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Simon Lester
Florida
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I saw that. I wasn't quite sure what to make of it.
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I'm all for multilateralism, but in the current political climate in the U.S., where bilateralism seems to be the preferred approach, I thought a U.S.-China bilateral might have a better chance.
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Thanks for the comment, Jim! The phrase "aims and effects" is fraught with controversy, and I agree that we are unlikely to see it used by the AB. On the other hand, the Article III:2, second sentence jurisprudence seems to be well liked, and it works even though Article XX exists. I guess what I have in mind is that something similar to the kind of analysis being done under Article III:2, second sentence could also be done under Article III:4, without doing damage to Article XX. Obviously, the language of Article III:4 and Article III:2, second sentence are not the same, but I see enough flexibility in the Article III:4 language to look at policy purpose to some extent. The "design, structure, architecture" formulation works well, in my view, and allows some consideration of these issues.
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Federico, Thanks for your thoughts about strategy on this! I'm really not sure what will work best. People in the EU seem determined to keep FET in, but were willing in CETA to include exceptions for at least some provisions. I thought maybe I could convince them to expand the exceptions to additional obligations, as other agreements have done. My opinion of the CETA "right to regulate" is that it is unlikely to have much impact. But we will see. On GATT Article III, I think the interpretation you refer to was a mistake that will be corrected some day. Looking at public policies works fine under Article III:2, second sentence, and I'm not sure why anyone thinks it would not work in other Article III provisions.
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I was just trying to bring a little levity to these trying times. ;)
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Ross said: "THE PROBLEM WITH REGIONAL TRADE AGREEMENTS IS YOU GET PICKED APART BY THE FIRST COUNTRY. THEN YOU NEGOTIATE WITH THE SECOND YOU GET PICKED APART. AND YOU GO WITH THE THIRD ONE. YOU GET PICKED APART AGAIN." http://www.cnbc.com/2016/11/30/cnbc-transcript-steven-mnuchin-and-wilbur-ross-speak-with-cnbcs-squawk-box-today.html Doesn't seem consistent with the reality of trade negotiations as I understand them, but the Trump folks are all buying into it. It would be great to hear from some people with trade negotiating experience, to see what they say about this.
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Mark, Thanks, this is very interesting! Simon
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Brett, Maybe. But I think the broader context of 15(a) muddies the waters a bit.
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I will be very interested to see what the parties, and also the Appellate Body, say about that Appellate Body statement in Fasteners.
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I'm curious about your position on BITs/ISDS as a general matter, beyond tobacco. Do you think BITs/ISDS serve a useful purpose, or should we get rid of them?
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Just to add to my earlier comment, in this case the alleged harm has been done to the German subsidiary, so I don't see why it is a problem that the subsidiary has to bring the lawsuit.
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I've heard something along these lines before, but I'm not sure why having to sue in German court through a subsidiary is considered an impediment to filing a lawsuit in German court.
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Oh, sure, there's no question the subsidy is a measure. I'm just wondering specifically about the phone call in which he tried to convince them to stay.
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But keep in mind, Trump is not the President yet. Does that change the analysis?
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The U.S. would be able to bring enforceable complaints against Mexico's labor practices under TPP, whereas it could not do so under NAFTA. I don't know what the best word to describe that change is, but "renegotiation" seems pretty close. At the least, it renegotiates the trade rules that apply as between the U.S. and Mexico.
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I'm a skeptic about much USTR marketing, but this one I can buy. Under NAFTA, there are no enforceable labor/environment protections with Canada and Mexico. Under TPP, there are. Hence, a renegotiation.
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If the issue is what is fair and equitable to the investor, as opposed to what is fair and equitable to the home state government, why does it matter if the home state agreed to it?
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I prefer exceptions, but I suppose an exemption could work as well. I'm not convinced this distinction has much impact on the result. An exception might take a little longer, but it would get us to the same place. The more important issue is the particular language used (e.g., "necessary" or "related to.") To the extent there is regulatory chill, a well-written general exception is the most balanced approach. By contrast, with the exemption used here, it seems like they are saying that tobacco control measures can be used to favor domestic tobacco companies over foreign ones, which is a strange approach. As for regulatory chill and industries abusing a privilege, I don't think it's correct to say the tobacco industry is acting differently than any other industry (I don't have the figures, but I doubt they are in the top 10 of industries using ISDS), and I don't see anyone abusing anything. When companies feel their rights are being violated, they threaten to bring cases, and sometimes actually bring cases. That's how the system is designed to work. Now, as I've said, I don't think the international investment system makes a lot of sense, and I think we should get rid of it. But as long as we have the system, I don't see why we get mad at particular companies who use it.
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Christian, But isn't it likely the Canadian company would set up a German subsidiary (or operate through some similar arrangement), and this subsidiary would be a domestic juridical person?
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Australia and NZ have already established a precedent in the TPP for excluding ISDS: http://worldtradelaw.typepad.com/ielpblog/2015/11/no-isds-as-between-australia-and-new-zealand.html
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Rob, This is a clever proposal! I suspect the Obama administration will be reluctant to go along with it, but it's worth a try. Also, I wonder how other TPP parties will react. Some of them may say, if the U.S. isn't going to be bound by this, we don't want to be bound either. I've suggested something along the same lines, although going further: If Hillary Clinton is elected President, and TPP doesn't pass in the lame duck session, she should try to pass a revised version of TPP with ISDS taken out entirely. http://nationalinterest.org/feature/how-president-hillary-could-reverse-course-tpp-17476
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That survey compares national courts across countries (although the rankings seem suspect in a number of cases). What I'd want to see is a comparison of treaty arbitration to specific national courts.
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I commented on the Buffett plan on this blog a while back: http://worldtradelaw.typepad.com/ielpblog/2009/01/buffett-on-the-trade-deficit.html Here's an excerpt: As Buffett himself notes: "There is no free lunch in the IC plan: It would have certain serious negative consequences for U.S. citizens. Prices of most imported products would increase, and so would the prices of certain competitive products manufactured domestically. The cost of the ICs, either in whole or in part, would therefore typically act as a tax on consumers."
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Hmm, yes, maybe that means the situation wouldn't be as absurd as what was happening in Argentina.
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Also, the Stiglitz plan sounds like what was used in Argentina, with results that seem pretty inefficient: "BMW AG's subsidiary in Argentina worked out an agreement to export leather, a type of grape juice, and tons of rice so it could import BMWs, minis and motorcycles to sell. "Rice is not the BMW business, but we had to come up with a solution," said Dan Christian Menges, a BMW Argentina spokesman. ... " http://www.wsj.com/articles/SB10001424127887324595904578117370506750116
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