International Economic Law and Policy Blog

More (Alleged) Canadian Tax Breaks

As mentioned a little while ago, the U.S. seems to have decided not to challenge alleged Canadian tax incentives to lure TV and film production.  But now the UK is alleging that Canada is using tax breaks to get video game producers to locate there:

UK Culture Minister Margaret Hodge says the UK could challenge the legality of Canada's generous tax credits so that other nations can compete on a more even playing field.

Hodge, the UK Minister of State for Culture, Media and Sport, told Channel 4 News it was possible that Canadian tax credits that offer Quebec region-based games companies such as Ubisoft and EA up to 40 percent of studio staff salaries refunded via tax rebates could breach WTO (World Trade Organization) laws.

"We're looking at what they [Canada] have done. We're not sure what they have done sticks by the WTO rules on competition and will have to think about challenging what they are doing if they are, in our lawyer's views, breaching those rules," said Hodge.

While the Canadian high commission maintains it is abiding by WTO rules, the incentives offered in the Quebec region have been cited by some in the UK games industry, and by others in wider circles, as reason for the loss of domestic gaming talent.

See also here and here.  It sounds like this claim has many elements similar to the TV/film subsidies issue, as they both relate substatially to services.

American Versus European Legal Thought

This post from the Antitrust Review blog is a little off-topic, but I found it interesting, and perhaps other trade lawyers who have worked in both American and European legal systems will as well:

... legal scholarship in the US is dominated by an external or policy point of view, in which the law is the object of study, undertaken from an economic, sociological, psychological, etc. point of view. In contrast, most European scholarship — with the exception of legal history — proceeds from an internal point of view, that is, accepting of law’s normative constraints.

I am curious to see whether others think this is an accurate description.

IEL Conference in New Zealand

For those in the neighborhood, or who want to take a nice trip, the New Zealand Centre of International Economic Law is holding its inaugural conference on 14-15 December 2007 in Wellington, New Zealand.  The conference is entitled: International Economic Law and National Autonomy: Convergence or Divergence?  The program is here: http://www.victoria.ac.nz/law/centres/nzciel/nzciel-conf-07.pdf

WTO Appellate Body Selection

I have heard that the WTO is now in the process of selecting two new Appellate Body members to replace Mr. Taniguchi and Ms. Janow later this year.  I have also heard rumors about the US government's nominees but could not find anything on it on the USTR webpage.  I have also heard rumors about nominees from China and from South Korea.  Yet when I looked on the WTO website on the Appellate Body page, I saw the list of current members, but no information about the ongoing selection process.  Has anyone been able to find  information on the WTO website regarding who the current nominees are?  It would be troubling to think that  something as important as Appellate Body selection is being done without basic transparency.  I would like to see a page with all of the nominees listed with photos and their bios.  Is the WTO going to inform the public about the new members of the Appellate Body only AFTER they have been selected?  I would hope that the WTO wants the public to know who the candidates are so that individuals, companies, and NGOs could pass on their views to the selection committee and the governments that comprise the DSB.   I noticed that Director-General Lamy gave a speech at Georgetown Law Center on October 22 stressing the need for "active transparency."  I for one would like to see more active transparency inside the WTO.

Should the WTO Play a Role in Currency Issues?

Director-General Pascal Lamy says no:

The World Trade Organization should not take on the job of deciding whether China or any other country is following an appropriate currency policy, the head of the WTO said on Monday.

"This is something for the IMF (International Monetary Fund) and I would prefer this be left to them," WTO Director General Pascal Lamy said in a speech at Georgetown University's law school on the WTO's "surveillance" role in ensuring countries honor their trade commitments.

I've argued before on this blog that the WTO should play a role in this area.  Here are three of my reasons:

1.  Exchange rates can be manipulated to give domestic producers an advantage over their foreign competitors (I'm not saying that they have in any particular situation, just that theoretically they can be used this way).  I think it's safe to say that one of the core goals of the WTO is fighting protectionism, and if currency manipulation is used for protectionism, it should be addressed.

2.  Without effective international rules in this area (and I don't think the IMF can regulate very effectively here), there is a good chance that countries will take unilateral action to fight perceived currency manipulation, leading to increased trade friction.  WTO rules on the issue could help prevent this.

3.  In the absence of explicit rules on the subject, a WTO complaint might be brought based on existing rules, which will force panels and the Appellate Body to develop something on their own.  Whatever they come up with could very possibly make all sides unhappy.

Reimagining Free Trade (for Free)

Professor Roberto Unger has written "Free Trade Reimagined: The World Division of Labor and the Method of Economics," and it is posted online as a free PDF.  From the web description:  "Unger takes a new approach to show when international trade is likely to be useful or harmful to the socially inclusive economic growth that every nation wants. Another message is that the movement of people and ideas is more important than the movement of things and money, and that freedom to change the institutions defining a market economy is just as important as freedom to exchange goods on the basis of those institutions."

While in law school I took a class that was co-taught by Professor Unger and Jeffrey Sachs.  They both had a lot of very interesting things to say, although it seemed like they were talking past each other a great deal of the time.

Trade Rules and Tax Incentives for Locating Production

The Section 301 petition I mentioned a few weeks ago regarding Canadian subsidies to lure U.S. production of movies and TV shows has been rejected by USTR.  The USTR press release says:  "Based on a thorough review of the economic data, other facts, and legal arguments set out in the petition, the interagency committee unanimously recommended that the USTR not accept the petition because a dispute based on the information and arguments set out in the petition would not be effective in addressing the Canadian subsidies."

I can understand the reluctance to bring a complaint.  Applying trade agreement rules to locational tax incentives is difficult, especially where there are services involved.  I do think that such incentives are a serious problem, though.  It's one thing to compete for businesses to locate in your territory by offering a well-educated workforce or an efficient governing regime.  But it's a quite different matter to compete with other jurisdictions by offering tax breaks to specific companies or industries to get them to set up shop.  I'm convinced we would be better off if cities, states and national governments stopped this competition.  Unfortunately, the current domestic and international rules don't seem to address the problem very well.

On the other hand, I don't quite know what to make of this proposal to offer tax breaks if your companies locate somewhere else.  Since it's not likely to happen, though, I'm not going to spend too much time thinking about it.

Disclosure of Panel Reports

On October 15, Brazil's Ministry of External Relations posted a press release on the Cotton Dispute. The Ministry stated that the final report of the compliance panel "confirms the Brazilian understanding with regard to the insufficiency of the measures taken by the United States to comply with the decisions of the original panel." The press release also states that the "text of the final report is confidential..." Brazil's action in disclosing the contents of a voluntary report seems inappropriate and self-serving.  Since the report has not been released to the public (although it will eventually be released), a government should not comment on it when the public is unable to verify the accuracy of the government's statement. Brazil's actions undermines the WTO because it shows the non-transparency of the DS system.  I don't know if Brazil's measure violates the letter of the DSU but it certainly violates the spirit of the DSU.  I don't see any specific prohibition in the DSU of a party revealing the contents of a non-public final report (or for that matter an interim report).  Perhaps the solution is for the panel to include in its working procedures a prohibition of such premature disclosure.  I looked on the WTO website for the working procedures of the panel and did not see any.

No Search For You!

I don't know what China's GATS commitments are in this area, but at least in principle this seems like a national treatment violation if the government was involved:

US Internet search engines in China were being hijacked and directed to Chinese-owned Baidu, analysts said Wednesday, speculating that the move was in retaliation for Washington's award to Tibet's exiled spiritual leader the Dalai Lama.

That seems like the equivalent of the U.S. government taking people from Toyota dealerships and driving them over to Ford.

(For those who didn't catch it, the title of the post is a reference to a Seinfeld episode.)

Ron Paul on Trade Agreements

He's not a leading candidate, but Ron Paul does have a devoted group of libertarian followers.  His view on trade, as I understand it, is that we should practice free trade, but we don't need trade agreements and international institutions to accomplish this.  But this statement he makes about the threat from such agreements and institutions mystifies me:

Both the WTO and CAFTA could force Americans to get a doctor’s prescription to take herbs and vitamins. Alternative treatments could be banned.

Where does this idea come from?  Usually, there is something underlying exaggerated criticisms of trade agreements, but here I can't figure out what it could possibly be.

The WTO, Cotton, and Fruits and Vegetables

Recent news reports indicate that the U.S. has lost before the compliance panel in the Cotton dispute.  I always found the planting restrictions on fruits and vegetables that became an issue in the case very confusing from a policy perspective (why are we discouraging fruits and vegetables?), but this blog post provides some excellent background:

From a nutrition perspective, the most blatantly counter-productive U.S. farm subsidy policy may be the prohibition against growing fruits and vegetables on land that is eligible for direct subsidy payments.

This is a bit complicated, so bear with me.

Farm subsidies used to be criticized for encouraging overproduction of major row crops, such as corn, wheat, soybeans, and cotton, because farmers could earn more subsidies by growing more of the crop. The overproduction harmed the environment and immiserated poor farmers in developing countries by suppressing world prices for these crops. To partly -- and only partly -- remedy these problems, beginning in the 1996 and 2002 farm bills, a portion of the subsidies were converted to "direct payments," which were based on a farmer's historical production rather than current production. These direct payments were supposed to solve the problem of encouraging overproduction, because farmers could earn billions of dollars of these welfare-style payments even without growing the crop.

However, fruit and vegetable lobbyists were concerned that corn, soybean, wheat, and cotton farmers would begin growing fruits and vegetables while collecting direct payments. This would increase the supply of fruits and vegetables and suppress their prices.

From a nutrition perspective, that would be great! But, the fruit and vegetable industries are more powerful than the nutrition lobby, so they convinced Congress to prohibit farmers from growing fruits and vegetables on land that qualified for direct subsidy payments.

Environmental Subsidies and their Trade Effects

My feeling has always been that many alleged trade and the environment conflicts are overblown.  But here's a conflict that seems real and problematic:

The European Biodiesel Board (EBB) said it plans to submit antidumping trade complaints to the European Union and the World Trade Organization against U.S. subsidies, citing the possible disadvantages of "massive exports of unfair subsidized U.S. biodiesel" to Europe. The group called on the U.S. Congress to end the subsidy program for B99 biodiesel producers that gives U.S. producers around $283 per metric ton for B99 biodiesel. The group estimates that some 700,000 metric tons of biodiesel have entered into the EU since January 2007 compared to only 90,000 tons for 2006. Indonesian and Malaysian producers also are taking advantage of the subsidy by shipping biodiesel to the U.S. and onward to Europe, EBB said.

I don't see an easy way out.  One way to address the problem would be to establish rules that make subsidies designed to promote a clean environment permissible under certain circumstances, but that will be a difficult negotation.

Is the Economics Nobel Committee Allergic to International Trade Issues?

Like many persons, my pronostic was that the 2007 Nobel price in Economics would go to Jagdish Bhagwati. My intuition was that this would have been a way of helping the Doha Round in the same way that the Al Gore Nobel prize is a way of helping Kyoto.

Following the very surprising 2007 prize to, once again, adepts of game theory, I decided to check how many international trade economists have received this price since 1969, the year the prize was created. I discovered that the only year where the prize was given to international trade economists was 1977 where the winners were Ohlin and Meade ( Mundell, the "father of the Euro", received it in 1999 but his is a specialist of international monetary issues and not of international trade).

In my view, this is not an accident. It is clear that the Economics Nobel Prize Committee is now controlled by Game Theorists who think that the mathematical "demonstration" of simple insights is a great achievement. For International trade policy, this is a sad thing since the Nobel prize signals to future researchers that the way of achieving recognition is to produce game theory theorems formalizing useful insights and not to solve the urgent problems of globalization and the temptation of protectionism. Sometimes, I wonder if it would be better to put an end to this prize which is doing more harm than good if the game theory trend continues.

More on the Gary Kaplan Prosecution and his WTO Defense

Following-up on my earlier post, first, as of a couple weeks ago Gary Kaplan was still in jail, with bail having been denied.

Second, how long before they make a Law and Order episode about this case?

Third, here is a brief overview of some of the arguments he makes related to the WTO Gambling ruling:

• Under Charming Betsy, if possible, federal laws, including criminal statutes, must be read so as not to conflict with the international obligation, and the Wire Act can be so construed.  First, the Wire Act may be read so as not to have an extraterritorial application.  In this regard, there is a strong presumption that statutes, including criminal statutes, do not operate extraterritorially.  Second, under Charming Betsy, the Wire Act may and must be construed so as not to apply to internet gambling: "The internet did not even exist in the early 1960s when the Wire Act was enacted; it surely was not what Congress intended to address."
• The Charming Betsy doctrine may be thought of as an expression of a broader principle of international comity, which itself mandates dismissal of the Wire Act charges. Under that principle: "U.S. courts should strive to the fullest extent possible in the application of domestic law to show due respect for the fundamental interests of other nations in matters of legitimate concern to them.45 By virtue of international comity, U.S. courts avoid interpretations or applications of domestic law that do unnecessary violence to foreign countries’ important interests. ... International comity strongly counsels a showing of respect by U.S. courts for rulings of the WTO Appellate Body when construing national legislation, particularly where that legislation has been clearly and authoritatively condemned, at least as applied to situations governed by WTO law. Such is precisely our case."
• "[G]iven the completion of the dispute resolution proceedings, the WTO Dispute Settlement rulings in the gambling case are self-executing, and Kaplan may rely upon them. ... The principal reason why the substantive provisions of the WTO Agreement are not self-executing and do not give a direct cause of action to individuals before domestic courts is the existence of the elaborate WTO Dispute Settlement procedures. When a State is alleged to have violated its international legal obligations under the WTO is made, that State may contest both the facts and the interpretation and application of WTO law. It may take its case before a Panel. It may appeal an adverse position of the Panel to the Appellate Body. It may seek to persuade other members of the Dispute Settlement Body not to adopt the ruling of the Panel and Appellate Body. It may be given time to implement the adverse ruling. It may contest any challenge to its attempted implementation before a Compliance Panel and appeal any decision of such Panel to the Appellate Body. It would be wrong for a domestic court to apply directly a substantive provision of the Agreement if in doing so such court would short-circuit the dispute settlement procedures with all the protections they give a member of the WTO. But here those procedures have been completed and all those protections have been enjoyed"

The conclusion:

"The government’s attempted use of these statutes to prosecute Kaplan – and to send a signal to others engaged in the provision of internet gambling services from nations that are members of the WTO – represents a violation of obligations the United States has assumed under WTO/GATS. The prosecution violates U.S. treaty obligations, international principles of comity, and domestic law. The indictment in its entirety must be dismissed."

A WTO Decision as a Defense in a Domestic Criminal Proceeding

Now this is interesting.  I haven't had a chance to digest it fully, but I thought it worth noting for everyone now.  I may come back to it once I've had a chance to think about it more.

A few months ago, the FBI arrested BETonSPORTS.com founder Gary Kaplan on charges of racketeering, conspiracy and fraud, in relation to the company's web site gambling operations.  Kaplan now argues that the WTO panel/AB rulings in the Gambling case should get him off:

Defendant Gary Stephen Kaplan moves, pursuant to Rule 12(b) of the Federal Rules of Criminal Procedure,1 to dismiss the charges against him based upon treaty obligations and related principles of domestic and international law. The treaty obligations are those the United States has assumed under the General Agreement on Trade in Services (“GATS”) and the Dispute Settlement Understanding (“DSU”) which applies to the GATS. These obligations, recognized by both the authoritative dispute resolution bodies of the World Trade Organization (“WTO”) and by U.S. law, foreclose this prosecution, requiring dismissal not only of the Wire Act charges, but of every count that seeks to penalize Kaplan for activities related to the provision of cross-border remote gambling services, that is to say, all of the charges in the Superceding Indictment.

There is talk about Chaming Betsy, international comity, and the self-executing nature of WTO rulings, among other things.

Call for Papers: Asian Journal of WTO and International Health Law and Policy

National Taiwan University's Asian Journal of WTO and International Health Law and Policy is calling for papers for its March 2008 issue. Submission deadline is November 20, 2007.  More information here:  http://www.law.ntu.edu.tw/center/wto/05publications.asp?tb_index=25

Free Trade Funnies

Check out Jon Stewart on free trade and globalization (you have to wait through a short commercial).

More Gambling Submissions

The Antigua legal team has posted some new documents related to the Article 22.6 arbitration in the Gambling dispute, including a written submission which, among other things, responds to some of the U.S. arguments.  One important aspect of the parties' disagreement is the following.  In arguing for a $500,000 figure for nullification or impairment, the U.S. relied on what it called the "WTO’s own published figures."  Antigua responds by saying, in essence, that those figures are meaningless because they do not include gambling:

102. The basic problem with the alternative data sources used by the United States in its submission is that those sources do not take into account the Antiguan remote gambling and betting industry. The difficulty begins with the information provided by the Eastern Caribbean Central Bank (the “ECCB”), which in fact appears to be the source for the data compiled both by the International Monetary Fund (the “IMF”)126 and by the WTO itself.127 However, the ECCB has expressly confirmed to Antigua128 that the data compiled by it does not include “revenues earned by operators who are licenced to engage in interactive wagering and gaming” for the same basic reasons mentioned by Antigua in the Methodology Paper–the operators do not report it.129

103. As a result, all of the alternative data relied upon or suggested by the United States in its submission to the Arbitrators is by and large completely useless in determining the level of nullification or impairment.130

So, as if the case were not difficult enough already, the task for the arbitrators is to quantify nullification or impairment with regard to trade that is not being reported.

The State of the Doha Round

The state of the Doha Round is not good.  Consider the following.

From the U.S.:

"U.S. officials lashed out at India, Brazil and other large developing nations, saying that their proposal to exempt a broad range of industrial goods from tariff cuts could blow up continuing global trade negotiations."

From Brazil:

"Brazil on Wednesday criticized what it called an 'irrational' U.S. position in struggling global trade talks, a day after Washington said a liberalization pact was in peril because developing countries were refusing to open up their manufacturing markets."

From the WTO:

"The WTO is expected to break its own rules by not holding a ministerial conference in 2007 given the low chances of securing a global trade deal by the year's end, trade sources said Tuesday."

I have a hard time figuring out how much of this is just hard-line negotiating and how much is the result of a general lack of enthusiasm for reaching an agreement.

The Republicans and Free Trade

A recent poll suggested that Republican voters are less enthusiastic about free trade than in the past:

By a nearly two-to-one margin, Republican voters believe free trade is bad for the U.S. economy, a shift in opinion that mirrors Democratic views and suggests trade deals could face high hurdles under a new president.

...

Six in 10 Republicans in the poll agreed with a statement that free trade has been bad for the U.S. and said they would agree with a Republican candidate who favored tougher regulations to limit foreign imports.

That certainly does not bode well for future trade agreements.  However, I was struck that in today's Republican debate, the leading candidates seemed to be strong free traders:

Fred Thompson:  "in terms of turning our back on free trade, that's not the direction to go in. It's meant too much for our country. And every country in the history in the world that's ever turned its back on free trade has suffered for it as a consequence."

Rudy Giuliani: "the four trade deals with Peru, Colombia, Panama, South Korea that are in front of Congress right now, which the Democrats are trying to block, would be good deals for the United States."

And when asked whether a Dubai company should be able to buy part of the NASDAQ, all but two said yes.

My guess is that even if it's true that many Republican voters are wary of free trade, this is not an issue that particularly motivates them, and thus the candidates are not too worried about losing votes over it.

SIEL Inaugural Conference - Call for Papers

CALL FOR PAPERS AND PANELS - The Inaugural Conference of the Society of International Economic Law: New Horizons of International Economic Law The Inaugural Conference of the Society of International Economic Law (SIEL) will take place at the Graduate Institute of International Studies in Geneva from 15-17 July 2008 (www.hei.unige.ch).  From the call for papers:

This conference aims to explore the many different faces of “international economic law”, in order to reflect critically on its past, present and future paths. It will seek to explore issues concerning the content of the discipline, its evolution as a distinct field, and its relation with other fields of study. Given that the aim of the Society includes fostering research in the area of IEL and promoting cooperation among all parts within the field, the SIEL inaugural conference will also be a forum for those inside and outside academia to share pedagogical and research methods, as well as to explore greater cooperation among the many different constituencies of the field.

      

We welcome papers and panels on any topic related to the conference, including:

• the three traditional pillars of “public” IEL: trade, investment, and monetary policies;
• the relationship between these pillars, and between these pillars and other branches of law;
• the influence of disciplines such as economics, political economy, and others on international economic law;
• “comparative” international economic law, focussing on the ways in which international economic law interacts with laws, institutions and actors at the domestic level;
• the “geographies” of international economic law, relating to the role of international economic law in different parts of the world;
• the roles that law and legal practices play within “international economic governance”;
• methods and trends in the teaching of international economic law, both in universities and to the broader public;
• interactions between scholars, practitioners, government officials and civil society groups active in international economic law; and
• topical issues within international economic law.

We are particularly interested in integrating new voices with more established figures in the field, and welcome works in progress from young or new scholars reflecting the conference’s broad theme.

More details here.

The Costa Rican CAFTA Vote: Yes!

I think the Costa Rican vote on CAFTA is pretty close to decided.  Reuters reports that with "ballots from nearly 74 percent of polling stations" counted, "[a]lmost 52 percent of voters backed the Central American Free Trade Agreement, or CAFTA, while 48 percent voted against it."  And a Costa Rican friend of mine (and CAFTA supporter) emails "We won the referendum!"

I must say that I had my doubts based on earlier reports.  This older Reuters report noted that "[a] poll last week in La Nacion newspaper showed Costa Ricans rejecting the trade deal by 55 percent to 43 percent."  And Global Trade Watch's blog just recently said that "[at about 5:30 PM EST, a leader from the "no" campaign predicted a 10% point win, and said that there had been 70% turnout."  But these predictions seem to have been off the mark.

If this is, in fact, the result, then we won't have to test whether the Bush administration would make good on its "threat."

Professor Don McRae to Serve as Interim President of SIEL

For those who have not already seen it, here is a posting from the new Society of International Economic Law, with which a number of this blog's contributors (including myself) are involved:

SIEL is pleased to announce that Don McRae has agreed to serve as the Interim President of the SIEL. Professor McRae holds the Hyman Soloway Chair in Business and Trade Law at the University of Ottawa, Canada, and was formerly the Dean of the Common Law Section of the Law Faculty.  Professor McRae has held significant positions in both the public international law and international economic law arenas, including serving as:  a member of the International Law Commission;  Canada’s chief negotiator in the Pacific Salmon Treaty renegotiations; Chair of the first Canada-US FTA state-to-state dispute panel; Chair of the first US-Israel FTA dispute panel; and as a Member of the first NAFTA state-to-state dispute panel.  Professor McRae is also Editor-in-Chief of the Canadian Yearbook of International Law, and holds degrees from Otago University in New Zealand and from Cambridge.  In addition, Professor McRae has also served as a President of the Canadian Council on International Law, as a Member of the ASIL Executive Council and as an ASIL Counsellor.

As Interim President, Professor McRae will guide the Founding Committee in their efforts to launch the society around the world.  SIEL will benefit tremendously from his experienced hand.

It is expected that Professor McRae will serve as Interim President until shortly after the formal establishment of the SIEL, at which time SIEL members will then have the opportunity to participate in the selection of the SIEL President, in accordance with a more permanent governance structure that will be set up at that time.

"the United States has never before confronted the question of extending unilateral trade preferences to a country that has rejected a reciprocal trade agreement"

Is the quote in the title to this post a threat to Costa Ricans voting tomorrow on approval of CAFTA?  It does sound a bit like one, with the suggestion that if CAFTA is not approved, unilateral trade preferences to Costa Rica might not be renewed.  Is such a threat likely to have the desired effect?  Would it really be followed through?

How to Save the Doha Round

Susan Schwab, the US Trade Representative, called for clear “pledges” from major developed and developing countries to negotiate within the range of current draft texts (on agriculture and industrial goods) to deliver the Doha deal. (“How flexibility can salvage the Doha round,” Financial Times, Oct. 4) Schwab observed that the deal is “within reach” but leading members should come out of “comfort zones” for a successful conclusion. She criticized that “some have signaled an unwillingness to negotiate within the text’s ranges or a desire to nullify market-opening commitments through loopholes.” In addition, she implied that the US would desire a “comprehensive” deal including services and other crucial areas, rather than being satisfied with the “Doha-lite.” Despite all this good intention, it seems that the deal would not go further without the U.S.’ genuine offer to substantially cut trade-distorting agricultural subsidies to the level close to last year’s spending (11 billion dollars). Developing countries have demanded a number of low teens. Also, it might be questionable at this point that the Doha negotiators attempt to bite off more than they could chew. The U.S. might want to legalize the zeroing practice in this negotiation. We only have two major, workable draft texts right now: one for agriculture and the other for industrial goods. But, it has truly been a long and winding road before we could achieve only this much. A reasonable deal might be better than no deal. After all, the show must go on.

TRIPS Agreement in the Domestic Law of EC Member States

This sounds like a big deal to me, but it has been a while since my one EC law course, so perhaps this ruling by the European Court of Justice is not as important as it seems:

it is not contrary to Community law for Article 33 of the TRIPs Agreement to be directly applied by a national court subject to the conditions provided for by national law.

I suppose it will only really be a big deal if the national court actually decides to apply the TRIPS Agreement directly.

More background here (registration required).

Sealed with a Complaint

As Bryan mentioned here, Canada's complaint about Belgian and Dutch bans on seal products is now official.  The consultations request is here.

It might be better for the system if the complaint did not go forward, but if it does there could be some very interesting issues explored.  First, there are some classic GATT issues.  Canada has made claims under GATT Articles I, III:4, V and XI:1.  The issues I would most like to see discussed by a panel are: 1) how Article III:4 applies in the case of a general ban on products; and 2) how Article III:4 relates to Article XI:1 in the context of this kind of ban.  And, of course, we could see some novel issues raised under GATT Article XX.

Second, there are some issues under the TBT Agreement that have less history.  Here, Canada has made claims under Articles 2.1 and 2.2.  Article 2.1 is just MFN and NT together, but Article 2.2 refers to "unnecessary obstacles to international trade" and measures that are "more trade-restrictive than necessary to fulfil a legitimate objective."  Part of me really wants to see what a WTO panel will do with these provisions in the context of Article 2.2, but another part is afraid to find out.

ADDED: An astute blog reader pointed out to me that the MFN and NT obligations in TBT 2.1 do not have the equivalent of a GATT Article XX exception, and this could affect the interpretation of 2.1.  An excellent point.  It could make the 2.1 interpretation as interesting as the 2.2 one.

Call for Papers - Regional Trade Agreements

The Public Law Review, one of the student-edited journals at Saint Louis University Law School, is organizing a symposium in Spring 2008 on regional trade agreements and their social, political, and environmental  implications.  The title is:  The Changing Tide of Trade: Social, Political, and Environmental Implications of Regional Trade Agreements.  From the call for papers:

In its XXVII issue, Public Law Review calls for an assessment of the social, political, and environmental implications of regional trade agreements.  Issue No. 1 of Volume XXVII will feature articles from the symposium. 

The World Trade Organization (WTO) was established in 1995 as an international organization with the goal of facilitating trade among nations by breaking down trade barriers pursuant to an agreed set of rules.  Members of the WTO agree to adhere to the package of multilateral trade agreements negotiated in the Uruguay Round of GATT negotiations, which took place from 1986-1994.  There are ongoing negotiations within the WTO on issues that were unresolved after the Uruguay Round, as well as negotiations on implementation of the Doha Development Agenda, which emerged from the Doha Round of multilateral trade negotiations in 2001.  In addition, the Dispute Settlement Body of the WTO serves as a forum for the resolution of trade disputes among Members.  From time to time, new Members are accepted into the WTO through the process of accession.  There are currently 151 members of the WTO.

As WTO membership has grown, interests have diversified, and negotiations have become more cumbersome, countries have resorted to establishing regional trade agreements (RTAs).  RTAs focus on the interests of countries in a particular region or group of regions, and not on global interests.  By 2010, the WTO estimates that nearly 400 RTAs will be in effect.  RTAs allow for more efficient trade negotiations and permit countries greater freedom to choose their trading partners, trade deals and conditions of trade.  However, since RTAs operate outside the multilateral WTO system, many questions as to how the transition from a multilateral to a regional trading system will shape the way we think about social, political, and environmental issues arise.  Some of these questions include, but are not limited to, the following:  How will trade relations between developed and developing nations change?  Will RTAs become a tool for implementing the policy agenda of the powerful?  What social, environmental, and political issues will arise under RTAs?  Will RTAs hamper attempts to develop global standards on labor rights, women’s rights, environmental protection, and other social issues?

            With these questions in mind, we seek papers and presentations that examine the effects of regional trade agreements.  The symposium will consist of three panels.  Some suggested topics pertaining to each of the three panels are set forth below, but proposals on other topics related to the theme of the symposium will be considered.

·        Recent RTAs in Legal, Economic, and Political Context

o       One panel will focus on the motivations of national governments in entering into RTAs and on recent case studies.

o       We would like speakers on this panel to be prepared to engage in a round table discussion of both the advantages and disadvantages of RTAs from a legal, economic, and political perspective.

o       Questions this panel could address include, but are not limited to, the following:

§         What do governments gain from pursuing RTA negotiations?

§         Will the increase in the number of RTAs undermine the achievements of the WTO and ongoing negotiations within the WTO?

§         Have recent RTAs resulted in trade creation or trade diversion within the region?

§         Will regional agreements result in limiting access to RTA markets based on political ideology, national religion, or stance on terrorism?

·        Implications of RTAs:  Issues of Social Justice, Development, and Human Rights

o       A second panel will examine the interplay between RTAs and social justice, development and human rights.

o       Questions this panel could address include, but are not limited to, the following:

§         What are the impacts of RTAs on the distribution of wealth between developed and developing countries and within developing countries?

§         Will RTAs foster or hinder the process of sustainable development on a regional level?

§         Will RTAs play a role in shaping the rights of women, children, minorities, and the poor?

·        Implications of RTAs:  Environmental, Labor, and Other Social Issues

o       A third panel will address the extent to which RTAs will impact environmental standards, labor standards, and other areas of social concern.

o       Questions this panel could address include, but are not limited to the following:

§         What impacts will RTAs have on environmental law and the ability of countries to impose higher environmental standards on their trade partners?

§         What impacts will RTAs have on labor and employment law and the ability of countries to impose higher standards in those areas on their trade partners?

§         Are the criticisms leveled at the NAFTA environmental and labor side agreements equally applicable to new RTAs that the United States has entered into or is attempting to negotiate?

Presentation at the conference is contingent upon completion of a publishable paper; likewise, publication of a paper is contingent upon presentation at the symposium.  Submissions for consideration may either take the form of short commentaries or longer law review articles.  Decisions for presentation and publication will be based upon a 300 word abstract.  Those interested should submit an abstract to the Executive Editor in Word or PDF format no later than December 17, 2007. Submissions will be reviewed in December and you can expect to be notified of our decisions by the end of January, 2008.  If applying from abroad, please take into account necessary time for visa processing.  We suggest you submit your abstract at an earlier date if you require a visa.  Symposium participants will be chosen through both the submission process outlined above and through invitation.  The conference is scheduled for Friday, April 4, 2008.  The conference will take place during Atlas Week at Saint Louis University, which is a week long series of events focusing on international issues.  Full drafts of accepted papers should be submitted by May 1, 2008.

Abstracts should be submitted to:

3700 Lindell Boulevard
St Louis MO 63108
USA
Email: fwrigley@slu.edu  Phone: 618.920.3326

Falon Wrigley

Executive Editor,

Public Law Review
Saint Louis University School of Law