International Economic Law and Policy Blog

Nit-Picky Comment on India - Agricultural Products

This is from the recent panel report in India - Agricultural Products:

7.791. In its panel request, the United States claimed that India acted inconsistently with Annex B(5)(a) to (5)(d) because it failed to, inter alia, identify the parts of its AI measures which, in substance, deviate from international standards, guidelines or recommendations. We note, however, that the United States has not submitted any arguments on its claim under Annex B(5)(c) in any of its written or oral submissions. When asked by the Panel whether it was pursuing this claim, the United States responded that it has not separately articulated a breach by India of Annex B(5)(c) in its submissions because India's breaches of Annex B(5)(a) and (b) left the United States unaware of India's AI measures until they became final, thereby preventing the United States from requesting copies of them when they remained in non-final form. ...

7.792. In the absence of argumentation, the Panel concludes that the United States failed to make a prima facie case of violation of Annex B(5)(c) by India. Accordingly, the Panel declines to make a finding with respect to the United States' claim pursuant to Annex B(5)(c).

The panel says the U.S. did not make a prima facie case on the claim under Annex B(5)(c); therefore, the panel "declines to make a finding" with respect to the claim.  But isn't a conclusion that the U.S. failed to make a prima facie case a finding?  It's not a finding of violation, or a finding that the measure is definitively not in violation, but it sill seems like a finding to me.

The Role of the EU and the Member States in Trade Policy

From the European Commission:

The Commission decided today to request an opinion of the EU Court of Justice on the competence to sign and ratify a trade agreement with Singapore.

Commissioner De Gucht said: 'I have been saying for months that we need to clarify the interpretation of the Lisbon Treaty as regards trade matters. And this is what I have decided to do now. The Court can solve an ongoing difference of opinion between the Commission and the Council on the interpretation of the Lisbon Treaty, clarify which procedures to follow and increase EU predictability towards our trade partners.'

The aim of the Commission is to bring clarity which provisions of the Free Trade Agreement with Singapore fall within the EU's exclusive or shared competence and which remain in the Member States' remit and require approval by national instances.

As next steps, the Commission's Legal Service will prepare a formal request to the Court with the intention to submit as soon as possible.

Background

The European Union and Singapore have concluded their talks on protection of investment on 17 October 2014. This completed the negotiations for the EU-Singapore Free Trade Agreement, after its other parts were initialled already in September 2013.

The request for a Court of Justice opinion concerns the specific agreement with Singapore. Every trade agreement has its specific characteristics. In case of the EU-US trade talks, for instance there will most likely be a number of elements that will require ratification by national parliaments.

Any EU lawyers out there willing to make predictions on how this will turn out?

ADDED: I changed the title of the post to make it reflect the post a little better.

Trade Law Case Notes

From the Leuven Centre for Global Governance Studies and Oxford University Press:

Dear colleagues,

We are writing to invite you to join an exciting new project undertaken by the Leuven Centre for Global Governance Studies and Oxford University Press.

The Oxford Reports on International Law (ORIL) brings together decisions on public international law from international law courts, domestic courts, and ad hoc tribunals, and is the most up-to-date source of international case law available. See http://opil.ouplaw.com/home/oril. We are in the process of creating a new module for the ORIL provisionally entitled Reports on International Trade Law Decisions.  This is the first database to provide expert commentary and analysis of case law of trade-related international dispute settlement systems, focusing on issues relating to public international law. In first instance, the database covers cases decided by, inter alia, the WTO’s Dispute Settlement Body (Panels and the Appellate Body), NAFTA and the Caribbean Court of Justice. So far, over 60 cases have been commissioned to contributors. Decisions of other tribunals, such as those of ASEAN, MERCOSUR and EFTA, are equally targeted. The development of the new module is led by the Leuven Centre for Global Governance Studies at the University of Leuven, under the supervision of Prof. Dr. Jan Wouters and Prof. Dr. Geert Van Calster.

We are currently looking for contributors that are experts in the fields of public international law, WTO law, and international trade law who would like to take part in the project. Contributors are asked to draft short case notes (around 1.000 words) on judgments from the abovementioned tribunals, insofar they are significant for public international law. You will of course be credited as the sole author, and each case note will be published in the Oxford Reports on International Law – Reports on International Trade Law Decisions module, to be launched by March 2015. Moreover, you may use case notes as the basis for a subsequent publication provided it is not identical (in which case consent from OUP would need to be asked), and due reference is made to the earlier OUP case note. Additionally, authors of case notes are to be compensated 45 EUR per note from Oxford University Press. In our experience, a case note takes around 2 days’ work.

If you are interested in becoming a contributor and are willing to contribute to this exciting project, please send us a short description of your background and experience, insofar relevant. If you have specific interests or expertise relevant to the project, feel free to suggest to author specific case notes. Please do keep in mind that many WTO cases have already been commissioned for head notes and may no longer be available. Considering the broad scope of this project, feel free to forward this invitation to equally qualified colleagues who may be interested to submit case notes.

Thank you in advance and we are at your disposal should you have additional queries. Please mail to [email protected]

Yours sincerely,

Prof. Dr. Jan Wouters and Prof. Dr. Geert Van Calster, Editors

Dylan Geraets and Bregt Natens, Associate Editors

WTO Legal Jobs Available

As you may have heard, WTO dispute settlement is getting pretty busy these days, which explains why the WTO Secretariat is looking for lawyers to work on these cases:

-- Grade 9 lawyers (at least 8 years experience) 

-- Grade 7 lawyers (at least 3 years experience)

There are positions in Rules, Legal Affairs and the Appellate Body.

Good luck!

Who Should Be Able To Sue a Government in an International Tribunal?

As this blog's readers all know, under most investment treaties and investment chapters of trade agreements, foreign investors can sue a host government directly in an international tribunal, based on various obligations imposed on the government (fair and equitable treatment, etc.).

For those who support this system, I'm interested in hearing your views on something:  

-- Should the ability to sue a government in an international tribunal be available only to foreign investors?

-- Or, in the alternative, should the ability to sue a government in an international tribunal be available more generally, to domestic investors as well as foreign investors, and even to non-investors, i.e., ordinary citizens (foreign or domestic)?

I know these questions are a bit loaded, but I'm genuinely curious about people's views here.

Reliving the Loewen NAFTA Case: Is a Court Ruling a Measure?

Following up on the post yesterday regarding U.S. government documents relating to the Loewen NAFTA case, turns out there was a lot of repetition in those documents.  The main substantive issue was whether court rulings constitute "measures," and how the U.S. should approach this issue as a jurisdictional argument.  To me, it seems clear and obvious that courts rulings are measures, but that was a different time, and investment arbitration is not WTO law, so maybe the debate made more sense back then.

I've plucked out a couple interesting passages from the second document:

Negotiating History (p. 17)

Although both sides point to the NAFTA's drafting history in support of their views, what remains of the negotiating history is unfortunately sparse and inconclusive.

Fear of Losing Case (p. 17) 

None of the agencies thinks that we are in a strong position with respect to the merits of the case. Justice, in particular, believes that we face a serious possibility of·losing if the case is heard on the merits. Although State and USTR assert that we have credible answers to each of Loewen's charges, they concede that only Justice has comprehensively analyzed the merits. Justice points out that the Mississippi judgments were widely viewed in both Canada and the U.S. (including Mississippi) as a miscarriage of justice. Professors Laurence Tribe and Charles Fried of Harvard Law School, and Sir Robert Jennings, former President of the International Court of Justice, all submitted testimony that the judgments were a "travesty." Justice does not deny that we have some credible defenses, but it is very concerned that the magnitude of the punitive damages awarded and Loewen's alleged inability to appeal from the jury award could lead an international tribunal to conclude that even our highly regarded, constitutionally based judicial system failed in this case to satisfy the NAFTA's "minimum standard of treatment." With respect to the question of damages, all of the agencies agree that the tribunal is unlikely to assess all of the damages claimed by Loewen, but it is not  unreasonable to expect an award of at least $50 million plus millions more in attorneys' fees and costs.

Dangers of Losing the Case (p.18)

Finally, Justice believes a Joss is likely to generate a great deal of political hostility toward the NAFTA, particularly if the NAFTA is construed to effect a waiver of sovereignty that would permit an international tribunal effectively to sit in review of decisions of United States courts at the election of foreign investors. Justice has noted that the case already has received significant media attention and fears that the possible headline ''NAFTA Panel Overturns Mississippi State Court Ruling, U.S. to Pay Millions" may threaten the continued existence of the NAFTA.

Clarity of NAFTA Provisions (p. 127)

State has previously advised us that the international standards of treatment incorporated in the NAFTA are largely untested and suffer from a severe lack of precision. 

Clinton Era Trade Documents

Previously confidential documents from the Clinton era are being released now and then.  I'm keeping an eye out for items that relate to international economic law.  Here are two recent ones from the Loewen NAFTA case:

http://www.clintonlibrary.gov/assets/storage/Research-Digital-Library/formerlywithheld/batch7/2010-0021-F-1.pdf

http://www.clintonlibrary.gov/assets/storage/Research-Digital-Library/formerlywithheld/batch7/2010-0021-F-2.pdf

I haven't read them yet -- they are long. Feel free to mention it in the comments if you see anything interesting in there.

ADDED: My friend Luke Peterson points me to this nugget on p. 122 (of the PDF) of the first document, which appears to come from a DOJ summary of its views of the case:

The tribunal's assertion of jurisdiction in Loewen would establish a dangerous precedent whereby the U.S. could face international arbitration with respect to any state or federal court judgment adversely affecting the interests of foreign fnvestors and, as a result, would likely generate a great deal of political hostility toward the NAFTA and other international agreements. Given that the U.S. is alone in its recognition of large punitive damage awards, we believe that the cost to the U.S. of allowing challenges to our court judgments far outweighs the benefits that U.S. investors may gain from being permitted to challenge 'foreign court judgments. A case such as Loewen highlights that the NAFTA provides foreign investors with more rights than Americans have and arguably gives foreign companies an advantage over domestic companies. While this may be true under any reading of the NAFTA, State's and USTR's view substantially expands the rights given to foreign investors that are not possessed by U.S. investors and corporations domestically. In any event, our interpretation will not cause a significant loss of protection for U.S. investors abroad because executive action, including an enforcement action, that results in a court judgment would still be a "measure" subject to the NAFTA.

Speaking Clearly on ISDS?

From a speech today by President-elect of the European Commission Jean-Claude Juncker before the European Parliament:

Investor-to-state disputes

I took note of the intense debates around investor-state dispute settlement (ISDS) in the Transatlantic Trade and Investment Partnership (TTIP) negotiations. Let me once again state my position clearly, that I had set out on 15 July in front of this House and that you will find in my Political Guidelines: My Commission will not accept that the jurisdiction of courts in the EU Member States be limited by special regimes for investor-to-state disputes. The rule of law and the principle of equality before the law must also apply in this context.

The negotiating mandate foresees a number of conditions that have to be respected by such a regime as well as an assessment of its relationship with domestic courts. There is thus no obligation in this regard: the mandate leaves it open and serves as a guide.

I had thought my commitment on this point was very clear but I am happy to clarify and reiterate it here today as a number of you have asked me do so: In the agreement that my Commission will eventually submit to this House for approval there will be nothing that limits for the parties the access to national courts or that will allow secret courts to have the final say in disputes between investors and States.

I have asked Frans Timmermans, in his role as First Vice-President in charge of the Rule of Law and the Charter of Fundamental Rights, to advise me on the matter. There will be no investor-to-state dispute clause in TTIP if Frans does not agree with it too.

I am confident that – with your support – we can negotiate an ambitious trade agreement with the U.S. along these lines, with full respect of European interests and the rule of law.

He says he is stating his position clearly, but it is clear to you?  I'm not sure it's clear to me.  I see some wiggle room there.  To take one example: He says "secret courts" will not have final say, but transparency reforms could make them no longer "secret."  So maybe there is some version of ISDS he will accept, yet we don't fully know what that version would look like.

I suspect that no one is eager to resolve this until they see if the TTIP actually has a chance to be completed, which many people are saying looks doubtful.  Why have a fight about ISDS in TTIP if there will not be a TTIP?

But regardless of what happens with the TTIP, they will need to have some kind of debate on ISDS as part of CETA and the EU-Singapore FTA.

OGEL & TDM Call for Papers: Special Issue on Renewable Energy Disputes

From OGEL and the TDM journal:

Oil, Gas, and Energy Law Journal (www.ogel.org) and Transnational Dispute Management (www.transnational-dispute-management.com) invite submissions for a joint Special Issue on Renewable Energy Disputes.

Renewable energy production is nothing new: windmills have been used to produce wind-based energy and dams have been used to produce mechanical energy for centuries past. However, the scale of investment in this area and the increased subsidies, regulation of and drive towards this type of electricity generation are unprecedented. Given the surge in activity in renewable energy production, it is no surprise that disputes in this area have started to arise.

Issues that have led to disputes within the EU, the US and globally have, for example, related to the national governments’ objective of ensuring maximum national or regional benefit from governmental measures in this area (similar to what is done in oil and gas-producing countries through local content requirements), miscalculations of subsidies in the planning stages and excessive costs for the state from such subsidies, especially when economic circumstances have changed. Furthermore, the scale of activities has in itself contributed to all kinds of disputes arising at various levels and various forums. These disputes may involve issues of public international law, EU and US law (at the supranational, national and subnational levels), private law and contractual arrangements. The Special Issue examines these types of disputes and analyses their backgrounds and the reasons why they arose. Recent and ongoing renewable energy disputes under international law have concerned international investment law and WTO law. However, recent renewable energy disputes at European level have mostly related to the free movement provisions of EU Treaty law. Contractual arrangements and connection issues serve as illustrations of private and contractual disputes in these areas.      

This OGEL/TDM Special Issue on Renewable Energy Disputes will examine all kinds of renewable energy disputes. The basic structure of the special issue is:

Introduction: Renewable energy disputes: an overview - Professor Kim Talus (UEF Law School)

I) Public International Law Disputes

• WTO cases: an overview (already in preparation)
• WTO case against Canada (Ontario local content requirement) (already in preparation)
• Investment Disputes in Renewable Energy (already in preparation)
• Further proposals welcome!

 

II) EU Law Disputes

 

• Judgment Ålands Vindkraft (already in preparation)
• Judgment Essent (already in preparation)
• Further proposals welcome!

 

III) National and Subnational Law and Commercial or Contractual Law Disputes

• Spain: Spanish Supreme Court and ICSID cases against Spain (already in preparation)
• UK Renewable Disputes (already in preparation)
• Further proposals welcome!

OGEL and TDM encourage submission of relevant papers, studies, and comments on various aspects of this subject, including International, regional and national disputes on various aspects of renewable energy disputes. Contributions discussing a particular topic within this area, such as need to reform the ISDS with regards renewable energy and climate change, are also welcome.

Papers should be submitted by the 15 January 2015 deadline to Professor Kim Talus - [email protected] - as well as a copy to [email protected]

 

Dr. Kim Talus University of Eastern Finland View profile [email protected]

The call for papers can also be found on the OGEL and TDM websites here: 

• http://www.ogel.org/news.asp?key=458
• http://www.transnational-dispute-management.com/news.asp?key=546

Feel free to forward this call for papers to colleagues who may be interested in contributing to the special issue.

What Do Americans Think of Mandatory Country of Origin Labelling?

I was struck by this sentence from a Global Trade Watch blog post, in reaction to yesterday's WTO panel report in the Article 21.5 proceeding in U.S. - COOL:

The COOL policy was created when Congress enacted mandatory country-of-origin labeling for meat – supported by 92 percent of the U.S. public in a recent poll – in the 2008 farm bill.

92 percent?  I didn't think you could get 92 percent of Americans to agree on anything.  Even a question about whether kittens are cute would get a disgruntled 15 percent who didn't like cat hair on their couch or something.  So, I clicked on their link to see what they were basing this on.

As it turns out, the survey is a little more interesting than Global Trade Watch lets on.  Here's the narrative description:

Consumer Demand Information about Food Origin

The overwhelming majority of consumers want food labels to reflect country of origin (92% of consumers) and state of origin (82%).

An outstanding percentage of consumers (90%) want to know if their meat is from outside the US. Consumers were asked about their preference for country of origin labeling on meat that came from a different country like Mexico. The majority of consumers (57%) want the labeling to include where the animal was born/raised and where the animal was slaughtered. A sizable portion of consumers (33%) want more stringent labeling; if the animal was born or raised in a different country, these consumers feel this food is a product of that country. Few consumers (6%) adopt the more lenient view that being slaughtered in the USA is sufficient for this meat to be labeled as a USA product.

Even better, though, are the actual questions and answers, which were as follows (p. 21):

Q14: Which, if any, of the following information should be provided on labels for meat, poultry, fish and produce?

Country of origin                                    92%
State of origin, if from the United States 82%
I do not have a strong opinion about this 1%
None of these                                       2%
Don't know/Unsure                                 1%

and:

Q15: If MEAT came from an animal that was born and raised in a different country, such as Mexico, and then slaughtered in the United States, which of the following labels would you prefer to convey this?

Born and raised in Mexico, slaughtered in the USA 57%
Product of Mexico                                                33%
Product of USA                                                    6%
I do not have a strong opinion about this                2%
None of these                                                      0%
Don't know/Unsure                                               1%

A few thoughts here.

First of all, just to be clear, consumers may want this information in some general sense, but they were not asked about a government mandate to provide it, or whether they would pay more for products that have it.  When faced with extra costs, they might think otherwise.  Also, people might object to government interference here.  The market does provide this information for those who want to pay for it (go to Whole Foods and see for yourself all the great information you can get!).  That might be enough for many people.

Second, a pretty high number also wanted information on the state of origin.  That's not something the COOL law currently does.  If this law is designed as a response to consumer sentiment, how come there is no information about the state of origin?  Can we look forward to Born in Virginia, Raised in Ohio, Summer camps in Vermont, Slaughtered in New York?

Third, question 15 seems less than totally objective, in two ways.  For one thing, it's easy to imagine there would be less concern about food products from Canada than from Mexico.  Yet Mexico was the country example given.

For another, "Product of Mexico" and "Product of USA" are not completely accurate, based on the description provided in the question. As a result, the only accurate choice was the first option.  As an alternative, what about a label that says, "Product of Mexico and/or USA"?  That's an obvious additional label option that would be accurate and, importantly, easier to comply with.  Do people actually want information on where a piece of meat was "born", "raised", and "slaughtered"?  I'm skeptical, and it will take better survey questions to convince me.

Mesa Power v. Canada NAFTA investor-state arbitration: public viewing of the hearing

Many of you will be familiar with Mesa Power as the NAFTA case that concerns the local content requirements in Ontario's feed-in-tariff (FIT) programme for renewably generated electricity, which were found to violate WTO rules in the recent Canada-Renewable Energy rulings.  The NAFTA claim raises far broader issues of the way in which Ontario administered the program, and the way politicians and officials decided who got what access to the market more generally, including issues of National and  MFN and Fair and Equitable Treatment.    

There is a public viewing of the hearing by closed circuit TV in Toronto, where it will occur the last week of this month.  For those who are interested, here is the link.  It is necessary to register with the Permanent Court of Arbitration, by the end of the day October 22 Hague time.http://www.pca-cpa.org/showpage.asp?pag_id=1579. 

 

It is also envisaged that the recording of the hearing will eventually be webcast.

(As some of you who read the Mesa amicus brief in Canada-Renewable Energy posted to the www.worldtradelaw.net site a while ago will be aware, I have been doing some work with the counsel for the investor in this case, Appleton & Associates). 

 

 

The Amended COOL Measure Was Not So Cool, a WTO Compliance Panel Said

Here is the compliance (DSU Article 21.5) panel report as well as a summary of findings.  Overall, the panel followed the Appellate Body’s approach in the original COOL dispute.  The panel concluded that the amended COOL measure actually “has increased the original COOL measure's detrimental impact on the competitive opportunities of imported livestock, and that this impact does not stem exclusively from legitimate regulatory distinctions.” 

 The gist of the COOL amendment measure, in terms of compliance with the original Appellate Body report, was to increase the level of precision: for example, changing from “Product of the United States, Canada, and Mexico” to “Born in Canada, Raised in Canada, Mexico and the U.S., and Slaughtered in the U.S.”  Obviously, the Article 21.5 panel did not buy this kind of change.  Here go some excerpts from the panel report to give readers some taste of the report.

 7.112. As mentioned, under the amended COOL measure more labels still mean more segregation. As a result of the unchanged requirement for an unbroken chain of reliable country of origin information, segregation of the downstream product (muscle cuts) necessarily entails segregation of the upstream product (livestock). The increase in the number of distinct labels for the above three types of muscle cuts also entails more segregation for the relevant types of muscle cuts and the originating livestock.

(…)

 7.282. In the original dispute, the Appellate Body found that "the manner in which the [original] COOL measure seeks to provide information to consumers on origin, through the regulatory distinctions described above, to be arbitrary, and the disproportionate burden imposed on upstream producers and processors to be unjustifiable." We consider that this finding is also relevant for the amended COOL measure, which entails an increased recordkeeping burden and a potential for label inaccuracy, and continues to exempt a large proportion of muscle cuts.

(…)

 7.284. We have found that the amended COOL measure has increased the original COOL measure's detrimental impact on the competitive opportunities of imported livestock, and that this impact does not stem exclusively from legitimate regulatory distinctions. We therefore find that the amended COOL measure accords less favourable treatment to imported livestock than to like products of US origin.

 For your information, the amended COOL measure was litigated in the U.S. court on different legal grounds (such as the First Amendment).  On July 30, 2014, the U.S. Court of Appeals for the DC Circuit denied a request for a preliminary injunction to block implementation of the amended COOL measure filed by the American Meat Institute (AMI).  Today, the AMI prevailed, not in the U.S court, but in the WTO tribunal.  The AMI announced today that:

 “The WTO decision upholding Canada’s and Mexico’s challenge to the U.S. COOL rule comes as no surprise. USDA’s mandatory COOL rule is not only onerous and burdensome on livestock producers and meat packers and processors, it does not bring the U.S. into compliance with its WTO obligations. By being out of compliance, the U.S. is subject to retaliation from Canada and Mexico that could cost the U.S. economy billions of dollars.

 While the U.S. has the option to appeal the ruling, we encourage USTR and USDA to instead work together with the industry and Congress to amend the COOL statute so that it complies with our international obligations and brings stability to the market. Such a change would help restore strong relationships with some of our largest and most important trading partners.”

 This whole COOL saga is reminiscent of an important dictum in the Section 301 case.

 7.77. Trade is conducted most often and increasingly by private operators.  It is through improved conditions for these private operators that Members benefit from WTO disciplines.  The denial of benefits to a Member which flows from a breach is often indirect and results from the impact of the breach on the market place and the activities of individuals within it. (…) (emphasis added)

In this dispute, these “private operators” include not only Canadian/Mexican but also American meat producers and suppliers. 

Where to publish in international law-a not entirely unbiased pitch for the London Review

My co-authors and I are close to signing off on our manuscript analyzing the WTO Seal Products rulings.  Coming from the very happy Howse/Langille experience with the Yale Journal of International Law, I think we will again submit to the US student-edited law journals-also the nature of the piece.  But if you have a thoughtful essay or review, please consider the London Review of International Law. 

It is a publication that is finding its way,  but-going hand in hand with that-there is an intellectual excitement happening.  Take a look at, for example a piece in the current issue on the Hannah Arendt film. 

Now for the disclosure:I am an advisory editor of the journal-that's the biased part.

A plus of the London Review is that one of the principal editors is a leading scholar of International economic law, Andrew Lang.  It is also relatively young in its leadership. I am not talking about chronological age necessarily-but relative freedom from the old guard.  EJIL is heavily controlled from the top-with a relatively large percentage of pieces apparently commissioned for symposia etc.  With any luck the London Review will blend its openness with a sense of mission, but one that is not too controlling.  I am optimistic.  My next piece is theirs...           

What Is Investment Protection For?

This is from U.S. Trade Representative Michael Froman:

investment protections are ... intended to safeguard against a host of abuses, including discrimination, repudiation of contracts, and expropriation of property without due process of law ...

It surprises me how little analysis of this issue exists. From what I can tell, the investment regime seems to be based on assumptions of bad treatment of foreign investment carried over from the 1950s, 1960s and 1970s.  But what does the treatment of foreign investors look like today?

Froman mentions a "host of abuses," and then lists three: (1) discrimination, (2) repudiation of contracts, and (3) expropriation of property without due process of law.  Are there other abuses?  What are they?

And what exactly is the situation with these three abuses?  In what countries do they take place?  How often do they take place?

And how does the situation of foreign investors compare to that of domestic investors, or for that matter with that of ordinary citizens (i.e., non-investors)?  Who exactly needs protection from governmental abuse?

I'm not sure we understand the nature of the problem, assuming there is one, very well.  With tariffs or discriminatory public procurement, you can often see the problem clearly.  With investment issues, by contrast, problems are difficult to detect.  A good first step, it seems to me, might be to have a neutral organization -- the OECD? UNCTAD? the WTO? -- gather some data on how foreign investors are treated around the world.  If we knew what the problem was, we would be better equipped to address it.

Call for Papers: 4th Conference of the SIEL Postgraduate and Early Professionals/Academics Network

The Postgraduate and Early Professionals/Academics Network of the Society of International Economic Law has issued a call for papers for its fourth conference:

4th Conference of the Postgraduate and Early Professionals/Academics Network of the Society of International Economic Law (PEPA/SIEL) 2015

Milan, 16-17 April 2015

Organised by PEPA/SIEL in collaboration with the Department of International, Legal, Historical and Political Studies of the University of Milan SIEL’s Postgraduate and Early Professionals/Academics Network (PEPA/SIEL) is, among other things, interested in fostering collaboration and mentoring opportunities for emerging academics and professionals in International Economic Law (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 fourth conference will take place on 16-17 April 2015 in Milan (Italy).

Call for Papers

This conference offers graduate students (students enrolled in Master or Ph.D. 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 and 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:

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

- International trade, investment, competition, monetary and financial law;

- The interaction of IEL branches with other branches of law governing intellectual property, human rights, environment, sustainable development, food safety;

- Bilateral and regional economic integration and the multilateral trading system;

- Comparative economic law, focusing on how international economic law interacts with laws, institutions and actors at the domestic level;

- International economics, philosophy, sociology, politics.

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 2 November 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 30 November 2014, after which they are expected to submit a conference paper (no more than 4000 words) by 15 March 2015. Abstracts 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 15 February 2015. Registration has to be done online at the SIEL website. Registration costs 45 GBP for non-SIEL Members, and 35 GBP for SIEL Members. SIEL Membership details may be found at the SIEL website (students membership is 5 GBP). The registration fee covers conference materials and coffee breaks of both days.

Cancellation of participation must be made in writing to [email protected] The deadline for cancellation is 25 March 2015. 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 cancellation will not be refunded.

A limited number of conference fee waivers is available for applicants facing financial hardship. Applicants for such a 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 applications will be notified by 31 January 2015.

Please understand that we will not be able to provide any travel or other financial assistance to conference participants.

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

Should you have any question regarding application or participation, please feel free to contact [email protected]

Organisers

Conference Co-Chairs: Angela Lupone, Manlio Frigo, Giovanna Adinolfi, Anna Micara, Freya Baetens and José Caiado

The Nature of "Serious Prejudice" Cases

In the comments on Sungjoon's post from the other day, Brett Williams said something really interesting:

There are some aspects of this Cotton litigation which ought to be celebrated as great achievements of the system. ... Secondly, it was the first time (going all the way back to 1948), that the multilateral trading system quantified the permissible retaliation in a non-violation situation - and the system gave a sensible answer to the question (not without some weaknesses in the 22.6 that hopefully can still be fixed in the future)- that the permissible retaliation is related to the size of the reduction of trade caused by the measure.  (emphasis added)

I've heard this talked about before, but never seen it in writing.  Now that there are actual words to quote, I'm going to quote them and put the issue out there for discussion.

If I understand the point correctly (and Brett, please correct me if I did not), there is an argument that findings of serious prejudice -- and "adverse effects" generally, I suppose -- under SCM Agreement Article 6 do not constitute violations of WTO obligations.  So if you act inconsistently with GATT Article III:4, that's a violation; or if you act inconstently with SCM Agreement Article 3.1(a), that's a violation.  But if you cause "serious prejudice" under Article 6, it's not a violation.  There is a remedy under Article 7, that's true; but causing serious prejudice is not actually a violation of the rules.

Why exactly would that be the case?  I'm not entirely sure, and I would like to hear thoughts from others on this, but perhaps it is because of the phrasing of the provision.  Article 3.1, which does lead to a violation, starts this way:  "the following subsidies ... shall be prohibited."  Because you have "shall" and "prohibited" in there, governments simply are not allowed to do these things.

By contrast, Article 5 reads as follows:

No Member should cause, through the use of any subsidy referred to in paragraphs 1 and 2 of Article 1, adverse effects to the interests of other Members, i.e.:

(a) injury to the domestic industry of another Member;

(b) nullification or impairment of benefits accruing directly or indirectly to other Members under GATT 1994 in particular the benefits of concessions bound under Article II of GATT 1994;

(c) serious prejudice to the interests of another Member.

Article 6 then explains in detail how to determine if serious prejudice exists.  But because there is a "should" rather than a "shall," there is no actual obligation here.

I'm not completely convinced this view of serious prejudice is right, for two reasons.  First, the Appellate Body has already told us that "should" can mean "shall": "

187. ... Although the word "should" is often used colloquially to imply an exhortation, or to state a preference, it is not always used in those ways. It can also be used "to express a duty [or] obligation".

And second, Article 7 sets out a clear remedy for adverse effects cases.  As a result, these cases are not like GATT "non-violation" cases, which don't have much of a remedy. Here is Article 7.9:

In the event the Member has not taken appropriate steps to remove the adverse effects of the subsidy or withdraw the subsidy within six months from the date when the DSB adopts the panel report or the Appellate Body report, and in the absence of agreement on compensation, the DSB shall grant authorization to the complaining Member to take countermeasures, commensurate with the degree and nature of the adverse effects determined to exist, unless the DSB decides by consensus to reject the request.

Of course, whether "serious prejudice" findings are violation or non-violation cases may be semantic to some exent; the existence of the strong remedy may be the more imporant consideration.

Unless of course I've misunderstood the whole thing, in which case feel free to explain it to me in the comments. 

Speaking of Settling WTO Disputes ...

... as Sungjoon was in the last post, first up there's this announcement from the Canadian government:

The Honourable Leona Aglukkaq, Minister of the Environment, Minister of the Canadian Northern Economic Development Agency and Minister for the Arctic Council; Foreign Affairs Minister John Baird; the Honourable Ed Fast, Minister of International Trade; and the Honourable Gail Shea, Minister of Fisheries and Oceans, today approved the Joint Statement by Canada and the European Union on Access to the European Union of Seal Products from Indigenous Communities of Canada.

The joint statement sets out the framework for cooperation to ensure that Canadian Indigenous communities are treated the same as any other Indigenous community seeking access for seal products in markets within the European Union.

The joint statement recognizes the importance of preserving traditional ways of life in Indigenous communities and establishes that the two sides will:

• ensure that nothing prevents the participation of Canadian non-Indigenous persons and organizations from processing, manufacturing and marketing Canadian Indigenous seal products;
• explore possibilities for supporting Indigenous communities and traditional ways of life through capacity building and the exchange of best practices;
• explore how Indigenous communities can benefit from the new opportunities opened up by the Canada-European Union Comprehensive Economic and Trade Agreement to develop their economic, social and environmental potential; and
• ensure that Indigenous seal products imported into the European Union are not limited due to their type or intended purpose.

An expert group will work in a collaborative manner with stakeholders to establish the administrative arrangements required for access to the EU available under its exemption for seal products from Canadian Indigenous communities.

The Government of Canada remains firmly committed to defending its sealing industry and the communities that depend on the seal harvest.

Is this part of a settlement of the WTO Seal Products dispute?  Will helping Canada's Inuits sell a few seal products in the EU resolve things?

And then there's the Clove Cigarettes case.  A few days ago, Politico reported the following terms of a settlement:

The U.S. and Indonesia submitted papers with the WTO on Friday to terminate the dispute; in exchange for keeping the ban in place, the United States agreed to do the following:

-- Consider giving duty-free treatment to imports of insulated ignition wiring sets from Indonesia under a lapsed tariff-cutting program for developing nations known as the Generalized System of Preferences.

-- Postpone a dispute against Indonesia at the WTO over the country’s restrictions on exports of certain mineral and mining products, partly because affected U.S. companies have received export licenses.

-- Refrain from arbitrary discrimination against cigars or cigarillos from Indonesia as the FDA gains new regulatory control over those products. Once the ban was enacted, Indonesian clove cigarettes were modified slightly to allow them to be sold in the U.S. as cigars.

-- Finally, the two countries agreed to intensify talks for an action plan to improve intellectual property protection and enforcement in Indonesia.

I've been waiting for a formal announcement of the terms, from USTR or an official WTO document, but I haven't seen one yet. The WTO has notices related to a "mutually agreed solution" (WT/DS406/17, WT/DS406/18) but there doesn't seem to be any information on what that solution is!

To Perform (Comply) or Pay, That’s the Question!

The recent deal (settlement) between the United States and Brazil to end the long-standing cotton dispute has stirred up (old) controversy in the nature of WTO remedies, and more broadly the nature of the WTO itself: is the WTO a mere “contract” or something more than that, say, a “legal system” or even “trade constitution”? 

According to an official announcement, the U.S. government seems to lean toward the former position.  The U.S. Secretary of Agriculture Tom Vilsack said that “through this negotiated solution, the United States and Brazil can finally put this dispute behind us.”  Gary Clyde Hufbauer from the Peterson Institute seems to agree to this view.  Hufbauer observed that “money damages, paid in this way, are much fairer, and do not destroy the benefits of international commerce, unlike concentrated retaliation against firms that had nothing to do with the original dispute.”

 However, Daniel Ikenson from the Cato Institute begged to differ.  Ikenson argued that “settlements like these may appease the primary governments involved in the dispute, but they leave unresolved the original sins, which impose a lot of collateral damage on a variety of interests.  In that regard, settlements are failures.”  Alan Beattie from the Financial Times offered a harsher criticism.  Beattie opined that

This case should be brought up whenever officials from the US trade representative’s office orate piously about the rule of law and free trade. The US in this matter has proven to be a selfish, craven malefactor that prefers to buy its way out of legal obligations than to confront a tiny, cosseted elite bloated with taxpayer cash. The settlement undermines the ability of poorer emerging market countries to benefit from the multilateral trading system. It is a profoundly retrograde step.

 Indeed, this controversy over the nature of WTO remedies dates back to the genesis of the WTO.  Some might recall the famous debate between Judith Bello and John Jackson in the Nineties.  While Judith Bello predicated her view of elective remedies (such as paying damages) on the very notion of sovereignty, John Jackson adamantly opposed buying out violations.  Later on, law and economics scholars espoused the former view under the banner of “efficient breach.”  The ostensible remedial primacy of performance (compliance) over compensation under the WTO DSU did not stop this controversy.  Article 22.1 of DSU provides that “neither compensation nor the suspension of concessions or other obligations is preferred to full implementation of a recommendation to bring a measure into conformity with the covered agreements.”

 Are we going to see more of this kind of settlement in the future? 

Fixing ISDS vs. Excluding Tobacco Control from ISDS

Back in 2012, I argued against a carve out of tobacco from trade and investment rules, saying this:

Let’s turn now to the argument, made by many critics of the current system, that existing trade rules that go beyond protectionism undermine national sovereignty, including the ability to regulate, and thus intrude into domestic health regulation. ...

The question then arises as to whether special rules—that is, the “carve-out”—for tobacco are needed to prevent this interference. On this point, the issue of too much intrusion of trade and investment rules is not specific to tobacco. This is a more general problem with these agreements. As a result, rather than develop new rules for the tobacco industry, it may be worth thinking more broadly about problems arising from international economic agreements intruding into domestic regulation. Tobacco is unique in some ways, but its dangers have close parallels with many other products that cause health concerns. It is not clear that any differences between tobacco and other products merit a special regime. One of the most famous WTO disputes involved a French ban on asbestos, a product even more widely cited as a health hazard than tobacco. Thus, to the extent there is a problem, having special trade rules apply to tobacco is not the solution. (emphasis added)

To clarify what I was going for there: Don't carve tobacco out of trade/investment agreements, just fix ISDS and IP rules!

Now we have this new proposal from USTR, as reported by Inside U.S. Trade, for a carve out (of some sort) of tobacco from ISDS in the TPP:

U.S. trade officials have reached out to some other Trans-Pacific Partnership (TPP) countries to informally float the idea of excluding tobacco-related challenges from being brought under the deal's investor-state dispute settlement (ISDS) mechanism, according to informed sources. This move signals the United States may be ready to bring its position on this issue closer to that of public health groups, which have demanded tobacco be completely carved out from the agreement.

Sources said the Office of the U.S. Trade Representative has indicated to these TPP countries that it may propose language carving out tobacco-related disputes from ISDS at the upcoming TPP meetings in Australia.

But a USTR spokesman said the U.S. does not expect to table a new tobacco proposal in Australia. "TPP countries continue to debate how to address tobacco public health issues in the agreement," the spokesman said. "The United States has not tabled any new U.S. proposal on tobacco products and is still engaged on congressional and stakeholder consultation on an appropriate approach. We do not expect to table a new proposal in Australia."

Here are some initial thoughts in reaction:

First, we haven't seen any actual text yet (and USTR stresses there is no proposal), so take that into account with any of the analysis that follows.

Second, in case there were any doubts, it should now be clear how little influence I have on U.S. trade policy!

Third, it seems odd to me to exclude tobacco measures from all ISDS challenges. Doing so means that a TPP nation could expropriate a tobacco factory without providing compensation; or that it could tax foreign-owned tobacco companies at a rate higher than it taxes domestically-owned ones. Putting aside my other criticisms of ISDS for a moment, that is a strange result.

And fourth, clearly, this proposal is in response to concerns expressed by public health advocates that investment rules undermine the ability of governments to regulate tobacco for public health reasons. By carving out tobacco in this way, I take this proposal as an acknowledgement by the U.S. government that current investment rules could interefere with public health regulation.  (Or maybe they don't think it interferes, but gave up trying to convince public health folks otherwise?)  The carve out is designed to address this problem.

But if that's the case, why have a system where investment rules undermine public health regulation in all sectors other than tobacco?  Why not just fix the investment rules so they have no chance of interfering? Tobacco is far from the only public health issue, and in my view isn't even the biggest one.  If you are worried about tobacco-related challenges, why not food-related challenges as well?  Trans fat bans, sugary-food regulations, or even burger taxes could all be challenged.  Carving out tobacco suggests that ISDS does cause problems for public health regulation, but we are willing to ignore that for non-tobacco public health issues.  It surprises me that public health advocates would take this view.  If they agree to ISDS with a tobacco carve out, it will not be easy to go back in to a signed agreement later and add new exclusions.  If they want room to regulate public health, why not push for a general revision to the investment rules?  Is it just a practical political judgement that this is all that can be achieved right now?

In terms of legal drafting, the easiest solution to the problem of regulatory autonomy would be to focus the investment rules on non-discrimination, so that you could regulate public health (or other policy areas) as much as you like, as long as you do so in a non-discriminatory manner.  Current rules go beyond that in ways that make it pretty easy to challenge tobacco and other regulations even where they do not discriminate, and that's where the problem lies.  (Note that I said easy to challenge; not necessarily easy to win that challenge).

However, politics may be the more important consideration here, with the U.S. government trying to balance out the competing voices pushing policy in particular directions.  Getting people to rethink ISDS is not easy (believe me!), so perhaps this is seen as a less difficult solution.  At the same time, though, the politics of tobacco are not going to be that simple.  It's not just the public health community that needs to be assuaged.  Presumably there are some key members of Congress from tobacco-producing states who also have a strong voice on these issues, and they will not be eager to go along with a tobacco carve out.

Tobacco Plain Packaging in India

This is a guest post from trade lawyer Adarsh Ramanujan:

In a very interesting development in India relating to the plain packaging of tobacco products, the High Court of Allahabad (State of Uttar Pradesh) recently ordered that the Government of India "must consider to implement" the plain packaging scheme for tobacco products "at the earliest" and "strongly recommend[ed]" the Government of India to "consider the feasibility of implementing the plain packaging of cigarettes and other tobacco products".

The orders were passed pursuant to a public interest litigation (PIL) initiated under the Indian Constitution by a not-for-profit organization. For those who are not aware, PIL is a unique concept in a few common law countries, whereby any public spirited person can seek judicial directions on matters of public concern, most commonly, those relating to environment and public health. The petition sought a direction against the Government of India as well as one of the States within India, i.e. the State of Uttar Pradesh, to create and implement a scheme for plain packaging of tobacco products.

The starting point of this litigation is the Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce Production, Supply and Distribution) Act, 2003 and the 2008 Rules framed thereunder. One of the main objects of the legislation was to protect non-smokers as well as protect children and young people from being addicted to tobacco. The Act also recognized in its preamble that this can be achieved, among others, by "eventually eliminat[ing] all direct and indirect advertising, promotion and sponsorship concerning tobacco". While the regime did place restrictions on advertising tobacco products, it did not specifically address plain packaging, i.e. "prohibiting use of logos, colours, brand names or prominent information on packaging". The petitioner's grievance was that branding / colourful packaging of tobacco products dilutes the achievement of the object of the legislation. By allowing the petition, the judgment posits the view that plain packaging of tobacco products caters to the object of eliminating direct and indirect advertising and promotion of tobacco products. The tenor of the submissions of the petitioner and of the judgment, shows the emphasis on children / youth / young adults as a protected group and the effect plain packaging may have in preventing tobacco addiction in this protected group.

What may be of interest is the basis on which such a direction was passed by the Court. The Court placed significant reliance on a study by Melanie A. Wakefield et al. on the recent implementation of the Australia Plain Packaging legislation. The judgment copiously quotes from this study to conclude that plain packaging is a "source of motivation or reminder for quitting" and / or a source for reducing "the appeal of smoking for young people". The judgment also effectively relies on an experimental study conducted in Brazil in relation to young women in 2012 (while the citation of this study is not mentioned in the judgment, this appears to be one). The Brazil study provides statistical evidence linking plain packaging to the reduction in the appeal for smoking among youth and young adults. Based on these and other reports concerning the ill-effects of tobacco, the High Court concluded that "[t]obacco plain packaging measure would be a long term investment to safeguard the health of the Indian youth". The High Court attached credibility to these factual conclusions because of the following factors:

-          Plain packaging has been suggested based on "safe research" and supported by leading public health experts worldwide;

-          The measure has been recommended by the WHO;

-          Australia has implemented the scheme and the constitutionality of this measure has been upheld by the Australian High Court; and

-          Other countries (notably, the UK and Ireland) are considering such measures.

Most people who are following the Plain Packaging disputes at the WTO would be aware that one of the most contested aspects of these disputes would be the factual basis – whether and how plain packaging of tobacco products will contribute to improving public health. In this context, it is interesting to note the certainty with which the Court in India arrived at its factual conclusions. This is probably due to the fact that neither the Union of India nor the State of U.P. raised any objection against the prayer of the petitioner. It was also stated on record that an amendment to this effect is already under deliberation at both the Central and the State levels. Given this background, the outcome in this case seems self-evident. Whether the result would have been the same had there been a dispute raised on facts cannot be predicted. The disputes at the WTO would involve such factual issues and it would be interesting to see the nature of evidence produced on both sides and manner in which the DSB bodies would apply their standard of review in considering the same. 

TTIP Hurdles

I have a short Cato paper discussing how the TTIP could actually get done, despite a few big hurdles it is facing. I tried to be optimistic, maintain a positive outlook, and suggest a way forward. However, I should note that what I hear from people who actually are insiders to the process (which I am not!) is mostly negative these days. Reports in Inside U.S. Trade read the same way.

The hurdles I mentioned in the paper are ISDS, GIs and regulatory issues. The short answer I give is to take out ISDS and GIs (there's just no middle ground here); and try to quickly get on the same page with regulatory issues, or remove them to a different forum.

Another hurdle might be human rights. This is from Embassy Magazine:

A clause that could lead to an eventual suspension of the Canada-European Union free trade deal over human rights issues has found its way into a recently announced political agreement between the two sides—despite Canada’s initial objection, Embassy has learned.

Several European Union officials in Brussels, the EU nerve centre, have confirmed the clause is included in the so-called Strategic Partnership Agreement, a deal that outlines an overarching framework for Canada-EU co-operation on various global issues, including security, energy, research and innovation as well as the Arctic.

...

Embassy reported in May 2013 about Canadian concerns over proposed text in the SPA that would link trade to human rights protection and nuclear non-proliferation, and which would allow the EU to suspend CETA if it found Canada wasn’t living up to human rights or non-proliferation standards. Canada could do the same to the EU.

...

The EU has been using this model in its political framework agreements with countries less developed than the 28 member states as a way to condition trade and development assistance to a country’s performance in maintaining international human rights and non-proliferation commitments.

The EU has argued this formula must be maintained with Canada as well in order to be consistent and to avoid setting a precedent that would jeopardize talks with other countries in the future.

It insisted both publicly and behind the scenes on this approach, aiming to reassure Canadians about the unlikelihood of the clause ever being invoked.

...

The technicalities

The SPA outlines a series of measures that could be taken by either side in case of violations of human rights or nuclear non-proliferation commitments. The issue could be dealt with institutionally, through dialogue or, if no solution is found, the SPA could also be suspended, the EU official explained.

In the event that the SPA is suspended, either side could also go further if the situation requires it, including by terminating the trade deal. But the CETA could only be suspended under its own rules, enshrined within the trade agreement, the official added.

...

... The operative paragraphs are only within SPA, the EU official explained. In other words, the suspensive clause is only in the SPA and can be technically used to suspend both agreements.

So Canada has apparently agreed to a human rights clause in relation to the SPA/CETA. Will the U.S. accept something similar in the TTIP? When I say the U.S, I'm thinking in particular of Congress.  And if not, will the EU agree to leave it out? They seem pretty insistent. As with ISDS and GIs, compromise here is necessary, but is going to be a challenge.

CETA, Investment Obligations, and Public Debt

This is from the officially released CETA text (p. 184):

Annex X: Public Debt

1. No claim that a restructuring of debt issued by a Party breaches an obligation under Sections [Non-Discriminatory Treatment, Investment Protection] may be submitted to, or if already submitted continue in, arbitration under Section 6 [Investor-State Dispute Settlement] if the restructuring is a negotiated restructuring at the time of submission, or becomes a negotiated restructuring after such submission, except for a claim that the restructuring violates Article X.6 [National Treatment] or Article X.7 [Most-Favoured Nation].

2. Notwithstanding [ISDS: Article X.22 Submission of a Claim to Arbitration, para 4], and subject to paragraph 1 of this Annex, an investor of another Party may not submit a claim under Section 6 [Investor-State Dispute Settlement] that a restructuring of debt issued by a Party breaches an obligation under Sections [ Non-Discriminatory Treatment, Investment Protection] (other than Article X.6 [National Treatment] or Article X.7 [Most-Favoured Nation]) unless 270 days have elapsed from the date of receipt by the respondent of the written request for consultations pursuant to [Article X.18 Consultations].

3. For the purposes of this Annex, ‘negotiated restructuring’ means the restructuring or rescheduling of a debt instrument that has been effected through (i) a modification or amendment of such debt instrument, as provided for under its terms, or (ii) a comprehensive debt exchange or other similar process in which the holders of no less than 75 percent of the aggregate principal amount of the outstanding debt under such debt instrument have consented to such debt exchange or other process.

This provision must be a response to the issues arising from the Argentina debt litigation going on right now, excluding most such claims in the CETA. Any thoughts?  Is a provision along these lines a good way to deal with the issue? Will it spread to other investment chapters/treaties? Would the U.S. accept it in the TTIP?

Thanks to Harm Schepel for the tip.

ADDED: I did some quick searches, and it seems that this provision exists in other agreements in some form.  So what exactly is the origin and purpose?

Does CETA Violate WTO Obligations? How About NAFTA Chapter 11?

This is from the U.S. dairy industry:

The text of the European Union-Canada Comprehensive Economic and Trade Agreement (CETA) released at the end of last week contains provisions on geographical indications (GIs) and reallocates a portion of the World Trade Organization tariff rate quota for cheese to the EU. The U.S. dairy industry expressed concern today that these provisions would raise artificial trade barriers restricting market access for American cheeses to the Canadian market. In addition, CETA provides very limited access to many EU dairy products as a result of the agreement's prioritization of the GI goals of a few "squeaky wheels," at the expense of broader gains across the full EU dairy industry, according to U.S. dairy industry trade groups.

The provisions on geographical indications are particularly alarming because they grant automatic protection to the EU for "asiago," "feta," "fontina," "gorgonzola" and "munster" in complete disregard of Canadian intellectual property laws. Cheese manufacturers that produced those cheeses prior to October 18, 2013, will be allowed to continue to use those names, but future producers of those cheeses will have to add qualifiers, such as "kind," "type," "style" and "imitation." These new limitations on the use of generic names clearly violate Canadian intellectual property procedures and existing international trade commitments.

"The automatic protection for five cheese names that are generic in Canada, the U.S. and globally is another example of the EU's overreach on geographical indications," said Clay Hough, senior group vice president of the International Dairy Foods Association (IDFA).  "The EU's GI strategy is incompatible with the fundamental goal of a trade negotiation, which is to remove trade barriers—not add them—and allow for greater competition."

Would the U.S. government challenge Canadian actions taken to implement the CETA on these issues in a WTO complaint?  If the U.S. industry has any investment in Canada, would it bring a NAFTA Chapter 11 complaint?

Trade Liberalization and Tobacco Control

I've heard it suggested that opening up developing country tobacco markets to foreign competition will mean lower prices and greater consumption.  But is that true?  This article calls this into question:

For more than two decades, public health scholars and proponents have demonstrated concern about the negative effects of trade liberalisation on tobacco control policies. However, there is little theoretically-guided, empirical research across time and space that evaluates this relationship. Accordingly, we use one major region that has experienced rapid and significant recent liberalisation, Southeast Asia, and examine key tobacco control-relevant outcomes between 1999 and 2012. While we find a modest increase in regional trade in tobacco products in some countries, the effects on tobacco affordability and consumption are very mixed with no clear link to liberalisation. We argue that widespread penetration of the region by transnational tobacco firms is likely mitigating the effects of trade liberalisation. Notably, tobacco control policies have also generally improved across the region, part of which is likely the result of successful regional and global efforts by civil society, governments and intergovernmental organisations. The results suggest that scholars and public health proponents should move the focus away from narrow economic aspects of liberalisation toward specific issues that are more likely to affect tobacco control, such as intellectual property rights protections and investor–state dispute settlement.

Here's a quote from the article: "The very mixed results above across key aspects of the trade and tobacco nexus suggest that there is no clear-cut link between trade liberalisation and a decline in tobacco control and/or an increase in tobacco consumption in Southeast Asia."

The article is subscriber only, but you can watch a talk by one of the authors here: https://www.youtube.com/watch?v=HQst1hN-hPc