International Economic Law and Policy Blog

Call for Papers - ASIL IEL Interest Group Research Colloquium - UCLA, Feb. 13, 2009

As many of you know, the American Society of International Law International Economic Law Interest Group is holding its Biennial Conference in DC in two days. This is a good time to announce a new initiative: the Interest Group Research Colloquium that will be held at UCLA on February 13, 2009. This will be a non-thematic, one day academic workshop in which unpublished papers selected on a double-blind basis by the conference committee (headed by Prof. Richard Steinberg of UCLA) will be presented and discussed. This is a great opportunity for scholars, both young and established, to have their current work debated in an informal academic environment. More details are in the call for papers (Download ucla_call_for_papers.pdf ), and we encourage all researchers engaged in any field of international economic law to submit proposals within the December 8, 2008 deadline.

T. 

Trade Versus the Environment: More on Biofuels PPMs

Updating this old post, there has apparently now been a threat of a WTO complaint against proposed EU biofuel restrictions.  Here are the restrictions:

[The EU] intends to introduce new restrictions defining what type of land is suitable for creating biofuels. If the plans were to go ahead, fuels coming from what Brussels deems to be ecologically unsound sources would not be purchased by EU member states.

Here's the trade problem:

Argentina, Brazil, Colombia, Malawi, Mozambique, Sierra Leone, Indonesia and Malaysia have written a letter of complaint to the EU, criticising these new proposals, and threatening action unless Brussels reconsiders:

“They impose unjustifiably complex requirements on producers,” said the draft letter, which was obtained by the news agency Reuters. “Some of our countries don't exclude the possibility of defending their rights in the World Trade Organisation, as a last resort.”

The biofuel producers say that this legislation amounts to a double standard. European nations have already expanded into their wild areas so as to improve their overall quality of life, so Europeans have no right to stop other countries from doing the same, they argue:

“Provisions relating to land-use change will impinge disproportionately on developing countries, where there are stocks of undeveloped arable land which can be used for biofuels production,” the letter said.

That's some very diplomatic language.  First of all, it is worth noting that only "some" of the listed countries would pursue a complaint.  In addition, they "don't exclude the possibility" of a WTO complaint, and even then it's only a "last resort."   This suggests to me that a complaint is not all that likely.  On the other hand, if the EU goes ahead with the restrictions without making any concessions, a complaint may be the only option.  It would make for some very interesting legal interpreations, that's for sure.

When I read about issues like this, the question I always ask is, who was behind this measure?  Here, the two likely candidates are:  (1) environmentalists who worry about destroying the environment in developing countries and (2) domestic biofuel industry folks who want to keep out foreign competitors.  How much of a role did each one play?  To me, this is a crucial issue.  Unfortunately, I can never find out the answer to these kinds of questions.

 

Administrative Law Tools and the “Mood” of the Appellate Body decision in the United States—Continued Suspension of Obligations in the EC-Hormones Dispute

Here are some thoughts on the Appellate Body decision in the case

United States

—Continued Suspension of Obligations in the EC-Hormones Dispute. It is a remarkable decision that has a real “administrative law” feel, demonstrating the value of the Global Administrative Law project of Kingsbury, Stewart and Krisch in which many of us have participated. The opinion carefully addresses such issues as standard of review, burden of proof and due process.

 

What is striking about the decision is its “mood,” to use the term used by Justice Frankfurter in a famous US Supreme Court case (Universal Camera Corp. v NLRB, 1951) which addressed the standard of review of a court as regards an administrative agency’s factual findings. In Justice Frankfurter’s words, a court must respect that mood “as a standard for judgment and not as a body of rigid rules.”

 

In the Continued Suspension case, the Appellate Body expresses a mood that a panel should adopt in reviewing a national SPS measure in terms of whether it is based on a risk assessment or constitutes a precautionary measure where there is “insufficient” relevant scientific evidence (respectively under Articles 5.1 and 5.7 of the SPS Agreement). The Appellate Body effectively requires the panel to adopt a more deferential mood.

 

The context of WTO judicial review is of course different than in national judicial review of administrative law measures. In national administrative law, a court balances due deference to agency expertise with the need to hold an agency accountable to the parties and the broader public. Judicial review at both the national and international levels uses requirements of transparency, due process and reasoned decisions to make administrative decisions more accountable. Yet in democratic national settings, such transparency mechanisms are linked to democratic political processes. In national settings, the agency is to take account of national legislation which reflects the interests of national constituencies, and it is checked by an elected executive and legislature, as well as courts. In the international context, in contrast, national legislatures and executives are subject to no democratic political accountability checks to ensure that their actions are accountable to non-citizens.

 

The WTO SPS Agreement provides for some accountability checks to protect from latent discrimination against outsiders.  The requirement of a risk assessment, indirectly, is one such check, as it demands that decisions be based on public reason. There are, in addition, related accountability checks, such as the requirements that SPS measures be no more trade-restrictive than required to achieve the government’s decision as to the appropriate level of protection (Article 5.6) and that they “achieve consistency” (in Article 5.5), but these are checks purely of judicial review. Many commentators point to these provisions as offering more direct and thus better accountability checks than those under Article 5.1 in which a panel reviews scientific determinations.

 

Panels have focused on Article 5.1, however, because they can appeal to “science” instead of being seen as themselves engaging in judicial balancing of the adverse trade impacts and the importance of the policy aim, as under the test that a measure be the “least trade restrictive” alternative measure to meet a policy objective. If panels respond by engaging in less intrusive scientific review under Article 5.1, it will be of interest to see whether greater attention is given to the provisions of Articles 5.5 and 5.6, among others.

 

The panel’s interpretive choices inevitably have institutional implications.  Interpretive choice in fact equals institutional choice, involving different allocations of authority to decide a matter. The concept of appropriate deference entails one such institutional choice.  The institutional choices, however, are each imperfect and beset by tradeoffs, and are thus not easy.  Nonetheless such choices are and must be made. See Gregory Shaffer, A Structural Theory of WTO Dispute Settlement: Why Institutional Choice Lies at the Center of the GMO Case (forthcoming in 41:1 NYU Journal of International Law and Politics 1), at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1090293.

 

USTR Candidates

From Reuters:

Daniel Tarullo, a Georgetown University law professor who has advised Obama on trade issues, is thought by many Washington lobbyists to be to a top candidate for the job.

Tarullo worked for former President Bill Clinton in the 1990s -- first as an assistant secretary of state for economic and business affairs and later as a White House adviser.

Other possible candidates include Mike Wessel, a longtime aide to former House Democratic Leader Richard Gephardt and current member of U.S.-China Economic and Security Review Commission, a congressional watchdog group.

Lael Brainard, an international economics adviser in the Clinton White House now at the Brookings Institution, spoke for the Obama campaign at a debate on trade policy, prompting speculation she could be in line for an administration job.

Several argue Obama should tap a politician like former Rep. Cal Dooley, a California Democrat, since working with Congress would be a big part of the job.

However, Dooley's support for Bush administration trade deals makes him an unpopular choice with labor groups.

Some business lobbyists want Obama to consider veteran U.S. trade negotiators Peter Allgeier and Rufus Yerxa for the post.

Allgeier is the current U.S. ambassador to the World Trade Organization in Geneva. Yerxa was a deputy U.S. trade representative in the Clinton administration and has been a deputy director general of the WTO since 2002.

"Either one of those would be fantastic choices, as would some of the other names bandied about," said Doug Goudie, director of international trade policy for National Association of Manufacturers.

That includes Stuart Eizenstat, who held the job of deputy Treasury secretary and other senior economic posts in the Clinton administration, Goudie said.

We may not know for a while, though:  "typically the job of U.S. trade representative is often one of the last to be filled."

Change is coming ...

... to U.S. trade policy.  It is not clear exactly what this change will look like, but no doubt we will spend a lot of time on this blog talking about it. Here are some of the issues I'll be watching for:

--  What will a NAFTA renegotiation look like?

--  How will an Obama administration proceed with FTAs that are currently being negotiated?  Will it go ahead with any new FTAs?

--  Will the enforceable labor and environment provisions that are now in some FTAs be enforced?

--  Will there be any bold new proposals for getting the Doha round completed?

--  How tough will an Obama administration be on China?  What specific actions will be taken with respect to alleged Chinese currency manipulation?

--  Will an Obama administration be significantly more amenable to imposing trade remedies?

--  With all the talk of increased trade enforcement and additional resources for USTR, what are some of the new WTO complaints that will be brought?

--  Will there be a loosening of the Cuba trade sanctions?

--  What kind of action will an Obama administration take against carbon emissions and how will imports be affected?

As a final note, congratulations to Barack Obama on this truly historic event!

Lamy Seeks a Second Term as DG

From his letter to the General Council Chair (scroll down to page 3):

During the last three years I believe that I have done my best to serve these objectives with dedication and conviction. And although today we are closer to our goal, much remains to be done, not only to conclude the Doha Round negotiations, but also to ensure a better functioning of the multilateral trading system. We have seen the Doha negotiations move closer to the finish line; we have seen the Aid For Trade agenda take a prominent place as a necessary complement to trade opening; we have welcomed five new members into the organisation; we have worked to enhance the participation of all members, in particular the poorest, in the activities of the organisation; we have worked to improve the WTO's public image; we have consistently worked to preserve the integrity and legitimacy of the dispute settlement mechanism; we have built new bridges with many other international organisations, starting with the UN family; we have seen the start of the works to refurbish and expand the WTO premises; and last but not least, we have worked to enhance the motivation and professionalism of the secretariat while being mindful of costs for the members. We have seen all of this and much more but it is undeniable that, today, the tasks ahead of us remain challenging, in particular in view of the current world financial turmoil.

All of this, and in particular the Doha Round, will not materialise without a concerted effort by all members, without the capacity to compromise in pursuit of a more open and fairer trading system. For my part, I stand ready to continue to serve the WTO for a second term and to make a contribution to reinforcing multilateralism and development.

Nominations must be received by December 31, 2008.  Lamy is clearly a very strong candidate.  However, it seems likely that we will see some other good people nominated, in part maybe to lay the groundwork for getting the position some time in the future.

UPDATE:  India is "likely" to support him.

Copyrighting International Organization Documents

The WTO has always been great about letting us post official documents on WorldTradeLaw.net.  We ask permission and they always grant it.  However, I see WTO documents in various other places on the internet as well, and I would guess that at least some of these web sites have not asked permission before posting the documents.  But I have not heard of the WTO ever raising concerns about the practice.  By contrast, Intellectual Property Watch reports on some issues that have arisen with the WCO:

In an unusual policy for an international organisation, the World Customs Organization imposes copyright over every document its bodies produce, even agendas, which means that no document can be reproduced without the organisation’s express consent.

But now some member governments are questioning this practice, which they say was intended only for the organisation to protect the rights in publications made for sale or containing proprietary information, and is now blocking access to information about the organisation’s work.

I know that related issues have come up with domestic courts.  It is hard to imagine that the eventual outcome will be anything other than a very limited scope for copyright of international organization documents, but it may take some time to get there.

Muse on Congressional Races and Obama's Trade Policy

Ben Muse has been examining the role of trade in a number of Congressional races.  The following link shows a numer of his posts in this regard (with a couple other trade politics related posts thrown in): http://benmuse.typepad.com/custom_house/election_2008/

Also via Muse, I came across this recent trade policy statement by Obama:

My trade policy rests on that same belief in change. Our country can benefit from trade, but I will
insist on a trade policy that will work for all Americans. That means opening markets abroad for our manufactured exports, and including enforceable labor and environmental standards in free trade agreements. It also means strong enforcement of our trade remedy laws at home and of our trade rights abroad. I will make clear the priority I attach to enforcement and increase the resources of the Office of the United States Trade Representative devoted to this mission. When domestic industries make use of trade remedy laws that call for Presidential determinations, such as the section 421 provision applicable to imports from China, I will decide those cases on their merits, not on the basis of an ideological rejection of import relief like that of the current Administration.

A fair trading system requires fairness in each country’s foreign exchange practices. The massive
current account surpluses accumulated by China are directly related to its manipulation of its currency’s value. The result is a large imbalance that is not good for the United States, not good for the global economy, and likely to create problems in China itself. China must change its policies, including its foreign exchange policies, so that it relies less on exports and more on domestic demand for its growth. That is why I have said that I will use all diplomatic means at my disposal to induce China to make these changes.

The trade policies I have just described are important for all American industries, including yours.  But I am especially aware of the trade challenges faced by those working in our textile industries. When safeguards on textile imports from China expired in 2004, imports surged and thousands of jobs were lost. I support Chairman Rangel’s call for the United States International Trade Commission to monitor textile imports from China. As President, I would use monitoring to help ensure that imports from China do not violate applicable laws and treaties. I support the requirement in the Berry Amendment that the Defense Department procure only textiles made in the United States. I also support inclusion of the yarn forward rule in free trade agreements, to ensure that countries with which we enter special trade relationships do not become conduits for source yarn outside those countries.