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Simon Lester
Florida
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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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Thanks, there are some really interesting issues with the treatment of local government measures that have never really been dealt with. Some day a case will come along and we will have to sort it out!
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I agree those are interesting questions! But I don't have an answer.
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Bryan, Can you give some details? Where exactly have they pulled back from what was agreed? And do you think there are implications for how the Republicans proceed?
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Thanks, Jari. I'm no human rights expert, but my sense is that the right of individuals to sue governments for human rights violations is not widely available (there are only a couple regional courts of this kind). And it is rare that a human rights court can offer real remedies. To take an example of the difference, under the NAFTA, foreign investors can sue host governments, but there is no human rights equivalent. So, for those who support these investor rights, my question is: Should there also be a North American human rights tribunal, where individuals can bring claims and there are real remedies?
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John, What do you mean when you say "all tribunal proceedings are posted on-line"? I'm pretty sure that's not the case right now. Many are, but some aren't. There is a movement to post more online, but I don't think we're quite there yet in terms of transparency for all of these proceedings.
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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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