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Simon Lester
Florida
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Hi Andrew, I didn't comment on this part because I can't figure out what he meant either! Did he mean that ISDS inherently interferes with national court jurisdiction, by allowing cases to leave the national sphere and move to the international, and thus should never be allowed? Or did he mean that if not structured properly, ISDS could limit national court jurisdiction? Or something else entirely? Very hard to say.
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David, Thanks, that's probably a good place to start, in terms of thinking about how international agreements can provide a better investment environment.
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Brett, I guess I was focusing on Article 26.1(b), which says: "where a measure has been found to nullify or impair benefits under, or impede the attainment of objectives, of the relevant covered agreement without violation thereof, there is no obligation to withdraw the measure." Because it's clear you can't get the measure withdrawn, the incentive to bring a case is weakened. I'm not quite sure how the recommendation for a "mutually satisfactory adjustment," and resulting retaliation, would play out in practice. Maybe we'll find out some day!
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Thanks, Brett. You may very well have been right about the "non-violation" nature of the case -- I've heard others say the same thing. I'm just not sure what this is based on. I'd want to hear more from others who take this view. Simon
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OK, Benn, I read your latest comment as a general criticism of investment treaties, rather than an argument for a carve out of tobacco, so I'm going to declare victory and get out of this discussion! ;)
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But isn't an investment treaty just "a minimum obligation" set through an international process? Why distinguish? If you say that such international protections are not needed at all, I can see the point. But if you're saying, such protections are generally needed, but should not be given to tobacco, that doesn't make sense to me. If that's your position, I don't see why it wouldn't apply to domestic constitutions.
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Benn, Let me go deeper into one point you make (assuming you are still following this thread!). You said: "It is poor public policy for governments to provide incentives for investment in the tobacco sector, ..." And then later you said: "there is no question that investment treaties provide an incentive for investment in the form of additional legal protection." It is true that legal protections can provide incentives to invest. Where such protections exist, companies are more likely to take on the risk of an investment. Thus, if these protections exist in the tobacco sector, companies will invest more there than they otherwise would have. But taking away these general protections for particular sectors that people don't like seems odd to me. A suggestion that we should carve out tobacco from protections in the trade law context, in order to avoid providing incentives, strikes me as the same as saying we should carve tobacco out of the U.S. or Australian constitutions. So, you could say that, generally, takings/regulatory takings require compensation, but for tobacco they do not. Would you take the principle you seem to endorse -- if I'm understanding you correctly -- in the international context and apply it to the domestic context as well? Should tobacco be carved out of domestic constitutions? How is carving tobacco out of international economic agreements any different from that?
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Thanks, Benn. Addressing the points from your blog post, obviously I don't mean that there is no recourse for expropriation absent ISDS in TPP. Domestic law still applies. But presumably the point of international treaties having expropriation rules is that people consider domestic law insufficient in some cases. Thus, without expropriation rules in the TPP, there will be no recourse where countries don't have adequate domestic laws. The result is that in those countries, a government can expropriate tobacco factories without providing adequate compensation. Sorry if that wasn't clear, but I think now it is. On the tax point, if we're talking about an income tax, I'm not sure WTO law would apply. Also, the real issue is in countries with problematic domestic governance, so I'm not sure domestic remedies can help. I'm not sure I understood your third point. But the real issue is your last point, where you say: "I agree with Simon that fixing investment treaties as a whole should be the primary priority. However, this is not mutually exclusive with excluding tobacco from the TPP investment chapter." While it doesn't have to be mutually exclusive, it seems to me that in practice it is. Anti-tobacco folks are putting all their energy and resources into excluding tobacco, and not thinking more broadly about health issues. If they "win," we still have ISDS, and all other health regulation will experience the "legal chill" mentioned above. Is that really a good result from the perspective of the public health community? It seems to me that people arguing for reforming ISDS are finally making some progress (even the Economist is now taking this seriously!), and there's a real chance for changing course. But many anti-tobacco folks are saying, in effect, we don't care about any of that, just get tobacco out and we will be happy and stop bothering you. That seems like a very narrow and restricted way of engaging with the issues. Oh, one more thing: I disagree that ISDS provides incentives to invest in any industry, much less tobacco. There's just no evidence of a correlation between ISDS and investment, as far as I can see.
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Chris, I'm not sure why you say my argument fails to take into account "legal chill." I thought I was fixing legal chill for all policy areas, including tobacco but not limited to it. As I see it, it's the tobacco carve-out that fails to take into account legal chill, as it ignores it for all issues other than tobacco. Keep in mind that the vast majority of ISDS cases are not about tobacco. Along the same lines, you say you are not against dealing with issues other than tobacco. But calling for a carve-out for tobacco explicitly ignores those other issues. So, regardless of whether you mean to be against dealing with those other issues, I would say that, in practice, your approach leads to those issues not being dealt with.
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I'm not very familiar with those, but yes, if there are such rules, they would apply. Pretty sure they aren't enforceable, though.
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Thanks, Henning. This feels like it will end up in dispute settlement at some point, although it's hard to say when that might be.
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Thanks, Alan. I don't claim to have any great inside knowledge of this issue, but the message I hear from a majority of members of Congress is: No way are we giving in on GIs at all! But who knows, maybe that is posturing to some extent.
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In terms of internal EU politics, I really don't have a good sense of things. If they can't into the EU, though, there is always EFTA/EEA: http://www.efta.int/eea
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Thanks, Mark. There is a real mix of issues here. Some appear to about alleged de facto discrimination. Some are more about inefficiencies of unilateral regulation. Some relate to a harmonized global standard. I'm not sure why any of the issues should be excluded from the TTIP talks. However, I doubt much progress can be made on most of these.
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Nothing. If we're already fully open in this regard, there is nothing more that needs to be done. I haven't checked GATS commitments on this. I've been assuming that if the EU wants financial services in TTIP, there must be something left to open. Do you know what they are after?
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Thanks. I won't try to rephrase you anymore -- I'll just let your explanations stand!
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Thanks for your insights, Mark. It sounds like you are saying that the US government view is the following: Because someone once proposed TTIP financial services rules that might undermine Dodd-Frank, we now reject any and all TTIP financial services rules regardless of their impact on Dodd-Frank. I'm still baffled by all this. It's really not very difficult to draft trade rules that allow foreign competition into your market, but do not undermine regulation. It seems like, at the least, we could get a commitment to provide national treatment in the financial services sector.
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Marc, See this old post of mine: http://worldtradelaw.typepad.com/ielpblog/2012/07/standards-of-appellate-review.html I can't get the link to the journal to work right now, but hopefully it's just temporarily down, and will be back up soon.
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This may help explain things: "Currently, the majority of off-winery stores -- such as those in grocery stores -- are operated by the two largest Canadian winemakers. Constellation Brands runs more than 160 Wine Rack stores and Andrew Peller Ltd. has 100 Wine Shop outlets. Those stores were grandfathered in after the 1987 Free Trade Agreement with the U.S. Since that time, ontario put a moratorium on stores and new winemakers can only sell product in the LCBo or at their wineries." http://www.thoroldedition.ca/2014/08/25/wine-council-backs-call-for-private-stores
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See also Article 804, para. 2 of the Canada-US FTA: http://www.worldtradelaw.net/nafta/Cusfta.pdf But I can't figure out what the actual measures look like.
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Canada's industry minister just made a new proposal on these issues: http://www.ic.gc.ca/eic/site/081.nsf/eng/h_00007.html I only skimmed it quickly, but it doesn't seem to get into concrete details about how to put the broader goals into effect.
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Thanks, Chris. It seems like there are several options here: -- a nation-wide TILMA -- constitutional amendment/new constitutional interpretations -- a revised AIT with private right of action -- federal action of the sort you propose (maybe you just need to re-brand it -- Canadians may be unlikely to support "nuclear" approaches!) I don't know where this is going, but I like to see people thinking about the fundamentals of economic integration, so I hope it keeps making headlines.
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It may depend on who you mean by "anyone." If you are thinking of international lawyers, you may be right. But did national legislatures have any sense of this? I suspect they did not. And the vagueness comes about because of the scope of this provision. What exactly is "targeted racial discrimination"? Domestic law and policy here varies, and thus its application in investment tribunals has considerable uncertainty.
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Julia, I don't know those details. I'm eager to hear from anyone with expertise on this!
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Jari, To give you one example, the CETA text refers to: "Targeted discrimination on manifestly wrongful grounds, such as gender, race or religious belief" I think we can all agree that gender, race and religious discrimination are wrong, but also that they are still pretty rampant. (And these are just examples. What other types of discrimination are covered?) Do we want international investment obligations to serve as a remedy for this discrimination? How much does this broaden the scope of the investment regime?
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