have to say on the topic.

My guess is that we will probably muddle along for quite a while with only limited clarity about what is permitted here.  Only if some confrontation erupts at some point between the legislative and executive branches, in the trade field or elsewhere, will everyone have to sort things out.  As long as the executive confers informally with the legislature first, and doesn't push too far, it will maintain the ability to expand international law on its own through sole executive agreements, including as amendments to congressional-executive agreements.

What Does the WCO Think of the WTO Trade Facilitation Agreement?

Rather than fighting a turf battle, they seem fine with it:

The Dublin Resolution, which was issued at the conclusion of the Policy Commission meeting in Dublin, Ireland on 11 December 2013, welcomes the WTO Agreement On Trade Facilitation (the “Trade Facilitation Agreement”), as embodied in the Bali Package’s Ministerial Decision, adopted at the WTO’s Ninth Ministerial Conference in Bali, Indonesia from 3 to 7 December 2013, under the framework of the Doha Development Agenda.

The Dublin Resolution emphasises the commitment of the WCO to the efficient implementation of the Trade Facilitation Agreement.

The WCO Secretary General, Kunio Mikuriya, said that he was very pleased with the timely and affirmative action of Policy Commission, which reflects the determination to drive forward the global Customs trade facilitation agenda.

The "Trade and Tobacco" Conflict Would Be Easy To Fix

From a NY Times article today:

Tobacco companies are pushing back against a worldwide rise in antismoking laws, using a little-noticed legal strategy to delay or block regulation. The industry is warning countries that their tobacco laws violate an expanding web of trade and investment treaties, raising the prospect of costly, prolonged legal battles, health advocates and officials said.

The strategy has gained momentum in recent years as smoking rates in rich countries have fallen and tobacco companies have sought to maintain access to fast-growing markets in developing countries. Industry officials say that there are only a few cases of active litigation, and that giving a legal opinion to governments is routine for major players whose interests will be affected.

But tobacco opponents say the strategy is intimidating low- and middle-income countries from tackling one of the gravest health threats facing them: smoking. They also say the legal tactics are undermining the world’s largest global public health treaty, the W.H.O. Framework Convention on Tobacco Control, which aims to reduce smoking by encouraging limits on advertising, packaging and sale of tobacco products. More than 170 countries have signed it since it took effect in 2005.

...

Tobacco companies are objecting to laws in both developed and developing nations. Industry officials say they respect countries’ efforts to protect public health, but face difficulties promoting their brands as more countries ban cigarette ads. Often, the only space left is the packaging, and even that is shrinking, with some countries requiring that packages be plastered with shocking pictures of people with cancer; in Australia, brand names are reduced to uniform block letters on drab olive backgrounds.

It's puzzling to me that this continues to be an issue, because the conflict here would be so easy to solve.  All you need is for trade and investment rules to focus on non-discrimination as a guiding principle.  Under a non-discrimination rule, tobaco regulation would not violate trade and investment agreements as long it didn't discriminate against foreign products.  (Yes, it's a little tricky to formulate non-discrimination principles, but it can be done.)  I wrote a short Cato paper about this last year: http://www.cato.org/publications/free-trade-bulletin/free-trade-tobacco-thank-you-not-smoking-foreign-cigarettes

So why don't we just change the rules to reflect this?  I'm not sure.  On one side, for reasons I can't figure out, some tobacco opponents seem to think tariffs on imported cigarettes are a good idea.  But as I've said before, I don't see how protecting the domestic tobacco industry from competition helps public health.  And on the other side, legal principles such as "fair and equitable treatment" mean that just about any government regulation a company doesn't like could be subject to international litigation.  But people seem very attached to these rules, for whatever reason.

Anyway, the problem would be easy to fix, and it seemed worth noting this, although I've said the same thing already, so I don't have much hope that this blog post will have an impact on the debate!

ADDED:  Of course, when I say "easy to fix," I mean in the technical, legal sense, not in the political sense!

Question from the Comments about the New Trade Facilitation Agreement

Because it's difficult for readers to follow the comments section, I wanted to elevate this question from the comments to a post:

Perhaps one of the lawyers at this blog, would elucidate what seems a tricky one: The TF involves in effect amendments or changes to, among others, rights and obligations of Members, under three articles of the GATT 1994, and the rights of an importing country under the Pre-Shipment Agreement (whose objective is to help customs authorities, to prevent fraudulent disclosures at the point of customs import, something that the exporters don't like. However, rather than presenting to Members specific amendment to each of the provisions of GATT 1994, and pre-shipment inspection agreement, and have each of it ratified or accepted by two-thirds majority of membership, the Bali decision requires the TF as such to be presented to Members for acceptance or approval to be made a part of Annex 1A of the Marrakesh Treaty. How valid would such a procedure be under public international law? And what would it mean in terms of rights and obligations, taking note of the over-riding interpretative note to Annex IA (page 20 of legal texts). In the Indonesia car dispute case (which did not go to the AB, since the IMF loan conditionality to the Suharto govt, required that government to implement that panel ruling and not go in Appeal (some rule of law indeed!), the panel disregarded the interpretative note on Indonesia's Rights under GATT 1994, and its obligations under TRIMS. Under the interpretative note, the GATT rights should have prevailed over any obligations of TRIMS. Will that precedent be repeated in any future dispute under TFA.

Todd Tucker's Proposals for Investor-State Reform

This is from Todd Tucker, formerly of Global Trade Watch and now doing a PhD at Cambridge University:

Right now, investment treaty arbitration is making few people happy. Investors take years to launch and litigate them, and, best case scenario, they get payment – usually far less than what they asked for. Governments are certainly not happy: even having one of the cases brings their reputation into question, not to mention considerable financial resources to defend themselves and pay out.

So, and I am just spitballing here, instead of a 42-page, 13,975-word Model Bilateral Investment Treaty (as the US currently uses), how about the following roughly 250 words (or about 10 tweets):

• “When an investor has a problem with a government action or policy, it has a right to ask a panel of independent arbitrators to help mediate the dispute.
• The arbitrators will present information to both parties about mutually advantageous current and potential benefits of their partnership.
• If mediation fails after three months, the panel of arbitrators will issue an award within three months recommending the government to engage in supervised bilateral negotiations, compensation or policy changes, or recommending that investors drop their complaint and return to normal relations with the host government. Arbitrators must adjust these recommendations to take into account governments’ obligations to regulate without excessive transaction costs above any normal domestic legal procedure.
• Either the government or investor can appeal the arbitrators’ recommendation to a standing body of international civil servant arbitrators, with mixed expertise in commercial, administrative and international law. (The arbitrators in this standing body will serve for ten year terms and be selected by a vote of not less than three-fourths of the government signatories to the Washington Convention.)
• If the appellate body finds that the lower panel’s award does not comport with the requirements herein, it may modify the award, or issue a new one that does within three months.
• Governments will implement these final recommendations within three months to the satisfaction of the lower panel (and if relevant, the appellate body of arbitrators), or the panel will issue a cash award to the investor redeemable under the procedures of the Convention.”

The nice thing about this for the investors is that it allows them to bring up a dispute over ANYTHING, not just the kinds of problems that are covered by the (admittedly already malleable) standards like fair and equitable treatment. The nice thing about this for governments is that any recommendation from the arbitrators requires a recommendation that MUST be adjusted to take into account their policy prerogatives, or can be appealed to a group of appellate arbitrators controlled by states. But, again, another nice thing for investors is that they will get something within a year, even if that something is just finality and a recommendation to play nice with the host government. (Contrast this with 2-10 years under the current investment treaty system, before you end up with a cash award you can take to courts.)

Would this new approach make either side happy?

The New Dispute Settlement Report Formatting

Apologies for this rant, but the new format for heading numbering in WTO dispute settlement reports is getting to me.  Here's the problem, taking the EC - Seal Products panel report as an example.  Let's say you are on p. 144, and you come to this heading:

7.3.3.3.4.5 Overall assessment of the reasonable availability of an alternative measure, taking account of risks of non-fulfilment would create

When you look at this heading alone, it's really hard to figure out where you are in the report. That's six numerical sub-headings, separated by periods!

You might scroll up a bit, to get your bearings, and on p. 139 you get to this:

7.3.3.3.4.4 Reasonable availability of the alternative measure

That's not much help, so you keep going until you see a higher level heading, like this one on p. 134:

7.3.3.3.3 Risks non-fulfilment of the objective would create

It's not until you get to p. 125 that you get a good sense of where you are:

7.3.3.3 Whether the EU Seal Regime is more trade restrictive than necessary to fulfil a legitimate objective, taking account of the risks non-fulfilment would create

And it's on p. 109 where the section starts, with this:

7.3.3 Article 2.2

Yes, there is a table of contents to guide you a bit, but at least in this report, it only goes to 5 levels, not the 6 that are actually used.  Anyway, I find the whole approach very hard to follow.  I would have thought that using the more traditional I.A.1. etc. would be easier.

And while I'm at it, a friend of mine has complained about the new font:

Do you know anything about the decision to start issuing panel and AB reports in Verdana?  Now I realize this is partly a matter of taste, but I do believe that there is some scientific evidence to suggest that large passages of text are harder to read in sans-serif typefaces.  (Just ask yourself this – when was the last time you read a book set in a sans-serif typeface?) 

I feel less strongly about this one, although it does throw me off a little to read Verdana. 

What if the Supreme Court Abolishes Software Patents?

From Tim Lee of the Washington Post:

In a trio of Supreme Court decisions between 1972 and 1981, the court held that mathematical algorithms were not eligible for patent protection. Since computer software is little more than mathematical algorithms encoded in machine-readable form, most of the software industry assumed this meant you couldn't patent software. But then, in the 1990s, a patent-friendly appeals court handed down a series of decisions that opened the door to patents on software. That triggered a wave of patenting that has drowned the technology industry in litigation.

In principle, the Supreme Court's old precedents ruling out patents on mathematical algorithms are still good law. And today, the Supreme Court announced that it would hear an appeal that, for the first time in 30 years, will directly address the patentability of software.

The case focuses on four financial software patents. The patents claim a method of "mitigating settlement risk" using electronic "shadow credit records." The trial court judge ruled that this "invention" isn't patentable because it is "directed to an abstract idea of employing an intermediary to facilitate simultaneous exchange of obligations in order to minimize risk." When the case was appealed to the United States Court of Appeals for the Federal Circuit, the court with jurisdiction over all patent appeals, the court deadlocked 5 to 5. That left the lower court's ruling in place.

Now the Supreme Court will have an opportunity to weigh in on the case. And while the high court could issue a narrow ruling based on the details of the patents in this case, it could also take the opportunity to fix the software patent mess more broadly. All it would need to do is to reiterate its earlier position that patents claiming mathematical processes — a.k.a. computer software — isn't eligible for patent protection unless it's tied to a specific machine or physical process.

The high court will be reluctant to do this because it would be disruptive. Reiterating that mathematical algorithms can't be patented would call into question thousands of patents held by major software companies. And these companies could complain, with some justification, that the Supreme Court's failure to rule on the issue for more than 30 years was a tacit acceptance of rulings by the Federal Circuit.

Let's say the Supreme Court does take away some or all software patents.  What, if anything, does the TRIPS Agreement say about protecting software patents?  Are they any countries who are likely to make a WTO claim about this?  And are there any non-U.S. companies with U.S. software patents that, having had their patents taken away, might make investor-state claims under one of the various investment treaties or investment chapters of trade agreements?

More TPP Leaks

Here's a fascinating, if somewhat confusing, leaked document related to the TPP: http://big.assets.huffingtonpost.com/1296_001.pdf It purports to be a breakdown of country negotiating positions on all the TPP issues.  But what are all these issues?  What is the "organics annex" of the TBT Chapter? What is the "land expropriation" annex of the investment chapter?  What is the "necessity test" issue in the services chapter?  What are all the climate change issues they appear to be talking about?  What is the part about "nullifying and opposing [geographical indications] recognized in other treaties"?

At some point, the TPP texts will be released, at which time we're all going to have a lot to talk about!

Energy Charter Secretariat Job

 The Energy Charter Secretariat invites applications for the position of Trade Expert.

The Expert will deal with energy trade falling under the scope of the Energy Charter Treaty and its Trade Amendment as well as the trade-related policy recommendations of the Energy Charter Conference. In particular, The Expert will work on trade-related aspects of low carbon, technology transfer involving energy efficiency, and of renewable energy resources development.

The successful candidate is expected to be familiar with:

• Multilateral trade law, especially WTO agreements, and its relationship with other public law areas such as the UN Convention on the Law of the Sea and multilateral environmental agreements (UNFCCC);
• Global energy policy matters and related international, regional and national aspects;
• Economic and regulatory aspects of national and global energy markets;
• Matters characterising transition and emerging economies;
• Work of international conferences and organisations.

Oral and written communication skills will include an excellent knowledge of English with proven drafting ability. The capacity to work in a multinational environment, together with the ability to be a good team player, is important. Knowledge of other languages, particularly Russian, would be an asset.

This post (at level A2/3 on the Coordinated Organisations scale), with an attractive, international remuneration package, will be offered on the basis of a three-year, fixed-term contract with the possibility of renewal. The Energy Charter Secretariat is an equal opportunities employer. Candidates must be nationals of a signatory country.
  

Applications should be sent together with a comprehensive CV and received no later than 18 January 2014 by:

Head of Administration and Finance
Energy Charter Secretariat
56 Boulevard de la Woluwe
1200 Brussels
Belgium

http://www.encharter.org/index.php?id=44&L=0L%C2%A1%C2%AFid%C2%A8%C2%A6e#

3rd Conference of the Postgraduate and Early Professionals/Academics Network of the Society of International Economic Law

São Paulo (Brazil), 24 - 25 April 2014

Organised by PEPA/SIEL in cooperation with DIREITO GV – São Paulo Law School

SIEL’s Postgraduate and Early Professional/Academics Network (PEPA/SIEL) is, among other things, interested in fostering collaboration and mentoring opportunities for emerging academics and professionals in IEL. PEPA/SIEL fulfils these goals through various activities such as organising conferences at which emerging IEL academics and professionals can present and discuss their research in a supportive and welcoming environment. 

We are pleased to announce that the third conference will take place on Thursday 24 and Friday 25 April 2014 in São Paulo (Brazil).

Call for Papers

This conference offers postgraduate students (students enrolled in Masters or PhD programmes) and early professionals/academics (generally within five years of graduating) studying or working in the field of IEL an opportunity to present and discuss their research. It also provides a critical platform where participants can test their ideas about broader issues relating to IEL. One or more senior practitioners or academics will comment on each paper after its presentation, followed by a general discussion.

We invite submissions on any IEL topic including, but not limited to:

Trade, investment and monetary/financial policies;

The interaction of international trade law, investment law and competition law with other branches of law governing intellectual property, human rights, environment and sustainable development;

Bilateral and regional economic integration and the multilateral trading system;
Comparative economic law, focussing on how international economic law interacts with laws, institutions and actors at the domestic level;

Law and practice in international economic governance and international organizations; and,

Philosophy, sociology, politics and economics of international economic law.

How and when to submit

Submissions should include a CV and a research abstract (no more than 400 words) and be sent no later than 12 January 2014 to [email protected] Papers will be selected based on a double blind review conducted by a senior practitioner or academic and a conference organiser. Successful applicants will be notified by 31 January 2014, after which they are expected to submit a conference paper (no more than 4000 words) by 31 March 2014. Papers will be made available online via the SIEL website (www.sielnet.org).

General practical information about participating and attending the Conference

The deadline for registration is 17 February 2014. Registration has to be done online at the SIEL website (the registration page will be available shortly). Registration costs 45 GBP for non-SIEL Members, and 35 GBP for SIEL Members. SIEL Membership details may be found at the SIEL website (student membership is 5 GBP). The Registration fee covers conference materials and coffee breaks on both days.

Cancellations of participation must be made in writing to [email protected] The deadline for cancellation is 6 April 2014. The registration fee minus an administrative fee of 10 GBP and any incurring bank fees will be refunded if the cancellation is done before or on the given date. Later cancellations will not be refunded.

A limited number of conference fee waivers is available for applicants facing financial hardship. Applicants for a conference fee waiver are kindly invited to add a short letter of no more than 3 paragraphs to their conference application, stating the reason for their waiver request. Successful applicants will be notified by 30 January 2014.

Subject to space availability, registration of participants not presenting a paper will be accepted. The regular fee will be applied. Please contact [email protected]

If you should have any (further) questions regarding participation, please feel free to contact [email protected]

Organisers

Conference Co-Chairs: Michelle Ratton Sanchez Badin, Vera Thorstensen, Freya Baetens and José Caiado

The Bali Deal is Done. So What Exactly is "Trade Facilitation"?

As Sungjoon just mentioned, after many long days and nights, hard-working trade officials got a deal done in Bali.  Congrats to all of them, and I hope they get to take a long vacation now. (I noticed in my facebook feed that some other folks hanging out in Bali had it a little easier, and were lounging by the pool or on the beach -- you know who you are!)

Now that there is an agreement, and various new legal obligations that will come into force (at some point -- it's a complex process), I feel obligated to look into some of the details that I had been trying to avoid.  "Trade facilitation" in particular was something that I just couldn't face.  It is described here as follows:  "The trade facilitation decision is a multilateral deal to simplify customs procedures by reducing costs and improving their speed and efficiency."  No doubt this will very useful (even if the "$1 trillion" in new trade estimates are exaggerated), but it sounds a little dull.  However, if it's going to a real agreement soon, I guess I need to look at it.

The draft version is here.  (There may be some minor "scrubbing" that takes place, but it should end up about like this.)  In skimming through it, what struck me was that much of it looks like kind of a "good governance" agreement for customs procedures.  Basically, it is a requirement that every government run an efficent, transparent and fair customs process.  Some examples:

-- governments must promptly publish import procedures, duty rates, and classification/valuation rules

-- governments shall issue advance customs ruling where requested

-- governments shall provide for administrative/judicial review of customs rulings

All of these items are, I would say, mundane but useful, and should help trade flow a bit more easily.  Beyond these governance issues, there are also rules to help speed up the flow of goods across borders:

-- governments shall have procedures for expedited shipments of certain goods

-- governments shall establish procedures for pre-arrival processing

-- and "authorized operators" can move goods through customs faster

Here's one thing that struck me about all of this.  Don't most developed country governments already meet these requirements?  Will the U.S., EU, Japan, etc. even have to do anything to implement this?  I'm always suspicious of international agreements, in the trade law context and outside of it, where some parties don't have to take any actions at all.  And here, it seems like there was resistance to new obligations that might require developed countries to take on additional obligations, as noted by Inside U.S. Trade:

The U.S. also successfully fended off demands by other developed countries to create a binding obligation for WTO members to provide a "single window" under which all required documentation for import or export be submitted through a single entry point. The U.S. does not have such a system, and obtained "best endeavor" language on this obligation in the trade facilitation deal.

Related to this, I've been wondering what the U.S. might have to do, if anything, in its domestic political process to affirm this new, binding agreement.  Is this part of the Trade Promotion Authority debate?  I had been assuming it was not, because nobody ever talked about what might need to be done domestically in relation to Bali, but I wasn't really sure why it was not.  If the U.S. is taking on new trade obligations, doesn't Congress have to sign off on it?  I gather that this agreement will be put into effect in the WTO system via an amendment to the WTO Agreement.  But that can't be a reason to avoid Congressional approval.  Surely you couldn't just amend the WTO Agreement to prohibit anti-dumping without such approval.

Then I saw this in Inside U.S. Trade:

At the press conference, Punke said the Obama administration does not believe the deal requires congressional approval. "Our analysis of the trade facilitation agreement is it can be effectuated through administrative means and would not require legislation to put it into force," he said. The obligations of the trade facilitation agreement are enforceable under the WTO Dispute Settlement Understanding.

So the administration's view is that Congress need not weign in.  But why is that?  Is it because the agreement, as noted, doesn't require the U.S. government to change anything about domestic law (or at least, it doesn't require Congress to take action in this regard)?  That's my guess, but those who know more should feel free to explain this in the comments.  Are there any limits to when the WTO Agreement can be amended without Congress having to sign off, as long as no U.S. legislative change is needed?  To take one (obsure) example:  Could the U.S. agree to an amendment to get rid of the non-violation remedy without Congressional approval?

One final point.  Making all these adjustments will cost developing countries a lot of money.  How will they achieve it all?  The agreement says this:

Assistance and support for capacity building16 should be provided to help developing and least-developed country Members implement the provisions of this agreement, in accordance with their nature and scope.

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16 For the purposes of this Agreement, "assistance and support for capacity building" may take the form of technical, financial, or any other mutually agreed form of assistance provided.

I take that to mean there will be developed country government money and resources being thrown around to help with assisting developing country governments in the transition.  For those who specialize in these sorts of government contracts, this may mean some new business.

“It Always Seems Impossible, Until It’s Done”: Some Post-Bali Reflections

Finally, a happy ending!  The Bali package has been delivered after a couple of serious last-minute hiccups, such as here and here.  Concededly, the Bali package is subject to the typical half-full/half-empty evaluation.  True, the Bali Ministerial Conference was originally designed to be sort of “rescue exercise” even at the outset.  Still, one would not like to harbor any thought of the opposite outcome.  Now, all eyes are on the “work program,” which is likely to be issued within the next couple of months.  

 In retrospect, most, if not all, pundits were quite pessimistic about this outcome.  That pessimism would make sense from the typical realist perspective.  For example, India has a big election next year and would not like to be boxed in; the United States has no fast track authority etc.  But, here is my own theory. 

 Everyone, including India and the United States, did not want to lose the Trade Facilitation Agreement.  Even politicians now appear to have realized that the “global value chains” (GVCs) are here to stay.  Trade facilitation is special because this makes world trade look more like a big communal project, rather than a mere bargain.  The moment we recognize the (potential) value of trade facilitation, we tend to admit, albeit implicitly, that the world trade system could be a “community,” rather than a mere contractarian arrangement made up of haggling.  This new perspective merits even more considering the very nature of the WTO’s future homework, such as food security and non-tariff barriers.  World trade need not be a sport competition of winners or losers.  Everybody can win if the winners’ circle is adequately widened.  Trade facilitation is expected to widen that circle, say to the extent of $1 trillion by one calculation!  Likewise, trade facilitation is vital to “development.”

 In a sense, WTO delegates in Bali could deliver the deal only by stopping bargaining.  Of course, some (the half-empty people) might say that they just kicked the can down the road.  But, the truth is that they have failed even to do so for the past twelve years!  Here, my theory is that WTO members now subscribe to the fact that the old bargaining era dictated by an instant quid pro quo mentality might not always work.  Now, more than ever the future of the WTO seems to hinge not on episodic, big time bargains but more on workman-like, diurnal dialogue that could widen shared grounds among members.  After all, the remaining hardest nuts to crack ahead might not be necessarily amenable to the traditional give-and-take calculation.

 In this regard, socialization among WTO members has become increasingly important, not only among (professional) delegates of WTO members but also between the WTO and other international organizations, such as the UN Food and Agriculture Organization (FAO), in case of food security, and the World Customs Organization (WCO), in case of trade facilitation.

 The crown jewel of the Bali package (trade facilitation) is certainly good news to export-oriented economies.  Note that the recent drive for regional FTAs, or mega-FTAs, gained political traction due to the bleak prognosis of the Bali meeting.  So, one might reasonably speculate that multilateralism will be now back to the center stage.  WTO members will face a good deal of follow-up meetings and discussions, details of which will be revealed in the soon-to-be-announced “work program.”  Those inevitable multilateral commitments might take some oxygen out of the hitherto regionalist zeal.  In fact, some countries that have not signed many regional trade deals especially hailed the Bali breakthrough.

 For now, let us bask in a big relief.

 [Coda]

Perhaps, the Bali package might be the last gift from Nelson Mandela on earth.  Big speeches in Bali all competed to quote him: “It always seems impossible, until it’s done.”  R.I.P Madiba…

International Law as Factual Evidence in WTO Disputes

From the EC - Seal Products panel report: 

7.292. The European Union points out that the protection of the economic and social interests of Inuit or indigenous communities is recognized at the international level as illustrated, for example, in the United Nations Declaration on the Rights of Indigenous Peoples (UN Declaration) and in the ILO Convention concerning Indigenous and Tribal Peoples in Independent Countries (ILO Convention).

...

7.295. In our view, these sources, taken in their entirety as factual evidence475, ...

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475 In taking into account the recognition given by international instruments in the context of the United Nations and the ILO to the interests of Inuit and indigenous communities, the Panel is mindful that these instruments are not WTO instruments and they do not set out WTO obligations per se. We are considering the content of these instruments as part of the evidence submitted by the European Union to support its position concerning the interests of Inuit and indigenous communities, not as legal obligations of Members.

There are a number of aspects of the role of international law in WTO dispute settlement that are controversial, but the panel's statements here seem sensible to me: International legal instruments can be used as factual evidence in the context of applying specific WTO legal provisions.

Australia Concedes a Bit on Investor State

From the Guardian:

Australia has finished negotiations for a free trade agreement with South Korea, paving the way to reduce and scrap tariffs on key exports, the prime minister says.

The proposed deal includes a controversial investor-state dispute settlement mechanism – but the government says it has secured safeguards to ensure Australia’s public welfare, health and environmental laws are not undermined.

Labor and the Greens have already flagged their concern over this aspect of the agreement, urging the government to release the full wording as soon as possible.

...

Critics had been worried about the inclusion of an investor-state dispute settlement mechanism, allowing overseas businesses to take action against Australia for apparent breaches.

The government says the agreement does include such a mechanism, but has “ensured the inclusion of appropriate carve-outs and safeguards in important areas such as public welfare, health and the environment”.

“This will provide new protections for Australian investors in Korea as well as Korean investors in Australia, promoting investor confidence and certainty in both countries,” it says.

The fact sheet is here: http://www.dfat.gov.au/fta/akfta/fact-sheet-key-outcomes.html  Hard to know what to make of the "carve-outs" until we see the actual text.

Couldn’t We Just Deliver the Original Doha-Lite Package?

The longest trade round ever is now facing its Hamletian moment.  The hard-won optimism under the new WTO leadership has recently evaporated as a thorny issue of food security remains contested.  To most observers of the Doha round, the current stalemate is a frustrating déjà vu.  We were in this last-minute, tormenting situation back in Cancún in 2003 and in Geneva in 2008.  There and then, we all failed in the last bargain.  Now, another last bargain is before us.  Paradoxical as it may sound, we can skip this last bargain and just deliver what has already been on the table.

 First of all, we must embrace what has been long forgotten: the WTO is far more than a deal.  True, trade negotiations could be at the mercy of precarious domestic politics of major countries.  From this realist perspective, any trade deal cannot but be elusive.  Unfortunately, most WTO members, one way or another, are still reeling from the fallout of the financial crisis.  Currently, their domestic political situations are not necessarily pro-trade.  On top of this, India is facing a big election next year as it needs to shore up its food security law that might be inconsistent with the current WTO subsidy rules.  The U.S. government is without a procedural silver bullet, a.k.a. the trade promotion authority, and is not likely to get one soon. 

 But isn’t this exactly why we created the WTO, and its predecessor the GATT in the first place?  After experiencing the ultimate outcome of Realpolitik, i.e., economic balkanization, in a flash of collective enlightenment, trading nations decided to lash their treacherous political hands against the mast of global ideas and principles.  Yes, we still negotiate under the WTO, yet at the same time the WTO is not a mere sum of bargains.  It is a “community” built upon those ideas and principles.

 To break the current deadlock, WTO members should modify a tacit commitment to the bargaining model of world trade.  We all should step back from the taken-for-granted mercantilist attitude, and become agnostic about export volume, and elections, for now.  Trade is not a game of winning or losing.  A country might not always need to outsmart its trading partner to get a better deal.  Instead, trade can, and should, be regarded a communal project from which every economic player involved, not only exporters and importers but also retailers, wholesalers, shippers, forwarders, warehouse owners, insurers, bankers, and consumers, can benefit on its own term.

 Think of two big ticket items that now appear most deliverable in Bali: trade facilitation and duty-free/quarter-free access (DFQF) for the LDCs.  Are they within reach because we negotiated well on them?  Or are these topics relatively easier to negotiate than other tougher issues?  Maybe, but the real answer comes from a diametrically opposite direction.  These topics were deliverable largely because they are not necessarily captured by the conventional bargaining structure.  They were deliverable mostly because WTO members did share some common values underlying them, such as market integration, development, etc.  These two items should comprise the Bali package.

 Bali might not be a good place for food security, which does not remain solely an Indian problem.  It is a global challenge that requires a global response.  It touches on many grave issues such as the green light subsidy, commodity inflation, and rural livelihood.  To even begin an earnest discussion on these serious issues, we need extra time and energy not only from the WTO members but also other related international organizations, such as the United Nations.  It is a bigger and more complicated project than could be fudged through within a few days in Bali.  By soul-searching discussions and deliberations, WTO members should expand what can be shared in this highly controversial topic.  Until that moment, we should not attempt to bargain on it. 

 Bali need not be a final destination for the WTO.  Let us deliver what is on the table and move on.  Note that both trade facilitation and enhanced market access for the LDCs will be a powerful engine for development, which speaks to the gestalt of the “Doha Development Agenda.”  There will be tomorrow for unfinished trade businesses.  We can stop haggling in Bali and save the Doha round.  

BP and the TTIP

From the Washington Post:

The British government has taken the unusual step of filing a brief in a Texas federal court in support of BP in its quest to get the Environmental Protection Agency to lift a ban on the British oil firm’s ability to bid for federal contracts, including leases on new offshore drilling prospects in the Gulf of Mexico.

“It is the view of Her Majesty’s Government that EPA’s disqualification and suspension of multiple BP entities may have been excessive,” the government said in its amicus brief filed with the U.S. District Court for the Southern District of Texas. Given BP’s efforts to settle oil spill claims, the British government said that the EPA’s prohibition, “if upheld, could undermine the corporate culture of responsibility all responsible governments have sought to foster.”

The brief, filed late Monday night, is an open sign of tension that has been quietly escalating between the U.S. and British governments over the punishment for the huge oil spill triggered by a blowout on BP’s Macondo well in the Gulf of Mexico. Eleven people died in the fire that broke out on the Deepwater Horizon drilling rig on April 20, 2010.

 

...

 

Three and a half years after the spill, and after tens of billions of dollars in payments by BP, the British oil giant is still fighting legal battles over Clean Water Act fines and settlements with individuals and businesses in the gulf region.

 

Unlike the financial settlements over the spill, the EPA’s suspension of BP from federal contracting impairs the ability of the company to invest and expand in the United States.

 

BP is one of the largest foreign investors in the United States, and in 2012 was the top oil and gas producer and deep-water lease holder in the Gulf of Mexico. It says it has invested $55 billion in the United States in the past five years and plans to invest “at least” $4 billion a year in Gulf of Mexico exploration in the next decade. It now has nine rigs operating in the gulf.

So here's a situation where the UK is espousing BP's claim on a matter related to foreign investment.  If the TTIP comes into effect with the usual investor-state provisions, BP could espouse its own claim directly.  (The arguments quoted certainly sound like FET-type claims).  Would that relieve any U.S./UK tensions on the matter?  Would it lead to a different kind of tension, as BP would be challenging U.S. environmental regulation before an international tribunal?

The Bali Ministerial [Failed/Succeeded]: Yawn

I don't know what's going to happen at the Bali Ministerial this week. I'm not very good at predicting these things.  But whatever happens, I probably won't be all that excited one way or the other.  That's because the issues they are talking about are, in my view, relatively unimportant. The major topics at Bali have little to do with putting constraints on economic nationalism and protectionism, which, to me, is the core of the world trading system.

That's not to say Bali is irrelevant. Trade facilitation is a good idea. But it just seems like common sense, rather than a major reform.

And a big part of the Bali agriculture talks is about making room for more subsidies.  But aren't trade talks supposed to reduce subsidies?

I would be a lot more enthusiastic about all of this if there were some big trade liberalization proposals on the table.  But there aren't, and unless some of the major trading countries decide to make these proposals, there won't be any time soon.

So what I would like to see?  Here are two examples.

First, the Economist recently noted that:  "A post-Bali agenda would almost certainly include a binding schedule for elimination of rich-country farm subsidies".  That would be a great agenda, one that would get me excited.  But why is that a "post-Bali" agenda?  Why not put that on the agenda now?  Along the same lines, my friend Simon Lacey says something similar:

Ultimately, the WTO will have to again turn to hosting real negotiations on the tough political economy trade-offs required to dismantle the entrenched agricultural welfare states that have been allowed to establish themselves in places like the EU, the US, Japan and Korea over many decades. But for now we are talking about lighter issues under the heading of trade facilitation.

Exactly.  And it's worth noting in this regard that while many people tout the TPP, TTIP and other regional talks as the way forward, my understanding is that these negotiations don't deal with agriculture subsidies either (and that may actually be a big part of why the U.S. and EU are pursuing the regional approach, so they don't have to talk about these subsidies).  

Second, how about dealing with anti-dumping?  Here's a suggestion from Sweden's National Board of Trade:

The replacement of anti-dumping measures with competition rules in regional trade agreements, if successful, may ultimately be regarded as a stepping stone and an example to follow at the multilateral level. ‘Unfair competition’ should be addressed by efficient competition rules rather than by the use of anti-dumping measures.

Obviously, replacing anti-dumping measures would be a radical -- albeit sensible -- proposal.  But isn't there room for a little bit of reform here?  There are so many things about anti-dumping that are problematic. Can't we agree on doing something?  As with agriculture subsidies, the TPP and TTIP ignore these issues as well.

The news focus around Bali seems to be whether the WTO can achieve a "deal."  But the content of any deal is more important than whether there is a deal.  Unless we put the big issues on the table, the whole enterprise doesn't inspire me all that much.  Whether these and other big issues are addressed depends on whether the economic powers of the world decide to take trade liberalization seriously.  I haven't seen many indications in recent years that they do, but I wish they would.  Politically, it would be challenging; but in terms of economics, it would really help.