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Simon Lester
Florida
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Thanks, Henry! Do you have a link?
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Perhaps it does not relate to "approval for … investment"? The facts of all this are very unclear to me.
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Julia, Thanks, this is very helpful! It does seem strange that there has been no claim.
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Joel, I'm not sure exactly what the practice is, so I'd want to know all the details first. But it seems to me that, in some general sense at least, a requirement/incentive to transfer technology to domestic companies could be seen as "partial" under GATT X:3(a).
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Thanks, Krzysztof. Just to clarify, my own view is that all anti-dumping measures are protectionist, because as defined in domestic laws and WTO obligations, dumping is not a problem that needs to be addressed. Thus, anti-dumping tariffs do nothing to promote free markets, and their only effect is a protectionist one. Subsidies are more complicated. In theory, countervailing duties could help reduce the use of subsidies, which would be good and could provide a non-protectionist justification. In practice, I suspect we get duties but no reduction in subsidies. I think it might be better to use SCM Agreement adverse effects complaints to address subsidies. In terms of a political safety valve, I'd like to see safeguards be the exclusive outlet for this.
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No, I've never heard of a clause like that. Would be interesting to see it in action!
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I plead ignorance on the nuances of the Calvo Doctrine. But this language doesn't seem much different than what came before. This is from the famous May 10 Agreement: "This preamble provision would recognize that foreign investors in the United States will not be accorded greater substantive rights with respect to investment protections than United States investors in the United States. We have long recognized this principle as a principal negotiating objective of our FTA negotiations. In particular, the Trade Act of 2002 describes this objective as “ensuring that foreign investors in the United States are not accorded greater substantive rights with respect to investment protections than United States investors in the United States.”" May 10 Agreement As a result, I'm not sure they mean anything by this, that is, it may be just a continuation of previous U.S. policy. But we shall see!
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Hi Rob, I understood "ensuring that NAFTA country investors in the United States are not accorded greater substantive rights than domestic investors" somewhat differently. My sense was that they just meant that the substantive protections in a NAFTA investment protection chapter can't be stronger than what domestic investors get under domestic law. For example, the regulatory expropriation provisions of NAFTA can't be stronger than those under the Takings Clause. Simon
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I assume they mean this situation, described in the US - Wheat Gluten WTO panel report: "8.157 The United States contends that, in its investigation, the USITC found that the serious injury sustained by the domestic wheat gluten industry was attributable to a surge in imports from the EU in 1996 and 1997, accompanied by sustained underselling from EU producers. In a second step, the USITC examined Canadian imports alone and determined that they were not a significant cause of serious injury. This separate causation analysis of NAFTA imports was conducted pursuant to US law, as required by Article 802 of the NAFTA. ... ... 8.160 We see the issue before us as whether, in this case, the United States, after including imports from all sources in its investigation of "increased imports" of wheat gluten into its territory and the consequent effects of such imports on its domestic wheat gluten industry, was justified in excluding imports from Canada from the application of the safeguard measure following a separate and subsequent inquiry concerning whether imports from Canada accounted for a "substantial share" of total imports and whether they "contributed importantly" to the serious injury caused by imports." http://www.worldtradelaw.net/reports/wtopanels/us-wheatgluten(panel).pdf Here's Article 802: http://www.worldtradelaw.net/nafta/CHAP-08.PDF
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Emily, I like the idea of having TPP disputes heard by WTO panels and the AB, but I don't think the change you suggest to Article 28.4 would be sufficient. You would need explicit language to this effect in both the TPP and the WTO Agreement.
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Anthea, I'm wondering if it would help with the debate over a Multilateral Investment Court to do empirical studies on how different kinds of judicial bodies have handled similar claims. For example, we could focus on expropriation claims, and look at they have been decided by various bodies: Domestic courts, the ECHR, Iran-US Claims Tribunal, and investment arbitrators. It's not going to be a perfect comparison, of course, because the claims will not be exactly the same in each. But still, it might help inform the debate about likely judicial outcomes under arbitration vs. a permanent court in the context of ISDS.
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I'm not sure what the current state of things is, in relation to Mexico's earlier complaint. If anyone else reading this knows, feel free to enlighten us!
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In theory, yes, but I'm not sure how it would work in practice. If the U.S. did this in your case, Mexico might do the same in Sugar, which the U.S. would not like.
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With regard to a Chapter 20 case against them, though, they don't have to argue it -- they can just block the panel in the same way.
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I wonder if Mexico just assumed it was pointless -- that you can't get a NAFTA Chapter 20 panel anymore. This would also have implications for the possible Chapter 20 case against Mexico that you suggest. The problems with Chapter 20 are something that definitely need to be dealt with in the NAFTA renegotiation.
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Rob, Is it possible that Mexico did not use NAFTA Chapter 20 for the tuna dispute because of its experience with the earlier Sugar dispute, where (Mexico claims) the U.S. blocked the panel from being composed?
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Welcome to the blog, Anthea, and great first post! One of my favorite economists these days is Caroline Freund, and she made some good points about the elephant graph here: https://piie.com/blogs/realtime-economic-issues-watch/deconstructing-branko-milanovics-elephant-chart-does-it-show. This is an excerpt: "Taken together, many have interpreted the figure as showing globalization helps poor countries to grow at the expense of the lower and middle classes of rich countries, as Krugman did in his lecture. A problem with this interpretation is that there are numerous alternative explanations for the shape. A lot of things happened between 1988 and 2008: For example, the fall of the Soviet Union and the economic stagnation of Japan, driven by its rapidly aging population, caused income in those countries to decline or stagnate, irrespective of globalization. While integration was partly responsible for China’s rise, the shift from a state-run economy to private sector growth mattered enormously. An increase in automated production changed the landscape for manufacturing around the world, with fewer workers needed. Worldwide demand also shifted towards new goods, such as computers and software and improved products like flat screen TVs—companies that failed to see these trends were shuttered, replaced by firms producing the new goods. There were also dramatic policy shifts in some advanced countries, particularly the tax cuts and deregulation carried out by President Ronald Reagan in the United States and British Prime Minister Margaret Thatcher. It is also hard to imagine that international trade could be the primary cause for such a large drop because trade is not a zero-sum game. Countries import goods that are relatively more expensive to produce, so greater imports raise living standards because prices fall. Countries export goods that they are more efficient at producing, so greater exports enhance productivity, which further raises incomes. While it is true that people employed in import competing sectors lose from globalization, economic research suggests that the vast majority of the work force in gains from increased trade. So before lurching to conclusions, it is important to fully deconstruct the animal depicted by the graphic. One important quirk: The image does not show how the 80th percentile from 1988 fared over time. Rather, it compares the 80th percentile in 1988 to the 80th percentile in 2008. So, zero growth doesn’t imply that the incomes of the 80th percentile did not grow. Rather it shows that the 80th percentile in 1988 has roughly the same income as the 80th percentile in 2008. But these two groups may be composed of different populations. For example, the percentile could include primarily US households in one period and Japanese in the next, because both countries underwent changes in the composition of income distribution and population growth." Here's a thought I had on all this. I understand a key point of the elephant graph to be that certain working class people in developed countries have fared badly in recent years. Assuming that is true, I wonder how this same group did in earlier eras. Is it possible that in the post-WWII period, this same group of people did particularly well (in large part due to various societal and governmental factors and constraints), and what we are seeing now is everyone else catching up to their earlier progress?
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Thanks, Markus. A related and important point is the scope of the obligations themselves. With FET, there is almost always a credible claim someone can make. That's how PM v. Uruguay came so close to a complainant winning. I do understand why, for public relations reasons, governments take the approach they do with regard to tobacco. But if they want to solve the broader problem, they should, in my view, think more deeply about the scope of the general obligations and exceptions.
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They may be sued for such measures, but it's hard to imagine the complainant winning.
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Thanks, Cherie, that's very helpful. It's not clear to me what Ross meant here, and perhaps when USTR folks weigh in during internal discussions, any confusion about how the U.S. approaches this will be cleared up.
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For a Chapter 11 (or other ISDS) claim, you don't need to show that the host government gave the foreign government or company assurance of approval. I would say the chances of success on this claim were closer to 50/50.
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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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