International Economic Law and Policy Blog

Ben Muse on Cuba Trade and the U.S.-Korea FTA

I wanted to point out a couple recent Ben Muse posts.

First, he has one today arguing that it is "time to move away from the Cuban trade embargo," and also describing various Presidential candidates' position on the issue.

Second, he had a post a little while back asking whether the U.S.-Korea FTA would undermine Korean anti-smoking efforts:

The Koreans generally impose 20% tariffs on unprocessed tobacco and 40% tariffs on processed tobacco products - suggesting that the tariffs play a role in encouraging domestic manufactures as well as in smoking policy.  Processed and unprocessed tobacco products alike fall into the "staging category" G, which means that tariffs will be removed in ten equal annual increments, starting the day the agreement enters into force, eventually going to zero.

[The Center for Policy Analysis on Trade and Health (CPATH)] thinks the drop in tariffs will reduce domestic Korean prices and encourage increased tobacco consumption.  Note that increased competition in the Korean market may also be associated with increased marketing efforts.

I suspect that, all other things equal, that might happen, noting that: (a) there would be some offsetting reductions in domestic production and in imports from other countries, (b) some of the impact on U.S. imports may represent a shift from unprocessed to processed product. 

Korea would presumably be free to impose non-discriminatory sales taxes on tobacco products to offset any price impacts and restrain consumption.  I assume it could also limit advertizing and promotional efforts in non-discriminatory ways.

[The Center for Policy Analysis on Trade and Health (CPATH)] thinks the drop in tariffs will reduce domestic Korean prices and encourage increased tobacco consumption.  Note that increased competition in the Korean market may also be associated with increased marketing efforts.

I suspect that, all other things equal, that might happen, noting that: (a) there would be some offsetting reductions in domestic production and in imports from other countries, (b) some of the impact on U.S. imports may represent a shift from unprocessed to processed product. 

Korea would presumably be free to impose non-discriminatory sales taxes on tobacco products to offset any price impacts and restrain consumption.  I assume it could also limit advertizing and promotional efforts in non-discriminatory ways.

UN sanctions: are authorizations sufficient? The House of Lords speaks

On 12 December the House of Lords delivered its long-awaited judgment in Al-Jeddah, which is to do with the application of the ECHR to a person detained in a UK detention facility in Iraq. One of the issues concerned the scope of Article 103 of the UN Charter (which states that UN obligations override all other agreements). The HL held that this provision applies not only to UN obligations but also to UN authorizations.

This has direct relevance to Article XXI(c) GATT, which allows 'any action in pursuance of [a WTO Member's] obligations under the United Nations Charter for the maintenance of international peace and security.' According to the HL reasoning, this provision would now be triggered by a UN sanction that merely authorizes trade sanctions - as most do.

Two other points. If this question arose in WTO dispute settlement proceedings, a WTO panel/AB would need to decide it, as a necessary interpretation of a WTO provision. But doing this would also be 'determining rights and obligations outside of the covered agreements', which the AB said in Soft Drinks (para 56) that it would not do. This indicates that the AB's statement in this case might be in need of some refining. Second, this case provides further support for the argument (put forcefully by Joost) that, in terms of treaty conflicts, rights can conflict with obligations, though with the interesting spin that the term 'obligation' is interpreted also to mean 'right'.