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Charnovitz
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Note: This is a revised version of the paper that I briefly posted on April 11. Steve Charnovitz
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Simon, If the UN calls for sanctions against a WTO-member country, say Myanmar, I don't think that the target country should have a WTO right to rebalance its trade against the sender countries. I presume that a country would not notify an Article XXI(c) measure unless the UN had actually taken relevant action, so there is some difference between this situation and the unilateral rationales that underlie the rest of Article XXI.
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Thanks Brett and Tomasz for those thoughtful comments which I want to further reflect on. On steel, I would start with a presumption that overcapacity is better than under capacity. I was more convinced in the 1970s when I first learned about the problem of steel overcapacity than I am today that steel overcapacity is a market failure that needs government intervention. But if steel production is an international market failure, then a solution to it may be an intergovernmental commodity agreement that would address subsidies, exports, pricing, reserves, etc. Perhaps this task can be undertaken by the OECD. If VRAs are negotiated under an international agreement, they can be legal under GATT Art. XX(h). How XX(h) interacts with Art. 11:1(b) of the Safeguards Agreement has not yet been litigated. Perhaps GATT Art. XX should be read into the Safeguards Agreement. I don't think Article 11.1(c) should be interpreted in a way that limits the toolbox for international organization to use to address global economic problems.
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In a sidebar conversation today, I have been asked what limiting principles do I see to my novel and far-reaching thesis that there is a broad right of self-help in GATT Article XIX:3 (as modified by Article 8 of the Safeguards Agreement) to rebalance trade. Using the hypothetical example of EU self-help against a US measure, let me suggest these limiting principles: If the US measure does not involve trade in goods, there is no Article XIX right of self-help. If the US measure does not involve imports, there is no right of self-help. If the US measure is notified to the WTO as a CVD, there is no right of self-help. If the US measure is notified to the WTO as an AD duty, there is no right of self-help. If the US measure is notified to the WTO as a TBT or SPS measure, there is no right of self-help. If the US measure is notified to the WTO as a GATT Article XI measure justified by Articles XI or XX, there is no right of self-help. If the US measure is notified to the WTO as a GATT Article III measure justified by Article XX, there is no right of self-help. If the US measure is notified to the WTO as a measure justified by GATT Article XXI(c), there is no right of self-help. But if the US tariff or quota or import ban is notified to the WTO as a safeguard measure, or not notified as a safeguard measure, then there would be a right of self-help to rebalance trade.
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Thanks Simon. Here is one characteristic the §232 measure has in common with a safeguard The purpose of the measure is protection. Look at this recent tweet from the President: "Mar 8: Looking forward to 3:30 P.M. meeting today at the White House. We have to protect & build our Steel and Aluminum Industries while at the same time showing great flexibility and cooperation toward those that are real friends and treat us fairly on both trade and the military." But my argument is broader than merely saying that the §232 measure is properly classified as a safeguard. My point is that it doesn't matter how the United States characterizes the measure. There is a plausible legal argument that the retorsion is legal given the facts of the case. And even assuming that a panel would sometime find that the §232 measure's violation of Article II is excusable by Article XXI, it's not clear to me that Article XXI prohibits action under Article XIX or action under the Safeguards Agreement.
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Professor Qin is surely correct that footnote 3 of the WTO Agreement would preclude majority voting in the DSB. The proponents of Article 25 arbitration should explain how DSU Article 25.4 would work regarding Article 21.5 arbitration. With regard to Professor Kuijper's thoughtful comments above, I am puzzled by the amicus curiae "crisis" being put forward as a useful precedent for General Council action on DSB matters. First, the General Council took no action on this "crisis." See WT/GC/M/60, Nov. 2000, at para. 132. Second, the General Council took no action by majority vote. On the contrary, if the tool of majority vote had been thought to be available during that "crisis", my guess is that it would have been used. See "Judicial Independence in the World Trade Organization," International Organizations and International Dispute Settlement: Trends and Prospects ( Laurence Boisson de Chazournes et al. eds., Transnational Publishers, 2002).
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The panel's decision on benefit is troubling, and I wish the complainants had done a better job of pleading this prong. I don't know if the dissent is right in its but-for analysis, but the panel failed in not engaging the dissent and explaining why it was wrong. If the normal practice of governments is to give solar/wind energy providers very generous terms for political reasons, then perhaps such terms are always a benefit. I would also have been interested in an explanation by the panel of how participation in the contract confers an advantage (para. 7165) and yet that same contract does not obviously confer a benefit. To argue the existence of private benefit, the complaining countries could have looked beyond price in considering remuneration/benefit. A FIT contract that does not have a degressive tariff could confer a benefit if the normal practice is for degressivity. A government contract that does not require bidding could ipso facto also confer a benefit.
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I agree with Simon that Antigua ought to pursue SCOO that lowers IP protection down to a best practice, such as 28 years of copyright protection. But it might be too idealistic to expect Antigua to do so given the self-servicing and embarrassing comments made by USTR at the DSB recently accusing Antigua of piracy. The Nevada and New Jersey actions on gambling show, once again, how narrow-minded the arbitrators were in withholding the billions of dollars in SCOO that Antigua deserved. There is no justifiable moral reason to allow horseracing remote gambling while forbidding other remote gambling. The gradual move of USG to allow internet gambling shows, once again, that the case against Antigua was only about US protectionism.
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This ia a good example of US government stupidity. First, in having a Buy American provision in the first place. And second for ripping out pipe in a government health center for no reason other than to vindicate protectionism. Perhaps if the Obama Administration did not waste so much taxpayers dollars, there would be more resources to pay for Medicare to cover medical procedures like virtual colonoscopies that would save lives. Instead, the Obama Administration has refused to pay for such diagnostic tests for the elderly.
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I think Mexico has to at least explain why they have not retaliated in transportation services. If they don't explain why that was impractical or ineffective, then one might wonder whether the retaliation is NAFTA-legal. If the retaliation is not NAFTA-legal, and is directed only against the US, then it seems to me to be a WTO violation. (If the retaliation is NAFTA-legal, then presumably it would not be challengeable in the WTO because it would be based on an inter se agreement. Unlike in soft drinks, a panel would not be able to dodge that if the United States were to challenge Mexico's retaliation in the WTO.)
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