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Simon Lester
Florida
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If the agreements focus on protectionism, I'm not sure how there is any regulatory chill. Also, in that situation, I'm not sure there is much scope for bullying. Of course, if you have investment rules that require "fair and equitable treatment", there is a great opportunity for creative litigation. But that's not a tobacco issue; it applies to all sectors. For WTO disputes that are about protectionism, see: DS227, 300/302, 371, 411, and, arguably, 406.
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I don't think the tobacco industry is abusing the process, any more so than any other industry pursuing complaints is abusing the process. They are using the language that was given to them. If that language is a problem, we should deal with the problem directly, instead of leaving the problematic language and excluding tobacco. And I do think some of the language is a problem. For me, the focus of trade agreements should be on protectionism, in which case there is no need to carve tobacco out.
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To be clear, I'm saying WTO rules are enforceable (through the DSU), whereas WHO/FCTC rules are not.
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Could you clarify? Is this about promoting settlements, or about imposing a check on the power of the AB?
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I can't speak for any of the law profs in question, but I read a bit of Posner's stuff, and I'm not sure there is an "assault" going on here. It's more of a "critical discussion." My sense is that he is saying something along the lines of, there's lots of international law that most people don't take too seriously, and we should recognize that. We shouldn't consider all areas of international law to have equivalent force, and we shouldn't think of international law in the same way we think of domestic law. As Jari says, there is a "complex reality". With regard to governments, I'm not sure there is much difference in terms of how much respect there is for international law. Most governments generally try to comply, but also try to avoid it, at least on occasion, when it applies to them! Not unlike how individuals behave with regard to domestic law. (Are the attempts to avoid WTO compliance much different than efforts to get out of a speeding ticket?) As for legal academics in different parts of the world, I don't know why there are differences. I think a carefully written survey asking legal academics from different areas their views on specific issues in international law would be interesting and might help explain this.
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Joost, I read that decision and thought, oh well, it's just about preemption. No way to get a trade law blog post out of this. I was impressed that you found a way to do it! The whole product-process distinction under III:4 still puzzles me. If a measure has an impact on products in any way, I would have said it's product related. But there has been a surprising (to me) amount of difficulty in convincing people to interpret the provision so broadly.
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Joel, Thanks very much for your thoughts. Let me offer a few counters to your counters: -- The field is often referred to as investor-state "arbitration," but I'm not sure that's the right way to describe it. Treaty-based ISDS isn't like arbitration over a contract, where either side can file a claim. Isn't ISDS really just an alternative kind of litigation? In the U.S., for example, when a company brings a lawsuit alleging a taking, that's litigation, not arbitration. I'm not sure how ISDS is any different from that. -- I didn't mean to suggest that senior domestic judges were always the perfect people to do this. I was more focused on the idea of moving away from the current system. In selecting a permanent body of tribunal members, you would certainly want to look for people with experience in international law or with similar domestic law (e.g. takings). -- You are correct that there are lots of questions about how judges should be selected. But these questions need to be considered, and the current system raises all the same issues. There is no perfect way to do it, but the flaws in the current system seem pretty glaring.
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fixed it, thanks.
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Marc, I think you have a good point about the distinction between Article 11 cases involving the meaning of municipal law, on the one hand, and other Article 11 cases, on the other. Maybe that's the only reason for the different approach. At the same time, I was a little surprised by the AB's approach to this issue in the context of cross-cumulation in DS436. It seemed like a very active review of the issue, and left me with a lot of questions.
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Thanks! I did search after search, but for some reason could not find that post. Simon
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Sungjoon, I didn't mean to imply it was great, but it's better than what we had before! And there may be more actual proposed texts coming. Simon
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I don't have any evidence of this, but my theory is that the U.S. believed it would come out ahead in the litigation, giving it the edge in any negotiations. It's not clear yet if it will play out this way.
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Joost, This isn't a problem, but a proposed solution to some of the problems you identify: Have the WTO Secretariat run FTA dispute settlement. Some issues will be relatively easy: They can provide legal support; they can cover costs; they can publish the documents. Others would be more difficult, but could be handled: Appointment of panelists through the WTO, and use of the WTO AB (which would also make reliance on WTO jurisprudence more straightforward). This also addresses the potential problem of incoherent/contradictory FTA jurisprudence. It's a somewhat radical change, I know, but it makes a lot of sense, and I'm not sure why governments aren't pushing it.
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The example of U.S. aid to African countries having an impact on the decision to bring a trade complaint is important. In theory, these countries could file a complaint and get a favorable result. In practice, there are broader factors at play, and they may be reluctant. That's an inherent flaw in the system, but one that is hard to correct, given the imbalance in power among countries. That power exists in international relations and law generally. It is moderated a bit in the WTO context, but I can't see any way to get rid of it entirely. It seems to me that we just have to accept some limits here.
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Perhaps that consent becomes relevant in determining nullification or impairment?
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Joost, Thanks for your detailed thoughts. There is so much going on with this issue that it's hard to digest it all! One thing that struck me, though, was the language of paragraph 9 of Annex 2.3 to the FTA: "Peru may maintain its Price Range System ..." Couldn't that be interpreted to mean simply there is nothing in the FTA that prohibits this measure? In order for the FTA to legalize the measure more generally (including an exemption from WTO obligations), more explicit language might be required (e.g., "Peru may maintain its Price Range System and Guatemala promises not to challenge it any forum"). Perhaps the language as it stands has the broader implications Peru asserted, but there is definitely some uncertainty as to its impact.
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Jari, Thanks for your comment. Some responses: -- But which governments and courts are corrupted, and in what ways? And how should international rules deal with this? If this is the problem we are addressing, I think we need a more coherent approach. -- Big multinational companies operate all around the world, so are you sure this isn't true everywhere? -- If the UK Land Law were the only piece of domestic UK law, it would be a problem as well. But it's not. Domestic law as a whole tries to take into account everyone's concerns. By contrast, as I see it, international law is fairly effective in protecting the rights of foreign investors, but does very little for anyone else.
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Personally, I don't think you should be able to bring a claim based solely on the VCLT. And I'd be surprised if the AB, if the issue is ever raised, would say that you could. But the view that you can is out there, and it is something that may come up in WTO DS at some point.
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Just to be clear, I'm not arguing that this should be a violation of Article 2.2. But I can imagine that a tobacco-exporting country would argue that it violates Article 2.2.
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Chris, That's a bold vision for the TPP, and I always respect bold visions. I have my doubts, though, that we can expect the TPP to accomplish things like that. It's hard to imagine governments giving a Secretariat such powers, and if the governments themselves wanted to cooperate on such matters, they could just do that now.
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But wait. You say the complaint is not in accordance with the GATT, but we don't know that for sure until a panel finds the measure to be compliant with XX, right? So the complaint is fine under GATT at the time it is brought, but later, a panel might determine that the complaint is actually not in accordance with GATT. My head is spinning! I agree with you that XX should be available as a defense. But I'm skeptical that a WTO complaint as an action would ever not be in accordance with GATT. I'll have to give that one some more thought.
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Even if a WTO complaint were a "specific action" of this type, wouldn't it be in accordance with the GATT? I can't see how it violates the GATT to bring a complaint. The subsidy may or may not be justified under GATT XX, but that can only be decided in WTO DS.
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That's the kind of situation where I imagined GATT XX might come into play. What I'm not sure about, though, is the relevance of SCM 32.1 here. What is the "specific action against a subsidy" in your examples? Are you thinking somebody might impose CVDs on exports of those goods?
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Joel, If I could jump in, do you have an example of the kind of measure you have in mind?
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Chris, Could you elaborate a bit? What kind of political integration do you envision for the region? Simon
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