International Economic Law and Policy Blog

Appellate Body Secretariat Job

There's a job opening in the Appellate Body Secretariat. These don't come along too often, so take advantage of the opportunity!

Vacancy Notice No.: EXT/F/15-36    Title: Dispute Settlement Lawyer    Grade: 9    Contract Type: Fixed-term    Starting Salary: CHF 134,940 net per annum (approximate) Issued On: 14 July 2015    Original published date: 14 July 2015  (39 day(s) until closing date)    Republished (Currently accepting applications)    Application Deadline (CET): 8 September 2015    Division:   Appellate Body Secretariat Duration:  Two years with the possibility of extension

Other Conditions: In accordance with WTO Staff Regulations and Staff Rules and WTO Pension Plan Regulations.  The World Trade Organization offers an attractive compensation package including an annual net salary (subject to mandatory deductions for pension contributions and health insurance), dependency benefits, pension plan, health insurance scheme, separation grant and 30 days annual leave. Benefits for internationally recruited staff may include travel and removal expenses on appointment and separation, installation grant, education grant, rental subsidy and home leave.  Additional information on the compensation package is provided on the WTO website:  http://www.wto.org/english/thewto_e/vacan_e/comp_package_e.pdf

The Secretariat of the WTO is seeking to fill a position of Dispute Settlement Lawyer in the Appellate Body Secretariat. The Appellate Body Secretariat is responsible for delivering advice and assistance to the Appellate Body in connection with all aspects of appeals of panel reports. The Appellate Body Secretariat also advises and supports arbitrators in proceedings to determine the reasonable period of time, and, occasionally, provides advice and/or information to the Director-General, other WTO Divisions, and WTO Members, as appropriate.

General Functions  1. Deliver substantive legal advice and assistance to Appellate Body Members and other lawyers and serve as team leader in less complex disputes or as co-leader in complex disputes. 2. Conduct or direct research on complex and/or novel legal issues and direct the preparation of legal opinions on legal issues by more junior lawyers in the context of appeals. Deliver legal advice and assistance to adjudicators ensuring consistency with WTO law and jurisprudence while taking into account systemic implications. 3. Assist Appellate Body Members generally to stay abreast of dispute settlement and other WTO activities, including through the preparation of analysis and materials for internal meetings and reporting on the activities of relevant WTO bodies. 4. Deliver technical assistance and training on the the WTO Agreements within the Appellate Body Secretariat's areas of responsibility. Contribute to the development of training materials, internal research materials, and WTO publications.

REQUIRED QUALIFICATIONS

Education:  An advanced university degree in law, including studies in international trade law and public international law. Studies in international economics would be an advantage, as would a licence or eligibility to be licensed to practice law in at least one municipal jurisdiction.

Knowledge and skills:  Thorough knowledge and appreciation of international trade law and public international law, including legal and economic principles and issues, and of adjudicative processes and practice, particularly those of the WTO. Very good knowledge of the WTO Agreements and familiarity with WTO jurisprudence. Detailed knowledge of Appellate Body jurisprudence and appeal process is expected as well as advanced skills in producing drafts and supervising legal research under very high time pressure while ensuring coherence in jurisprudence. Excellent legal, analytical and problem-solving skills and the ability to pay close attention to detail; legal drafting skills of a very high standard and the ability to draft texts reflecting various views in a coherent manner; ability to present thoughts in a logical, succinct, articulate and persuasive manner, both orally and in written form. Highly developed tact and discretion and the ability to adhere rigorously to and ensure adherence by team members and Appellate Body Members to set rules of conduct ensuring confidentiality, impartiality and an absence of conflicts of interest. Ability to conduct advanced legal research as well as analyze and synthesize often highly technical and complex information of a legal, factual and/or economic nature while working under tight deadlines; to provide constructive feedback on others' work product and draft texts; to persuade others through sound argumentation and advice while remaining flexible and open to different points of view and evolving approaches. Ability to work independently as well as cooperate with others in a diverse international setting as a leader or member of a team that works under severe time pressure and resource constraints and must produce a coherent group product; to effectively direct or co-direct the work of a dispute settlement team and guide team members in carrying out assignments by providing direction, advice, supervision, and constructive feedback, and managing all aspects of the process including time allocation and prioritization of tasks; and forge consensus with colleagues and among Appellate Body Members. To develop and maintain professional working relationships, when necessary and as appropriate, with others both inside and outside the WTO, including representatives of Members.

Work Experience:  At least eight years' relevant practical work experience as a lawyer, preferably including government, academic or private sector experience in national or international trade-related litigation. Experience working with others in teams to produce a coherent group product, and experience leading teams. Work experience with international or national courts or adjudicative bodies would be an asset.

Languages:  Excellent command of written and spoken English including a demonstrated ability to write accurately, concisely, clearly and within tight deadlines. Additional knowledge of French and/or Spanish is desirable.

Additional Information:  The position may be offered at a lower grade if the selected candidate does not fully meet all the required qualifications. Only applications from nationals of WTO Members will be accepted. The WTO may use various communication technologies such as video or teleconference for the assessment and evaluation of candidates. The recruitment process may also involve the use of various forms of testing, assessment centres, interviews and reference checks. Candidates not selected whose performance in the selection process nevertheless shows them to be suitable for a similar position may be kept on a roster for up to 18 months, and may subsequently be called upon as and when the need arises for additional resources. _____________ OFFICE(15)/60

 

The Value of the SPS Agreement

I've been reading the U.S. - Animals (yes, that's the official short title!) WTO panel report.  It's over 200 pages long, and goes into great detail about foot and mouth disease and the relevant international standards, before delving into a variety of claims under the SPS Agreement (various provisions of Articles 2, 3, 5, 6, 8 and Annex C, among others, were all in play).

I think it's fair to say that, as a result of the complex facts and many legal claims, this report is a difficult read, through no fault of those writing the report.  What it made me wonder is this: What have we gained by handling food safety disputes under the SPS Agreement?  Argentina did make claims under GATT Articles I and XI, but the Panel exercised judicial economy.  What would the report have looked like if the complaint had been brought solely under the GATT?

My sense is that a lot of the same issues dealt with under the SPS claims would have arisen under the GATT claims and Article XX defenses.  And we would have gotten to the same result.

But is it possible that the panel report based on GATT claims only would have been shorter and clearer?  With the SPS Agreement, there are lots of provisions, with lot of elements to them, and lots of interpretations.  It takes a while to get through all the claims.  With the GATT, this would have mostly come down to discrimination, with a few other elements thrown in here and there as part of the discrimination analysis.

If that's right, where does the SPS Agreement get us?  Usually, it gets us to a violation.  But could we get to the same place more quickly and clearly under the GATT?

Clarifying Something

I recently came across this:

According to US trade lawyer Simon Lester, dispute settlement between states under the TPP or TTIP would then require them to invoke their rights within the WTO and seek the jurisdiction of the WTO’s dispute settlement understanding (DSU). However, the right to invoke the DSU with its procedures and binding rulings can only arise for violations of the WTO agreement (and not external agreements) and if the dispute is of one member’s actions upsetting the balance of rights and obligations of the other under the WTO. Even if the TPP or TTIP provide for invoking the DSU, the WTO membership would have to agree, which is unlikely given complaints of delay and of the WTO’s secretariat, panels and appellate body already being overburdened.

I thought it was worth clarifying what I'm saying about this issue.

Under the TPP and TTIP -- if they are completed -- there will be a wide range of obligations, which will be enforceable through a dispute settlement procedure under the respective agreement.  Thus, any state-state complaints about TPP/TTIP violations will be heard by TPP/TTIP panels.

By contrast, the WTO has its own dispute system, which handles claims of WTO violations.

So, if you have a TPP complaint, go to TPP DS; if you have TTIP complaint, go to TTIP DS; and if you have a WTO complaint, go to WTO DS.

What I was saying is that for instances of protectionism, WTO obligations are going to be the most relevant.  The WTO has rules on trade remedies and subsidies, while TPP and TTIP will not.  And the WTO will probably continue to handle most national treatment claims.

So, for complaints about protectionism, the WTO will continue to be the main forum for trade disputes. If existing FTAs are any guide, TPP/TTIP disputes about protectionist measures will be rare.

Regulating Pharmaceutical Prices

From the NY Times:

Cost transparency bills [for pharmaceuticals] have also been introduced in California, Massachusetts, North Carolina, Oregon and Pennsylvania.

Three of the bills require disclosures for drugs costing $10,000 or more per year. The others have different criteria. Besides development costs, some of the bills would require disclosure of the costs of manufacturing, marketing and advertising. At least some of the bills also ask for a history of price increases, the profit attributable to the drug and how much a company spends in providing financial assistance to patients using the drug.

Two of the bills would allow the states to act on the information, not just require disclosure. Pennsylvania’s would allow insurers to refuse to pay for a drug if the manufacturer did not file the required report. In Massachusetts, a state commission would be able to set a maximum price for a drug if it determined that the price set by the manufacturer was significantly high compared with the benefits, costs or prices in other countries.

Would any of these state laws violate the TRIPS Agreement? Are there possible ISDS challenges?

Using Your Economic Power for Good and/or for Profit

This is from Charles Kenny and Sarah Dykstra of the Center for Global Development:

Use US trade and investment treaties to foster greater gender equality in the workplace.

US bilateral trade and investment treaties frequently contain language about labor laws and working conditions. For instance, US bilateral investment treaties include standard language that neither party shall weaken labor standards in an effort to attract investment. In addition, there is standard language mandating that neither party may restrict senior management positions on the basis of any particular nationality. Some trade pacts include specific mention of gender issues. For instance, the Peru Free Trade Agreement includes a labor cooperation and capacity-building mechanism for pursuing bilateral or regional cooperation activities on labor issues, such as “development of programs on gender issues, including the elimination of discrimination in respect of employment and occupation."

The next US president could instruct the US Trade Representative (USTR) to include support in future trade and investment treaties to pursue cooperation activities focused on the elimination of gender discrimination. In addition, future trade and investment treaties could also mandate that “neither party may require that an enterprise of that party that is a covered investment deny employment on the grounds of race, religion, gender, or sexual orientation.” Such action would not require changes to existing US legislation; instead, it would simply require that the USTR prioritize these requirements in future negotiations. 

Believe me, I'm a strong supporter of improving gender equality (and we still have plenty to do on this here in the U.S.!). But when you bring foreign policy and international relations into the mix with social policy, the issues get a little murky.  When, if ever, should we use trade and investment agreements to promote social policy change abroad? 

There is no doubt that economically powerful countries can use their power to try to coerce policy change in economically weaker countries. The U.S. can do it; the EU can do it; China can do it; and maybe a few others as well.

For example, we could demand that others adopt a minimum wage; or that they adopt "right to work" laws. We could demand that they offer greater access to abortion; or that they prohibit abortion entirely.  There are lots of options here, and the policies chosen may vary with the party that happens to be in power.

But should anyone be using their economic power this way? I understand why people would want to make the world a better place, if they have the power to do so.  But I also think there's another principle to take into account here: we should tread carefully when we tell others how to run their domestic affairs. We may think we have a good heart, and would never abuse our power, and will only act for the greater good. But isn't the reality of encouraging domestic policy changes abroad more about longer copyright terms for Disney and Microsoft than it is about someone's conception of justice and fairness?  

And isn't it a problem if the social policy change is only in one direction?  The authors note that: "Such action would not require changes to existing US legislation."  I sense that they see this as a positive, but to me that's kind of a negative.  If we are going to push social policy changes through international agreements (and I'm not sure we should), shouldn't all the parties have to do something?  That would make it a lot more credible, in my view.

Government Loans Tied to Buying the Lender's Products

Todd Tucker points me to this from the NY Times:

Shut out from borrowing in traditional markets, Ecuador turned to China to fill the void. PetroChina, the government-backed oil company, lent Petroecuador $1 billion in August 2009 for two years at 7.25 percent interest. Within a year, more Chinese money began to flow for hydroelectric and other infrastructure projects.

...

The Chinese money, though, comes with its own conditions. Along with steep interest payments, Ecuador is largely required to use Chinese companies and technologies on the projects.

International rules limit how the United States and other industrialized countries can tie their loans to such agreements. But China, which is still considered a developing country despite being the world’s largest manufacturer, doesn’t have to follow those standards.

Does this sound right to others? What international rules are they referring to? Maybe something OECD-related?  If so, I'm not sure anyone is effectively required to follow those standards -- there's not really an enforcement mechanism, is there?  But it would be interesting if other countries were following some international standards in practice, while China was not.

As a general matter, this is kind of a tricky issue.  Normally, we talk about protecting domestic products from "imports," and GATT Article III and SCM Agreement Article 3.1(b) would have something to say about it. But here we are talking about government actions to favor domestic products in foreign markets.  (I wrote an op-ed about this a long time ago.) 

So what trade rules, if any, apply here?  If the interest rates are "steep," it may not be a subsidy.

Feel free to weigh in if you know something about this!

Free Trade under the Canadian Constitution

Just recently, I wondered why Canada needs an Agreement on Internal Trade.  Doesn't, or at least shouldn't, its constitution provide for internal free trade?  Well, it appears that someone has decided to push this issue in Canadian courts:

A man whose drive from New Brunswick to Quebec to buy cheaper beer ended in arrest said Thursday he’s looking forward to airing his constitutional challenge in court next month as a defence crowdfunding campaign gets underway.

In an interview from Tracadie, N.B., Gerard Comeau said he just wants to know whether he has the right to buy his beer in Quebec.

“The Canadian Constitution says you’ve got the right to go buy any Canadian merchandise in any province and bring it from one province to the next,” Comeau said.

“So is it against the law? That’s what we’re trying to find out.”

As part of a sting operation, RCMP arrested Comeau, now 62, in October 2012 when he returned with 12 cases of beer and three bottles of liquor which he bought legally in Pointe-a-la-Croix, Que., just across the river from Campbellton. Police seized the booze and charged him with illegally importing alcohol into his home province.

Cross-border alcohol shopping is a regular thing in the area and the retired power lineman had been making the run two or three times a year into Quebec to score beer which costs about half the New Brunswick price and lottery tickets.

However, provincial law in New Brunswick related to federal anti-smuggling efforts implemented at the height of Prohibition forbids importing more than one bottle of wine or 12 pints of beer about 19 regular bottles from any other province. The restrictions, stiffer than importing alcohol from the U.S., carry a $292.50 fine for violators.

The Agreement on Internal Trade is kind of quirky and interesting, but it would probably be more efficient to have the constitution handle as many of these trade issues as possible.

Thanks to Canadian lawyer Mark Warner for the tip.

UNSW Post-Doc Fellowship

This is from the University of New South Wales (UNSW):

The CIBEL (China International Business and Economic Law) Post-Doctoral Research Fellowship is an opportunity for early career researchers of exceptional calibre who have completed their doctorate (PhD or SJD) in the last five years to undertake research in a CIBEL related field and participate in the UNSW Law CIBEL initiative. The appointment is part of UNSW Law's strategic priority to attract researchers of high quality and potential in its key research area of China International Business and Economic Law.

Computer software, video game consoles, printer ink cartridges, GPS devices, MRI machines and next generation semiconductors

These are some of new information technology (IT) products covered by the newly struck expanded version of the WTO IT Agreement.  This is what the WTO head said:

 “Annual trade in these 201 products is valued at over $1.3 trillion per year, and accounts for approximately 7% of total global trade today. This is larger than global trade in automotive products — or trade in textiles, clothing, iron and steel combined.”

 Notably, the United States – China deal played an important role in breaking the previous impasse.  This is the USTR announcement.

“Last night, we reached a breakthrough in our ongoing efforts to expand the Information Technology Agreement. This is a WTO agreement that eliminates tariffs on high-tech products among 54 economies, including the U.S. and China… This is encouraging news not just for the U.S.-China trade relationship, it shows that the U.S. and China work together to both advance our bilateral economic agenda, but also to support the multilateral trading system.”

 This “plurilateral” agreement may be a ray of hope to the WTO community, in particular amid the current Doha deadlock.  At the same time, however, its limited membership and the nature of covered products (IT products) tend to throw the original Doha mandate (reducing or eliminating trade restrictions on “agricultural” products) into high relief. 

COOL Down Under

Australia will have mandatory country of origin labelling for food soon:

Australia will introduce mandatory country-of-origin food labeling from 2016, Prime Minister Tony Abbott said on Tuesday, a move given impetus by a hepatitis outbreak earlier in the year blamed on contaminated berries from China.

Under the new rules, food labels will show consumers where products are made, grown or packaged, Abbott told reporters in Canberra.

Domestically produced products will have a green and gold kangaroo logo, alongside a bar chart showing the proportions of ingredients coming from Australia.

Agriculture Minister Barnaby Joyce dismissed any criticism of xenophobia, insisting the new law was simply closing a loophole.

"In the past, it was always a case of frustration where you would pick up a can and it would say something like 'made in Australia'. The overwhelming sentiment of that statement was that obviously this product is Australian. Then, on greater investigation, it became apparent it was anything but Australian," Joyce said.

"It might have been put into a can in Australia but that is as far as it went. What this does is it gives you a clear understanding."

Abbott said companies would be encouraged to go further and identify the origin of key ingredients.

When country-of-origin labeling was proposed in February, some analysts said the laws could contravene World Trade Organization (WTO) rules.

The WTO has ruled against similar labeling in the beef sector in the United States on the grounds that it favored domestic livestock.

Abbott said he was confident the new regulations would satisfy WTO rules and Joyce insisted the U.S. case was not comparable.

How burdensome will the requirements be on various players in the food production and selling process?  Will the requirements lead to segregation of foreign and domestic products during production, and thus extra costs for using foreign products, thereby discouraging the use of some foreign products? 

And getting a bit off topic, what if there is a foreign company with a green and gold kangaroo logo as its trademark?

The "Right to Regulate"

It should be obvious to long-time readers that I am concerned about policy space and regulatory autonomy under trade and investment agreements.  However, I have doubts that the "right to regulate" is a good way to describe the issue:

Talk of "rights" can be unproductive when carried out with a lack of precision, and that is what is going on here. When domestic regulation intersects with international economic law, the underlying issue is the scope and extent of the constraints imposed by international law, and the allocation of power between the national and the international. International law can certainly interfere with the ability of governments to regulate; indeed, that might be the point of it. But different international law rules interfere in different ways. If narrowly drawn (anti-protectionism), they do not interfere much at all; if written broadly (non-arbitrary regulations), they interfere a lot. If we fail to distinguish between the two, we get a confused and unhelpful debate, with people talking past each other. How international economic law affects the ability of governments to regulate is an important question to deal with. Let's not obscure it by referring vaguely to a "right to regulate," without addressing the nuances of the issue.

More here.  I'm sure some people will disagree with me.  Feel free to let me have it in the comments!

Person to Government Dispute Settlement in Canada

This is from Canada's Premiers (a group made up of Canada’s 13 provincial and territorial Premiers.)

Premiers also announced the coming into force of an improved Person-to-Government dispute settlement process under the Agreement on Internal Trade (AIT). The new dispute process includes the introduction of monetary penalties for non-compliance with panel reports. Creating a fairer and more transparent process for persons and firms to challenge regulatory practices when government measures are considered inconsistent with the AIT, [it] will increase accountability and improve the flow of goods, services, investment and labour.

The basic idea is that individuals in one province/territory who are blocked from offering goods or services in another province/territory will have recourse to the AIT, and this recourse will be more effective now than it was in the past. 

The relevant AIT text is here. See, PART B: Person-to-Government Dispute Resolution, on p. 17.  It will be interesting to see how this works in practice.

I am a little confused as to why Canada pursued a domestic inter-provincial trade agreement in order to provide this individual remedy, which sounds really daunting.  Isn't economic integration something a domestic constitution could and should do? But maybe tweaking their constitution would have been even harder.

Trade Polling: Americans Don't Think Trade Matters Much

Based on some recent polling, neither Americans in general, nor various scholars, think the TPP or TTIP matters much, at least to them personally: 

 and:

 

GATT Article XX: The Chapeau vs. the Sub-Paragraphs

This is from Lorand Bartels, in the latest AJIL:

The Chapeau of the General Exceptions in the WTO GATT and GATS Agreements: A Reconstruction

...

Conclusions

This article argues that the Appellate Body has misunderstood the chapeau and that, in particular, there is no analytic, structural, or even thematic difference between the conditions in the chapeau and those in the subparagraphs of the general exceptions. The primary reason is that all of the conditions in the general exceptions function to limit the right of a WTO member to adopt certain measures. In this broad sense, all of these conditions are directed against “abuses” of the right to adopt measures for legitimate reasons under the general exceptions. As to why some conditions are located in the subparagraphs and others in the chapeau, the explanation is mundane: some of these conditions are specific to certain types of measures, whereas others apply horizontally to all of the measures that can be adopted under the general exceptions. It also follows that, in principle, the order in which the application of these several conditions is to be analyzed should be dictated solely by the requirements of judicial economy.

...

Water Pricing and Subsidies

Let's say California is experiencing a serious drought.

And let's say companies are bottling and selling municipal water from California.

And let's say that the price set by the government for the purchase of this water is low enough that it contributes to consumption levels that exacerbate the water shortage.  (I'm not completely sure this part is true, but let's say it is).

Is there a subsidy here?

There is clearly a financial contribution, in the form of the government provision of goods.  (I don't buy the argument that a natural resource like water is not a good).

But how do we determine if there is a benefit?  What is the market benchmark we should look at to determine whether providing water to these companies at the set price confers a benefit?  

Here's some additional information from one of the links above:

Sacramento sells water to a bottler, DS Services of America, at 99 cents for every 748 gallons—the same rate as other commercial and residential customers.

Tie Votes at the ITC and WTO

This is from Inside US Trade:

In Tie Vote, ITC Find U.S. Producers Are Injured By Chinese Tire Imports

In a victory for the United Steelworkers (USW) union, the U.S. International Trade Commission (ITC) on Tuesday (July 14) issued a final determination that domestic tire producers are being materially injured by dumped and subsidized imports from China. The vote was split along party lines 3-3, but the commission's regulations require that a tie vote be treated as an affirmative determination.

Speaking of tie votes, Indonesia has now filed a panel request in the DS491 case, where one of the issues relates to tie votes:

"As Such" Claims

Threat of Injury Determination

(5) The requirement contained in 19 U.S.C. § 1677(11)(B) that a tie vote in a threat of injury determination must be treated as an affirmative USITC determination is inconsistent with Article 3.8 of the AD Agreement and Article 15.8 of the SCM Agreement because the requirement does not consider or exercise special care.

I mentioned the consultations request here.  If Indonesia wins this tie vote claim in the threat context, will someone later challenge the tie vote provision as a more general matter? 

The Deal on Greek Debt:Political Gamechanger for Europe,Tactical Retreat (not Surrender) by Tsipras

The conventional wisdom, delivered before anyone could really ponder the fine print of the Greek debt deal, is that Tsipras surrendered to the creditors in a humiliating defeat.  His referendum and prior tenacity in negotiations proved futile,according to the predominant account that has emerged in the media and the twitter and blog worlds. 

Wrong on all counts.  And here's why.

It is well-understand that Greece's debt is un-repayable under any plausible economic scenario.  But this is the reality that many European politicians cannot admit candidly in public, above all, Germany's politicians.  With the imminent expiry of the last bailout program, Greece was faced with the predicament that, on the one hand, without more assistance, its banking system would collapse, yet a further bailout would do nothing meaningful to address the sustainability of its debt burden. At the same time, to distract their voters/taxpayers from the reality of the un-repayability of the debt the politicians, again above all Germany's, had to punish Greece, blaming its bad behavior for the crisis and imposing ever more onerous if irrational conditions.  For the German political leaders, the calculation was that the people's satisfaction from seeing Greece punished and humiliated would be an effective Ersatz for the satisfaction of being repaid. (I will make no comment as to whether the politicians here rightly  gauged the national character).  Varoufakis and his colleagues were correct to see that at some point for the Germans, this exercise would only remain politically effective if Greece were given the ultimate punishment-removal from Europe.  For Schaueble, the German Finance Minister, nothing was more appealing than the cleansing or purifying Europe of  Greeks.  The Greek Government knew that, once there was no longer a European community of fate fully including Greece,a profound geopolitical reorientation would be needed for Greece's economic and social survival.  

Given Germany's leadership position in Europe, and effective veto on any positive solution, the Tsipras Government was faced with an almost impossible situation as the second bailout drew to a close.  The only at all hopeful strategy  was to try to change the longer term political dynamics so that debt unsustainability could finally be faced and directly addressed, and German influence somehow marginalized-but how to do so without courting short-term disaster?  

Tsipras and company employed a number of tactics to implement this strategy, which are widely known but wrongly thought to have been ineffective.  In fact the results have been impressive:  

1) Germany, the major obstacle to ever facing the reality of debt unsustainabilty, has been isolated and disgraced; Francois Hollande has emerged as the new leader of Europe, someone much more prepared to open serious discussions about sustainability.

2) The United States, including the Treasury, as well as the IMF itself, have moved to the position that some some form of serious debt relief is crucial.  Merkel and other European leaders are far from immune from US pressure; getting Obama's attention (the phone call to Merkel) is an achievement in itself, especially at a crucial juncture in other negotiations (Iran).

3) Given Schaueble was maneuvering in the Eurogroup to bring about Grexit, Tsipras needed a commitment of political leaders to Europe as a community of fate, where cleansing of any of its nations is an unthinkable betrayal of European values and of the lessons of history. To get such a commitment required raising the Greek crisis to the level of an ontological and moral crisis for Europe, which would concentrate minds at the top political levels as well as those of European and global opinion-makers.   This morning Tsipras got the commitment. Grexit as an option, even in the confused "temporary" version that was part of the deceptive rhetoric of Schaueble, is unmentioned in today's agreement; it has become unmentionable.   The EU has made a significant moral and political re-investment in Greece, and through its resolution of the ontological crisis, made the salvation of Greece into a test of the viability and justification of the European project.   This is being the case, the costs to Europe of a further failure or breakdown going forward with Greece have been upped considerably, especially at a time when European unity is being tried on many fronts.    

3) Through the referendum and the subsequent negotiations with other political parties, Tsipras has largely foreclosed the tactic of inducing some kind of effective coup d'etat in Greece that would destroy the democratic fabric of the country.    

4) While obtaining conditional commitments to the required short term support, Tsipras has also achieved agreement with the entire Eurozone, including Germany, that all forms of debt relief are negotiable except for "nominal haircuts." Since, as will be explained below, there are many ways to reduce a debt burden other than an reduction in the nominal amount of principal owed, this is an important advance, although heavily disguised in the agreement, obviously for the sake of German sensibilities.             

5) The tougher new conditions, while in some sense a tactical retreat by Tsipras, are couched in language that on many points, such as privatization and review of collective bargaining, leaves ample room to execute them in a manner consonant with progressive social and economic values-the means chosen to implement reforms is very much left open, and presumptively in Greek hands (provided the results are "ambitious", "comprehensive" etc.  To my mind, calling the conditions tougher than the last offer in the previous negotiations is a bit misleading in the sense that these earlier proposed conditions were tinkering with very specific aspects of policies, leaving little room to maneuver on the design of reforms in some cases. That Tsipras is being "forced" to act quickly and get some reforms passed immediately as a precondition to negotiation of a definitive deal is not a concession but is likely to work to his benefit, consolidating his political legitimacy in Greece and solidifying his de facto move to a unity government that will have a stronger hand in future bargaining with the creditors. Because as already noted, the stakes have been further raised for Europe by its moral and political reinvestment in Greece, in interpreting whether, for instance, pension reform has been "ambitious" or VAT has been "streamlined", the Eurogroup will favor readings that are generous and don't threaten further impasses.  If Germany does otherwise it will increase its disgrace and come under suspicion of trying to undermine a positive way forward.  

That's the big picture. But the devil is in the details.  So let's quickly look at some of the most important ones. (Parts of these have to passed this week, other in longer times frames (such as full pension reform))

VAT: what is required is "streamlining" and "broadening of the tax base".  That's considerably more respectful of policy space than what was at play in the previous negotiation (very particular changes to the VAT structure), and allows the Greek government to strengthen tax revenue while ensuring that the tax burden is more not less progressive.  

Pension reform: requirements are that reform be "ambitious", "comprehensive", implement the "zero deficit" clause or "mutually agreeable alternative measures" and improve "long-term sustainability" of the pension system.  Note that  virtually nothing is said here about the specific measures that have to be adopted to change the pension scheme, leaving the Greek government the policy space to ensure that pension reform does not make worse off, but ideally better off, the most vulnerable.

Privatization: Probably the most misrepresented part of the deal.  The independent fund, managed by Greek authorities, will be given the primary responsibility, to determine the method of privatization. Privatization is not the only means permissible to monetize assets, under the agreement.  Moreover, Greece enjoys protection against pressure to offer these assets at fire sale prices,by reference to international practices regarding "adequate asset sale pricing." Only 25% of revenues from these sales will have to go toward paying down Greece's existing debt. The rest will be for recapitalization of Greece's banks and for investments (the latter seemingly at the discretion of the independent fund).  

Haircuts:  as noted the only form of debt relief explicitly excluded is "nominal haircuts", reducing the face value of principal to be repaid.  The only forms explicitly mentioned are longer grace and payment periods, which of course can be designed in such a way as to provide relief on interest (anyone who has refinanced a mortgage will know that lower interest can be a very significant reduction in debt burden). Neither mentioned nor excluded but entirely possible consistent with the commitment not to reduce the nominal amount of principal to be repaid, would be innovative changes to the debt obligations, for instance GDP-indexed bonds.

Collective bargaining: contrary to many reports Greece is not being asked to abandon workers' rights. The benchmarks are EU directives and best practices and international international ones (presumably reflected in the Conventions of the International Labor Organization).  Labor market reforms can be a race to the top not the bottom.

Odious debt:  the agreement states: "the Greek authorities reiterate their unequivocal commitment to honour their financial obligations to all their creditors fully and in a timely manner."   Of course if parts of Greece's debt were to be found to be odious or illegal (and a final report of the Parliament's Truth Committee is still awaited on this matter), then by virtue of legal doctrine, that part of the debt would no longer be a "financial obligation"; its odiousness would vitiate its obligatoriness.  In sum, Greece has not in any way waived possible future claims concerning odious or illegal debt.       

 

 

Non-Violation and TRIPS (and GATT and GATS)

This is from a submission by a number of WTO Members who are skeptical of allowing non-violation and situation complaints -- through the removal of the current moratorium on those complaints -- under the TRIPS Agreement:

Non-violation and situation complaints are unnecessary to protect any balance of rights and obligations inherent in the TRIPS Agreement, as these are reflected in the Agreement's principal obligations and flexibilities, and the Agreement explicitly states that WTO Members are not obliged to implement more extensive protection (Article 1).

The whole submission is worth reading, but to narrow the issues, I wanted to focus on the point that I quoted.  Here's my question about it.  Is the TRIPS Agreement really all that different from other WTO agreements?  Don't the GATT (along with the other trade in goods agreements) and the GATS also have a comprehensive set of rights and obligations that offer a carefully constructed balance?  GATT and GATS are not just about concessions.  Any such concessions are reinforced by substantive obligations and exceptions (which we are all well aware of because that's what most of the case law is about).  So, if we don't need non-violation and situation complaints for TRIPS, maybe we don't need them at all.

More on these issues from the Spicy IP blog here.  An excerpt:

In yet another “Indian Pharma Patent Policy” centric international development, an article from LiveMint (view here), reports that India’s Section 3(d) may be facing pressure from a relatively unexplored angle. According to the article, US and Switzerland may be coming up with a creative approach to bring India to the WTO dispute settlement system. Up till now, despite all the pressure by US, India’s pharmaceutical patent provisions had not been challenged at the WTO arena, presumably because any such challenge would be a very weak one, as India’s pharma patent provisions are considered TRIPS compliant (see e.g., latter part of this piece). Now, it appears that US and Switzerland want bring to life a provision which would allow a member to bring complaints to the WTO even if the TRIPS Agreement was not being violated!

While this at first seems very worrying, with an almost colonial flavour to it, further study shows that not only may this be an empty threat, but even if it was carried out, there is a chance this provision could be used to bring a WTO challenge against the US, EU, etc for insisting on TRIPS plus provisions!! This post will try to expand on what this provision is, whether it could be used against India if it comes back to life, and finally, if it’s revival means that conversely, US, EU, etc can be challenged at the WTO level for insisting on TRIPS+ provisions.

Some IP Protections Probably Go Too Far

This is from Fredrik Erixon of Brussels think tank ECIPE:

Thirdly, it is difficult to find economic justifications to put copyright concerns in the top league of priorities. Copyrights are already much longer than is economically motivated. There is not an efficient system for global registration and transfers of copyrights; a handful of subsectors might have established practices for the secondary market, but overall it is not working well. Furthermore, the chief problem for copyright sectors is not one of IP law; it is rather counterfeiting that disturbs sales. And counterfeiting problems are difficult to address in a bilateral trade negotiation.

Fourthly, geographical indicators, the oft-prioritised area in EU external IPR policy, have a weak (but not non-existent) economic justification. It is difficult to see GIs as something more than a way to avoid price competition. There are costs associated with establishing a geographical brand, like champagne or Parma ham. But the cost is almost indistinguishable from general market promotion of goods and brands, which is necessary regardless of whether geographical location is relevant or not. Furthermore, there are no positive spillovers from extending GIs to other countries, and such a move cannot facilitate relocations on the basis of cost and comparative advantages. This is not to say that there is no legitimate case for GIs; only that the economic underpinning is weak.

WHEN THE APPELLATE BODY REFORMULATES WITHOUT JUSTIFICATION A CANON OF INTERPRETATION: CONSEQUENCES FOR CHINA'S EXCHANGE RATE LEGAL STATUS

The canon of interpretation ejusdem generis states that where a listing of particular persons or things is FOLLOWED by a general term, the general term must refer to the same kinds of persons or things previously listed. In other words, the general term is limited by things ejusdem generis - “of the same species.” So a list of “carrots, corn, potatoes and other agricultural products” should be read to include soy beans, but not eggs, cheese or chickens, the delimiting genus being vegetation.

The Appellate Body has reformulated without justification this canon by extending it in a footnote (as an obiter dictum) to a situation where the general word or phrase PRECEDES the specified list:

At the oral hearing, the United States referred to the Latin canon of construction, "ejusdem generis", which provides that, when a general word or phrase follows a list of specific persons or things, the general word or phrase will be interpreted to include only persons or things of the same type as those listed... In our view, the doctrine would equally apply to situations where the general word or phrase PRECEDES the specified list.

The consequence of this “view” is crucial for the legal status of China's exchange rate policy . It means for exemple that the illustrative examples “grants, loans, and equity infusion” following the expression “direct transfer of funds” in Article 1 of the SCM, constrain the meaning of what is a direct transfer of funds. In other words, ONLY transactions similar to those given as examples could be considered as a  direct transfer of funds. Note that this is completely different from saying reasonably that a transaction similar to one the examples is certainly a direct transfer of funds. This is in fact the original position of the AB, but unfortunately the previous footnote opens unreasonably another door.

To illustrate the importance of this issue, consider for example the issue of whether China’s exchange rate transactions could be considered as a financial contribution under the form of a direct transfer of funds. According to Magnus and Brightill a financial contribution exists ‘any time a government and a company trade one thing for another, even RMB for dollars’. However, according to Coppens:

it seems unlikely that the Appellate Body would accept this reasoning, because the scope of direct transfers of funds is confined to those transactions that have ‘sufficient characteristics in common’ with one of the listed items (i.e., grants, loans, and equity infusion). An exchange transaction as such does not appear to be of ‘the same type as those listed’.

Coppen’s view is valid only if we accept the obiter dictum reformulation of the ejusdem generis canon by the AB in its footnote. Considering that illustrative examples of  a general term constrain completely the meaning of this term is a hazardous interpretation. Is it conform to the spirit of the ejusdem generis canon where the general term FOLLOWS  the examples?

The TPP and Jobs

I wish there were a lot less talk of the TPP leading to massive job losses or job gains, and instead people said more sensible things like this, from Ted Moran:

But economists are taught—as a matter of theory—that trade agreements cannot be expected to create a greater total number of jobs in the economy. And economic predictions about the impact of the TPP a year or so after it is finalized—say, by mid-2017—confirm that there will be no noticeable impact on the total number of jobs in the US economy.

More from the Productivity Commission on ISDS

We discussed what Australia's Productivity Commission thought of ISDS back here.  Now they have something more to say, but I couldn't do anywhere near as good a job explaining it as Esme Shirlow did over at the Kluwer Arbitration Blog.  Here's an excerpt, but the whole thing is worth a read:

On 24 June 2015, the Australian Productivity Commission released its eighteenth Trade and Assistance Review 2013-14.

The Commission is an independent research and advisory body, with statutory authority to report annually on the economic impacts of Australia’s international trade policy. As readers of this blog may recall, in previous years the Commission’s Review has influenced the Australian Government’s approach to the negotiation of trade and investment treaties. Most notably, the Commission’s 2010 Review prompted the then-Labor Government to adopt a policy against the inclusion of investor‑State dispute settlement (ISDS) clauses in future trade and investment treaties. This policy was reversed by the Liberal Government in 2013. An attempt to introduce a legislative ban on the negotiation of such provisions was rejected in 2014 (see, further, this 2014 post by Luke Nottage).

The Commission Remains Opposed to the Inclusion of ISDS Provisions in Australia’s Treaties

The Commission’s 2013-2014 Review expresses the Commission’s continued opposition to the negotiation and inclusion of ISDS clauses in Australia’s trade and investment treaties.

...

There is little doubt that the Review will be cited heavily in discussions of the TPP in the coming months. As one commentator put it, opponents of the TPP:

…were delivered a beautifully timed snippet of academic firepower last week in the form of an annual trade and assistance review from the Productivity Commission.

While the Review will no doubt be invoked in such debates, it remains to be seen what effect (if any) it will have on the Australian Government’s approach to the TPP negotiations or, indeed, the content or negotiation of future investment and trade treaties.

Piketty, Globalization, and the Inequality Puzzle inside the Higher Income Bracket.

In his book, Capital in the Twenty-First Century, Thomas Piketty establishes a fact that many people have not suspected.

Whereas many suspected the confirmed fact that a gap has opened up after the seventies between the top 10 percent and average income earners, many did not suspect that the gap that has opened up between, say, the top .1 percent and the remainder of the top 10 percent is far larger that the first one. Imagine for example what it would mean if such a substantial gap has effectively opened up in the United States between the top .1 percent of lawyers and the remainder top 10 percent of lawyers.

What are the causes of this surprising phenomenon? Piketty’s argument is centered about the intrinsic tendency in a market economy of capital or wealth to grow at a rate that normally exceeds the economic growth rate. Thus, economies will tend to have ever-increasing ratios of wealth to income, barring huge disturbances like wars and depressions.

Is there a place in this picture for globalization as a significant causal factor? One would think of course first of the greater ability of entrepreneurs to draw on low-cost foreign labor. However, this aspect is more relevant in explaining the first type of gap, namely the one between the top 10 percent and average income earners or less skilled workers.

In his excellent article, Lawrence H Summers, offers another lead for the possible role of globalization in explaining this inequality puzzle:

[T]here is the basic truth that technology and globalization give greater scope to those with extraordinary entrepreneurial ability, luck, or managerial skill. Think about the contrast between George Eastman, who pioneered fundamental innovations in photography, and Steve Jobs. Jobs had an immediate global market, and the immediate capacity to implement his innovations at very low cost, so he was able to capture a far larger share of their value than Eastman. Correspondingly, while Eastman’s innovations and their dissemination through the Eastman Kodak Co. provided a foundation for a prosperous middle class in Rochester for generations, no comparable impact has been created by Jobs’s innovations. This type of scenario is pervasive. Most obviously, the best athletes and entertainers benefit from a worldwide market for their celebrity. But something similar is true for those with extraordinary gifts of any kind. For example, I suspect we will soon see the rise of educator superstars who command audiences of hundreds of thousands for their Internet courses and earn sums way above the traditional dreams of academics.

Are there other unsuspected ways through which globalization plays a role in this inequality puzzle at the top? 

 

Is ISDS Private or Public?

I've always assumed that when you have an international investment treaty, which sets out obligations that states have to follow (and are subject to legal claims when they do not), this is public international law.  That is the case even if the "judges" hearing the claim are not part of a permanent judiciary.  They might be private lawyers, or professors, as their main profession, but in the context of serving on an investment tribunal, they are authoring public international law.

And yet, in the EU at least, part of the ISDS debate seems to involve an effort to change it from "private" to "public", as shown by this interview with European Parliament member Bernd Lange, chair of the international trade committee:

There have also been concerns about the Investor-State Dispute Settlement (ISDS), which is a private system to resolve any possible disputes between investors and countries. How has the situation changed from last month when the plenary vote was postponed?

The clarification is new. Last time it was clear that ISDS is dead, that private arbitration is an instrument of the past and it is not foreseen by the Parliament anymore as an alternative in trade agreements.

However, last month it was not worded clearly enough. Now it is clear that ISDS  has to be replaced by a public court. We need publicly appointed judges, we need a clear European mechanism, we need a public codex of the court. So it is a completely new system.

In his view, it seems, a change from "private arbitration" to a "public court" will be an important reform.

Now, there are, of course, ways to improve the ISDS legal system, and a permanent set of judges makes a lot of sense to me.  But as I said at the outset, I think it already is public.  So what exactly is behind his rhetoric?

Perhaps the use of "private" is designed both to denigrate the existing system and to offer evidence that it has been reformed.  It was private and bad; it will now be public and good.

But if that's all ISDS reform is, I'm not sure they will have done anything of substance.  Will these new "public" judges be more or less likely to find violations of international investment obligations?  I don't know, but I can imagine them going either way. Some people actually believe in things like property rights and due process, and are eager to enforce them when given the chance. The "publicly appointed" judges they select may believe in this even more than the current "private" ones.

For more on this, here is the amendment to the ISDS part of the European Parliament's TTIP recommendations, which the Parliament will vote on tomorrow:

(xv) to ensure that foreign investors are treated in a non-discriminatory fashion, while benefiting from no greater rights than domestic investors, and to replace the ISDS-system with a new system for resolving disputes between investors and states which is subject to democratic principles and scrutiny, where potential cases are treated in a transparent manner by publicly appointed, independent professional judges in public hearings and which includes an appellate mechanism, where consistency of judicial decisions is ensured, the jurisdiction of courts of the EU and of the Member States is respected, and where private interests cannot undermine public policy objectives;

I guess what we are really talking about here is moving along the private-public continuum.  The idea is to make ISDS look slightly more like a traditional public court.  I suppose the proposals do achieve that, albeit to a very modest degree. 

And finally, the big political question is, can a somewhat minor tweak to ISDS bring in enough votes to get trade agreements with ISDS approved by the European Parliament?  On that issue, I have absolutely no idea.

A Few Thoughts on the TPP

People keep asking me what I think of the TPP.  Given that, aside from a few leaks, I haven't seen the text, I'm a little unsure how to answer.  It kind of depends what's in it.  Nonetheless, I offered some preliminary thoughts here.  An excerpt:

The TPP has the potential to push further in particular areas of trade sensitivity, such as supply management for dairy products in Canada and sugar market access in the United States. The TPP will be much more valuable if it can take on these long-standing trade barriers. It remains to be seen whether this will happen.

Also:

... the TPP's "WTO minus" provisions -- the absence of trade remedies and subsidies, and weak dispute settlement -- have a negative impact. Generally speaking, if a TPP party's government has a concern about another TPP country's protectionist measures, it probably has to go to the WTO with its complaint. Thus, the WTO remains the indispensable international organization for keeping trade friction from turning into full-blown trade wars.

To sum up:  The TPP's value depends on how much liberalization is in it; and the TPP is unlikely to displace the WTO as the most important trade treaty.

Two New WTO Law Books

I wanted to mention two new books on WTO law.  The first I've been reading; the second is in the mail and I'll read it soon.

The one I've been reading is A History of Law and Lawyers in the GATT/WTO: The Development of the Rule of Law in the Multilateral Trading System, edited by Gabrielle Marceau.  Here is a summary:

How did a treaty that emerged in the aftermath of the Second World War, and barely survived its early years, evolve into one of the most influential organisations in international law? This unique book brings together original contributions from an unprecedented number of eminent current and former GATT and WTO staff members, including many current and former Appellate Body members, to trace the history of law and lawyers in the GATT/WTO and explore how the nature of legal work has evolved over the institution's sixty-year history. In doing so, it paints a fascinating portrait of the development of the rule of law in the multilateral trading system, and allows some of the most important personalities in GATT and WTO history to share their stories and reflect on the WTO's remarkable journey from a 'provisionally applied treaty' to an international organisation defined by its commitment to the rule of law.

The book has some really good contributions from lots of very knowledgeable people, including some who worked at the GATT/WTO long before many of us were even aware of it!

The one I haven't read yet, but which looks interesting, is A Digest of WTO Jurisprudence on Public International Law Concepts and Principles, by Graham Cook of the WTO Secretariat.  Here is a summary:

In its first twenty years, the WTO dispute settlement system generated over 350 decisions totalling more than 60,000 pages. These decisions contain many statements by WTO adjudicators regarding the law of treaties, state responsibility, international dispute settlement, and other topics of general public international law. This book is a collection of nearly one thousand statements by WTO adjudicators relating to admissibility and jurisdiction; attribution of conduct to a State; breach of an obligation; conflicts between treaties; countermeasures; due process; evidence before international tribunals; good faith; judicial economy; municipal law; non-retroactivity; reasonableness; sources of international law; sovereignty; treaty interpretation; and words and phrases commonly used in treaties and other international legal instruments. This comprehensive digest presents summaries and extracts organized systematically under issue-specific sub-headings, making this jurisprudence easily accessible to students and practitioners working in any field of international law.

I sense there is still confusion as to the precise basis on which international law is relevant to WTO disputes, but there is not much doubt that it is relevant.  It is clear at this stage of the development of WTO law that if there is an international law argument to be made, someone will make it.

Guest Post #2 on India - Agricultural Products

This is a guest post from Geneva trade lawyer Adarsh Ramanujan:

“Rebuttable” presumption of Article 2.2 inconsistency arising from Article 5.1 inconsistency?

Continuing from my earlier post on the AB Report on India – Agricultural Products, I found another finding of the AB to be an interesting one – this relates to the AB’s conclusion on the relationship between Articles 5.1 and 5.2 on the one hand, and Article 2.2 of the SPS Agreement on the other.

The AB Report states the obligations under Article 5.1 and 5.2 are specific applications of the general obligations under Article 2.2 of the SPS Agreement (Para 5.21, AB Report). In a way, when you start reading the AB’s analysis, it appears as if Article 5 forms a sub-set of the general obligations provided under Article 2.2 such that violation of Article 5 would imply an automatic violation of Article 2.2. This is in line with the findings of the AB in Australia – Apples. However, very quickly, the AB clarifies that this is not exactly the case since a violation of Article 5 would only create a rebuttable presumption that Article 2.2 has also been violated. The AB was not willing to state that a violation of Article 5 would always lead to a violation of Article 2.2 of the SPS Agreement since the terms used in the treaty provisions were not identical.

Nonetheless, the AB makes it clear that proving consistency with Article 2.2 despite a violation of Article 5, may be “difficult” (Para. 5.29, AB Report). This is because Article 2.2 requires the Respondent to demonstrate a rational or objective relationship between the SPS measure and the scientific evidence, and also establish that it is based on scientific principles, and in the AB’s view, this would ordinarily focus on risk assessment – the subject matter covered under Article 5 of the SPS Agreement (Paras. 5.25-5.27, AB Report).

The issue that now arises is this – how does one rebut this presumption? When applied to the specific appeal raised by India in this dispute, the AB clarifies that the Panel intended the same legal finding (Para. 5.34, AB Report), but finds fault with the Panel’s application of this legal finding to the facts of the dispute. The AB records that India had put forth arguments and evidence to potentially rebut this presumption of Article 2.2 inconsistency and the Panel simply failed to apply its mind to such evidence and arguments (Paras. 5.35-5.36, AB Report). India, in its arguments before the Panel, relied upon three pieces of evidence / arguments to show compliance with Article 2.2 (irrespective of violation of Article 5):

(i)                  The fact that the measure under challenge conforms to international standards; and / or

(ii)                The fact that import bans upon an occurrence of LPNAI are being implemented by several countries; and / or

(iii)               Certain scientific reports that are placed on record outlining the risk of trade in unprocessed meat and eggs from LPAI reporting countries.

Hypothetically, assuming these pieces of evidence / argument are actually considered, I wonder if one or more of the above would be considered sufficient to overcome the presumption of inconsistency with Article 2.2.  When I say this, I am focussing more on the requirement under Article 2.2 that the SPS measure be applied “only to the extent necessary” and the AB’s clarification that there needs to be a rational or objective relationship between the SPS measure and the scientific evidence. I understand these requirements to imply a very specific assessment to that particular measure for that particular Member. Under the circumstances, the last two pieces of evidence mentioned above may not really be sufficient. Similarly, the fact that a measure conforms to international standards etc. relates more to Article 3, SPS Agreement and the mere fact of Article 3 compliance cannot imply automatic Article 2 compliance (I think).

Of course, the above three are only what were argued in this particular dispute. Nonetheless, I wonder if it would at all be possible for any Respondent to ever “rebut” the presumption of Article 2.2 inconsistency in cases of Articles 5.1/5.2 violation. I think the AB’s finding, with due respect, is a little too abstract and theoretical. Then again, I have been wrong before and one cannot predict the variety of factual circumstances one can come across in litigation.

Perhaps, the reason why I tend to think so is due to my belief that the finding is of little practical use. Once Article 5 violation is established, I do not think it matters whether the Respondent can or cannot rebut an Article 2.2 violation. On the other hand, if violation of Article 5 is disproved on facts, Article 2.2 violation would have to be proved on facts by the Complainant and here, the AB has clarification on the presumption of Article 2.2 violation would not appear to be relevant here. 

On the other hand, would the compliance with Article 5 automatically imply compliance with Article 2? I would say that this is not necessarily true, both from an interpretation perspective as well as from the practical perspective.

Guest Post #1 on India - Agricultural Products

This is a guest post from Geneva trade lawyer Adarsh Ramanujan:

‘Interpretation’ of the scientific standards? Thoughts about India – Agricultural Products

I finally got around to reading the AB Report released earlier in June in the India – Agricultural Products. I found one of the claims raised by India to be very interesting and I thought it may be worth sharing and exploring some of them.

The OIE standards, which are considered to embody the international standards for certain products in the Annex to the SPS Agreement, played a crucial part in this dispute. The complainant had relied on these standards as providing the international benchmark of SPS measures for 8 of the 10 products covered by the Indian measure under challenge. At the Panel, some dispute arose as to the meaning and understanding of the OIE standards and India raised one or more claims on the Panel’s approach to settling this dispute.

Here’s the relevant part of India’s claim I am talking about: 

“…Further, it also acted inconsistently with Article 3.2 of the DSU by not interpreting the OIE Code in accordance with the customary principles of international law as codified in Article 31 and Article 32 of the VCLT” (para 8(b), India’s Notice of Appeal).

 

“India further argues that the Panel failed to conduct its assessment of the meaning of the OIE Code in accordance with customary rules of treaty interpretation. According to India, because the OIE Code is the international standard for the purposes of Article 3 of the SPS Agreement, it "forms the relevant context for interpretation of Article 3.1 and Article 3.2 of the SPS Agreement". The OIE Code, India adds, must therefore be interpreted in accordance with customary rules of treaty interpretation, as prescribed by Article 3.2 of the DSU. India maintains that, although it repeatedly urged the Panel to interpret the OIE Code in accordance with customary principles of treaty interpretation, the Panel disregarded its argument and therefore acted inconsistently with Article 11 of the DSU.” (Emphasis added in bold) 

After clarifying that India has only raised an Article 11 DSU claim in this specific respect, here is what the AB appears to rule on this specific claim: 

“5.98. To begin with, we are not persuaded by India's contention that the Panel's failure to refer to India's argument that the OIE Code must be interpreted in accordance with customary rules of treaty interpretation leads to a violation of Article 11 of the DSU. A panel is not required to identify or address every argument advanced by a party….Apart from noting that the Panel did not expressly address its argument, we do not see that India has explained how this alleged error is so material that it constitutes a breach of the Panel's duties under Article 11. We also do not consider that India has sufficiently defined the contours of this aspect of its claim.

 

5.99. In addition, India has not demonstrated why or how the Panel's analysis departed from a proper application of the interpretative rules India relies upon, or how, if properly applied, such rules would have produced a different outcome regarding the meaning of the OIE Code…Thus, in assessing the Panel's reasoning and conclusions in connection with India's claims, we have not identified any legal error, and India has not, in our view, demonstrated what interpretative error the Panel allegedly committed that resulted in an incorrect understanding of Chapter 10.4 of the OIE Code.” (Emphasis supplied in bold)

 

India’s claim appears to be dismissed for failure to satisfy the Article 11 threshold. What if India had instead raised it as a claim of legal error rather than an Article 11 claim? Then comes the interesting question of how one must interpret the terms used in the OIE code. India’s claim appears to be that since the OIE code must be interpreted in accordance with the Vienna Convention because it forms relevant context to the SPS Agreement. I am not entirely sure that I understand the logic of this argument – Article 3.2 DSU requires the SPS Agreement to be interpreted as per customary international law (i.e. Vienna Convention), which refers to interpreting a treaty provision in the light of various contextual elements, but Article 31 of the Vienna Convention itself does not talk about how to interpret such contextual elements.

However, the real question, in my opinion is how does one interpret the OIE code? Is this a matter of fact or a matter of law? The actual instrument designated as a ‘treaty’ is the 1924 International Agreement for the Creation of an Office International Des Epizooties in Paris, though this does not refer to standard-setting. A further initial study of the OIE, its organisation and its codes suggest that the relevant codes are developed by specific committees and working groups and adopted by all the Member countries through consensus or 2/3rds majority. Prima facie, the OIE Codes do not appear to satisfy the requirement of a ‘treaty’ for the purposes of the Vienna Convention. Given the background and the context in which the OIE codes are prepared, it seems unreasonable to call them legal instruments and apply customary rules of treaty interpretation to such codes.

This would imply that the interpretation of the OIE codes is only a matter of fact. Nonetheless, would the fact that the OIE codes are referred to within the SPS Agreement automatically make the interpretation of the OIE codes a matter of law? In that respect, would this be different from the situation where the entire contents of the OIE codes are deemed to form part of the SPS Agreement? Take the example of the Schedule of Commitments to the GATT. The classification of the goods mentioned in the Schedule of Commitments is borrowed from the HSN. Existing jurisprudence suggests that the Schedule of Commitments is considered to be part of GATT (which is a treaty) and the use of customary rules of interpretation extends to the terms used within the schedule of commitments. Would this logic extend to the terms used in the OIE codes? Would the answer to this question depend on whether the terms used in the OIE codes are deemed to form part of the SPS Agreement by way of incorporation?

 

I would welcome any thoughts on this issue that seems to have piqued my interest. 

Writing the ELSA WTO Moot Court Case

From ELSA:

ELSA International invites proposals from prospective case authors to write the Moot Court Case for the 14th edition of the ELSA Moot Court Competition on WTO Law.

EMC2 is a simulated hearing of a World Trade Organization dispute settlement panel. Teams of interested students from all over the world prepare written submissions for the complainant and the respondent of a fictitious case involving WTO law. Teams then travel to regional rounds where they compete against each other before a WTO dispute settlement moot court panel composed of WTO and trade law experts.

Case proposals will be evaluated by an Academic Board composed of WTO law academics, practitioners and staff of the WTO Secretariat. After acceptance of the case proposal by the Academic Board, the case author will work with the Academic Board to refine the issues presented in the proposal throughout July-August, before the launch of the competition with the publication of the case on September 18^th 2015. In addition to the initial moot case, the case author is also required to prepare written clarifications addressing questions raised by students on the case as well as a bench memorandum that includes the best arguments and counter arguments to legal and factual issues arising in the dispute (due in December 2015). The bench memorandum is used by all moot court panelists in the regional and final round to mark and grade the participants’ written and oral submissions. The case author would be invited to the WTO Secretariat in Geneva to judge the final oral round of the competition, along with distinguished WTO scholars and practitioners, in May/June 2016. Throughout this Moot Court Competition, the case author will work in close collaboration with distinguished members of the Academic Board and experts of the WTO Secretariat.

The purpose of the EMC² is to teach students about WTO law and the WTO dispute settlement system as well as to assist them in developing practical litigation skills. The Moot Court Case should enable students to engage with a realistic trade dispute raising legal issues under the WTO covered agreements. The proposal should outline the basis facts of the case as well as identifying the relevant WTO provisions. The selected author will then be required to submit within a short notice a more detailed moot case for review by the academic board.The Moot Case should provide a relatively balanced opportunity for legal arguments in favour of both the complainant and the respondent. Ideally, the Case would address legal issues raised but not resolved in the jurisprudence to date and provide the opportunity to study and argue existing case law. The resolution of the legal issues should not depend on an evaluation of complex evidence or data. The proposals will be evaluated on the basis of the novelty of the issues raised, along with the opportunities provided by the case for students to engage with the existing WTO jurisprudence.

The 2015 Moot Court case, written by Assistant Professor Nicolas Lamp from Queens University, Canada, is available here: http://elsamootcourt.elsa.org/the-case/. While the case is a good model for potential authors, you are encouraged not to repeat the issue in the previous year’s case.

Case proposals should be made to [email protected] by 15^th of July 2015. The case author would be notified after 2 weeks and begin work with the Academic Board to develop the case over the summer of 2015, before the case is launched on 18^th of September 2015.

"Secret Treaty to Mine the Moon Draft" Would Apply GATT to Moon Minerals

I first thought it was an email phishing scam, but it is a real story that a journalist was asking my opinion on. I found it intriguing enough to share it on the blog ...

A few day ago, Wikileaks released what has been referred to as a "Secret Treaty to Mine the Moon Draft" here.  They got it from the so-called "Saudi Cables".

The document makes reference to applying GATT "with respect to the exploitation of the natural resources of the moon" and speaks, in particular, of limits on subsidization and non-discrimination be it by means of tariffs or non-tariff barriers.

Moon mining would take place under an "international regime on behalf of mankind as a whole" and any operator, public or private, would need approval under the regime.  

Still, when bringing back the minerals to planet earth (if and when this becomes feasible), the fear may be that countries impose trade barriers on them (something one better finds out before leaving for the moon).

Applying WTO rules and commitments to such minerals, even if they do not originate from the sovereign territory of any WTO member (no country can appropriate the moon, see the poorly ratified 1979 Moon Treaty), may then make sense.

Any views on this?  Should WTO rules apply on the moon?