This is Simon Lester's Typepad Profile.
Join Typepad and start following Simon Lester's activity
Join Now!
Already a member? Sign In
Simon Lester
Florida
Recent Activity
Jesse, I don't know if it's "overthinking," but it seems like pretty reasonable thinking. Hard to get in the heads of government officials, but what you said all makes sense.
1 reply
Here's a quote from the article I linked to in the post, which I think is relevant to this discussion: "It is worth noting at the outset, when thinking about DSU Article 11 as a mechanism for appeal, that the language of Article 11 was carried over from the Tokyo Round 1979 Understanding. Paragraph 16 of this Understanding states: 'The function of panels is to assist the CONTRACTING PARTIES in discharging their responsibilities under Article XXIII:2. Accordingly, a panel should make an objective assessment of the matter before it, including an objective assessment of the facts of the case and the applicability of and conformity with the General Agreement …' Thus, paragraph 16 mirrors closely the language of Article 11. Arguably, this language was not designed as the appellate standard of review for factual questions, as it existed prior to there being an appeal mechanism."
1 reply
In your view, which of the various legal standards that the Appellate Body has articulated for Article 11 is appropriate? And is there some case you have mind where a panel did not meet that standard?
1 reply
I would be surprised if the UK -- or other countries with whom the EU is negotiating trade agreements at the moment -- agrees to a referral to the CJEU in that situation. Referral to domestic courts seems time-consuming and unnecessary in these situations. But it will certainly be interesting to see if the EU presses this point.
1 reply
But what if the UK challenges an EU measure in the context of a UK-EU trade agreement, and the dispute settlement panel has to establish how the measure operates as it evaluates the consistency of the measure with the trade agreement. Would the panel refer to the CJEU for that? That's not how things work under WTO law.
1 reply
Jesse, Yes, it would definitely push the boundaries! I can imagine a scenario where a safeguard measure following an AD measure meets the standard, but I don't know if the required facts exist here.
1 reply
This is a really important point that I don't think gets enough attention. When we are talking about why panels or the AB took the approach they did, we have to keep in mind what the parties argued. A lot of the reasoning is a response to those arguments. ("Cogent reasons" is a good example.)
1 reply
DSU Article 17.1 says the Appellate Body "shall be composed of seven persons, three of whom shall serve on any one case. Persons serving on the Appellate Body shall serve in rotation." And yet when the Appellate Body was only composed of three persons, it still heard appeals and issued reports, even though rotation was not possible. If they can bend the rules like that, why not issue a report with only one person on the division? That would be absurd if there were seven ABMs, but since there is only one, it's a logical thing to do.
1 reply
These are all excellent questions!
1 reply
Sure, there is no division, but I can imagine that in the circumstances, someone might consider bending the rules (which have already been bent quite a bit).
1 reply
There would certainly be a question about the legal effect of such a report, but could they just do it anyway?
1 reply
Thanks, Chip, that's interesting. For me, panel blocking is a big problem, while non-compliance combined with rebalancing is not ideal but something we have to accept in some cases.
1 reply
That's a great question, Ted. I've also wondered about that. 5 panelists seems unnecessary and makes the process harder to manage.
1 reply
Hi Jesse, Here's my take. Whether we use the term "precedent" or "persuasive value" or something else, panels are mostly going to follow Appellate Body reasoning, otherwise they will get reversed on appeal. That's just the nature of a two-tiered quasi-judicial system. The terms used to describe this situation don't have a big impact on the practice. I guess the Appellate Body could say, "Hey, panels, you are free to depart from our reports even without cogent reasons," but that would undermine the functioning of the system as governments appealed and the AB (usually or virtually always) reversed and had to complete the analysis. With regard to "cogent reasons," I would think that if a panel disagreed so strongly with a prior Appellate Body report that it decided to take a different approach, it would be pretty easy to characterize the disagreement as based on cogent reasons. As a recent example, the DS534 panel said this: "We are aware that our conclusions in this Report differ from those of the panel and the Appellate Body in US – Washing Machines as well as the panel in US – Anti-Dumping Methodologies (China). 178 This is the result of our objective assessment of the facts of this case, and the applicability of, and conformity with, the relevant covered agreements. We have carefully considered these reports of the panels and the Appellate Body, and found convincing or cogent reasons to arrive at conclusions different from those of the Appellate Body in US – Washing Machines as well as the panels in US – Washing Machines and US – Anti-Dumping Methodologies (China).179" I don't have a problem with this. If a panel strongly disagrees with the Appellate Body, it can put forward its own reasoning and see if it is convincing enough to get the AB to change its mind. (And I wouldn't care at all about an Article 11 violation. The only issue is whether you think you have better reasoning that can convince the AB right away, or perhaps can convince the wider public eventually.)
1 reply
The Draft Decision is here. Here are some quick thoughts on particular aspects of it: "2. The Dispute Settlement Body (the "DSB") has the explicit authority, and responsibility, to determine membership of the Appellate Body and is obligated to fill vacancies as they arise." This is a useful principle to articulate, although of course it can't be enforced very easily. ----- "7. Consistent with Article 17.5 of the DSU, the Appellate Body is obligated to issue its report no later than 90 days from the date a party to the dispute notifies its intention to appeal. 8. In cases of unusual complexity or periods of numerous appeals, the parties may agree with the Appellate Body to extend the time-frame for issuance of the Appellate Body report beyond 90 days. Any such agreement will be notified to the DSB by the parties and the Chair of the Appellate Body." This is the way the Appellate Body should do things, and it's important to get back to this approach. --- "10. The 'meaning of municipal law' is to be treated as a matter of fact and therefore is not subject to appeal." This change fixes a mistake the Appellate Body made. --- "11. The DSU does not permit the Appellate Body to engage in a 'de novo' review or to 'complete the analysis' of the facts of a dispute." I'm not sure what they have in mind with this. The Appellate Body does a lot of completion of the legal analysis, but they refer here to the "facts," so I'm a bit confused. --- "12. Consistent with Article 17.6 of the DSU, it is incumbent upon Members engaged in appellate proceedings to refrain from advancing extensive and unnecessary arguments in an attempt to have factual findings overturned on appeal, under DSU Article 11, in a de facto 'de novo review'." This would be great, although I'm not sure how it can be enforced and whether Members will go along with it. --- "15. Precedent is not created through WTO dispute settlement proceedings. 16. Consistency and predictability in the interpretation of rights and obligations under the covered agreements is of significant value to Members. 17. Panels and the Appellate Body should take previous Panel/Appellate Body reports into account to the extent they find them relevant in the dispute they have before them." I don't think this would have a substantive impact on how panels or the Appellate Body deal with past cases, so I'm fine with it. --- "19. Panels and the Appellate Body shall interpret provisions of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 in accordance with Article 17.6(ii) of that Agreement." The key here is how to apply the second sentence of Article 17.6(ii), but this language doesn't seem to address that issue. --- "20. The DSB, in consultation with the Appellate Body, will establish a mechanism for regular dialogue between WTO Members and the Appellate Body where Members can express their views on issues, including in relation to implementation of this Decision, in a manner unrelated to the adoption of particular reports." This seems like a good idea.
1 reply
I haven't seen anything yet, Brett. Will post about it if I do. That would also be a good question for the hearing.
1 reply
Hi Anthea and Taylor, I think your framework is impressive in the way it captures and categorizes all the various elements of the current ISDS UNCITRAL activity. I don't have anything to add or suggest here. I think you nailed it! What strikes me, though, is that your framework (and visualization) demonstrate how any reconsideration of the purpose and scope of the regime has been buried deep within a broader effort to expand and strengthen the regime. I have three elements in particular in mind: domestic laws, SSDS, and substantive obligations. To me, questions about whether we need this regime and what it should try to achieve are fundamental and need to be asked first. Thus, the initial questions in any reform effort should focus on whether improved domestic laws are better than an international regime; whether SSDS is preferable to ISDS; and what any substantive international obligations should look like. Unfortunately, the way the WGIII effort has been structured, I'm not sure these issues will get enough attention. And I'm curious how we ended up in this position, given the strength of the objections to the existing system. Very broadly, as I understand it (and I confess this isn't really my field!), there was a group of critics arguing that the investment regime is fundamentally flawed (undermines the rule of law, has no economic benefit, creates regulatory chill, etc.), and in that context presented a list of particular concerns with the regime. The critique was strong enough that defenders of the system (the governments who negotiate and litigate investment treaties, the arbitrators and lawyers who work on cases, business groups, etc.) could not ignore it, and felt compelled to respond. In doing so, they took up a number of the issues cited by critics, but largely ignored the more fundamental criticisms. That has brought us to the WGIII process. Instead of focusing on the core arguments about the regime's fundamental flaws, the process seems instead like an effort expand and strengthen the existing system. Of course, buried deep within it, you can see some of those fundamental issues. But given the wide range of issues being discussed, it seems unlikely they will get much substantive discussion. There will be a few paragraphs of brief consideration, but the conversation will be focused elsewhere. One thing that interests me is how the defenders were able to steer the conversation away from the fundamental questions so easily. My guess is that the relevant government officials decided early on that they were going to preserve the system, but they needed to look like they were doing something about the various critiques, so they launched this reform process as a way to accomplish both. What I'd love to see, and I recognize how difficult it would be, especially at the current moment, is a study of how the government officials in charge of all this were thinking about the issues. But it may be a challenge to get that kind of information, and it will take some future Taylor St. John digging through archives 50 years from now in order to find the answer!
1 reply
An authoritative interpretation is fine with me. I'm not sure what the US thinks of this idea. And I'm not sure what others think either. Seems to me that it's worth debating, though, so I keep trying to put it out there!
1 reply
Thanks, Julia. The way I see this proposal is that it would send a message to the AB that the interpretation you noted above is incorrect. It does so by illustrating a specific set of circumstances where there can be more than one permissible interpretation. In the linked blog post, I had a suggestion that goes even further: "The revised Article 17.6(ii) text could say that if the meaning is "ambiguous or obscure" after Article 31(1) alone is applied, then the presumption of multiple permissible interpretations would apply."
1 reply
Thanks for the comment, Harlan. Your interpretation of what the US wants here is certainly a reasonable one, but there is still a lot of uncertainty. We were just trying to address one particular aspect, and resolution of the broader disagreement is a challenge!
1 reply
Yes, but there have been no actual Article IX:2 interpretations.
1 reply
As far as I know (someone please correct me if I'm wrong), there has never been an Article IX:2 interpretation, so in practice this issue does not come up.
1 reply
This is from the Section 301 report: "the Chinese government uses foreign ownership restrictions, such as formal and informal JV requirements, and other foreign investment restrictions to require or pressure technology transfer from U.S. companies to Chinese entities. ... the Chinese government uses its administrative licensing and approvals processes to force technology transfer in exchange for the numerous administrative approvals needed to establish and operate a business in China. " Sounds to me like the US thinks the Chinese government is doing some coercing.
1 reply
I agree. I just find the point interesting nonetheless.
1 reply
There are likely to be different opinions as to what was agreed.
1 reply