So much happened in the trade policy world today. I'm going to mention four things. These are probably not the most important four, but they are the four that piqued my interest enough to blog about them.
1. In NAFTA, it looks like the sunset clause -- automatic expiration in 5 years unless the parties affirmatively decide to renew -- has been replaced by something along these lines:
In a White House background briefing, officials say the U.S. and Mexico reached a compromise on the sunset clause: The new NAFTA will last only 16 years, with mandatory reviews every six years. At each review, the countries can either extend the deal another 16 or renegotiate it.
I guess this is better than the original sunset, but I'm still not happy with it. I want to understand it a little better first, though. For example, who in the U.S. gets to decide whether to extend or renegotiate? Congress or the President? And what happens if they can't decide whether to extend or renegotiate? Are they forced to choose, and, if so, how are they forced? And is there a deadline for the renegotiation?
My sense is this takes us in a bad direction, and other governments and Congress should push back hard. But let's see the details first. If it said, "the agreement is extended automatically unless all three parties decide to renegotiate," that might be OK.
2. Also in NAFTA, there may be news on ISDS, although I haven't seen good confirmation of this: "ISDS dispute resolution to apply to energy, telecom, infrastructure; limited for other sectors." Here's my question: Does this make sense politically? Is this going to be enough for ISDS critics? Will it be too much for ISDS supporters? (And why not just split trade liberalization from investment protection?
3. Because there were four complainants in the Plain Packaging case, there were four WTO panel reports, issued in a single document. Two were adopted today; the other two were appealed. So that means we could have differing statements about identical issues in an adopted panel report and an adopted Appellate Body report. Of course, the Appellate Body report takes precedence, but still, this makes my head spin.
4. This is from the U.S. statement at the DSB meeting today:
The Appellate Body’s approach to the standard of review under Article 11 has also been inconsistent. Initially, the Appellate Body set a very high threshold and explained that for an Article 11 appeal to succeed, the party needed to demonstrate that the panel had committed “egregious error that calls into question the good faith of the panel.”
However, over time, the Appellate Body has altered its approach. For instance, more recently the Appellate Body has explained that “for a claim under Article 11 to succeed, we must be satisfied that the panel has exceeded its authority as the trier of facts.”
The Appellate Body went on to explain this means that “a panel must provide a ‘reasoned and adequate’ explanation for its findings and coherent reasoning. It has to base its findings on a sufficient evidentiary basis on the record, may not apply a double standard of proof, and a panel's treatment of the evidence must not lack ‘even-handedness.’”
This would appear to be a much lower threshold that is significantly different from an “egregious error that calls into question the good faith of the panel.”
As I've said, I too am worried about a DSU Article 11 standard that is too expansive. But what is the right standard here? I would be interested to hear the U.S. view on this.
