Saturday, January 1, 2022

Can appealing into the void be appealing now?

 This is the last post for the year and it is on trade and climate. 

Recent news of the compatibility of EU's Carbon Border Adjustment Mechanism have been discussed here, here, here and here. The EU CBAM is essentially a carbon tax on imports into the EU based on the carbon content of the product. Initially it covers iron and steel, cement, fertilizers, aluminium and electricity generation. 

The questions of the measure being discriminatory and incompatible with WTO law would engage trade lawyers no end - from non-discrimination to like products to process and production methods debates. A WTO challenge, when the measure is in place, would be likely.

However, what caught my attention in the last week of 2021 is a piece by Christian Haberli on the inevitability of a challenge and what is the way forward. Titled Carbon Border Adjustment Mechanism + WTO = Impasse Totale? he suggests that a possible way out is the defunct dispute settlement mechanism. What I understood of this argument was that the crisis facing the WTO dispute settlement with the Appellate Body crisis is possibly a "quick way" for the implementation of the CBAM.

"... Might the absence of a coercing dispute settlement mechanism in the WTO open a window for the EU to proceed with a "clean and green" CBAM not entirely WTO-compatible?"

It is a non-trivial issue when one states that a non-functioning dispute settlement mechanism can impact effective implementation of WTO rules. The lack of the threat of effective enforcement can be a ground for WTO inconsistent measures to take precedence. While the merits of having such measures may be strong, it no doubt undermines the system. Today, climate change measures, tomorrow national security and day after may be labour enforcement? It seems that a lack of a strong dispute settlement mechanism can re-imagine domestic policy that impacts trade. However, will all WTO members be able to take advantage of this "temporary" stalemate or just a few?

Appealing into the void seems to be appealing now!

See you in 2022.


Saturday, November 20, 2021

Appellate Body and its future - Hear what the experts have to say

For those who missed the webinar on Appellate Body crisis and what the future holds for WTO dispute settlement, here is the video recording of the session. The session had Peter Van den Bossche, Joost Pauwelyn, Simon Lester and Cherise Valles debating on what is in store and how to get there!


The session brought up interesting insights on the standard of appellate review, the impartiality and fairness of judicial review, complexity of WTO cases, alternatives to the Appellate Body and how far they will go, differential deference standard for trade remedy cases and what the future holds for dispute settlement.

One would have to wait and see if the appellate review process gets back on track at the WTO anytime soon. What are the implications of this for multilateral trade rule enforcement, access to a rules based system, reversion to power dynamics in trade relations as well as the efficacy of global rules themselves.





Thursday, November 18, 2021

What will it take to get the Appellate Body back on track?

The Appellate Body at the World Trade Organization has been facing a severe existential crisis for a couple of years now. What can be done to revive it? Is it possible at all? What will it take for the adjudication system to be back on track?

Watch this excellent panel I am introducing on 19th November, 2021 at 10 am EST (4 pm Geneva Time, 8.30 pm IST). Here is the IELP blog reference. 


The zoom link is here - 
https://harvard.zoom.us/webinar/register/WN_u078UN5HQqCiF_IYkaipAw

Monday, November 1, 2021

What next at the WTO Ministerial?

I recently introduced and facilitated a panel discussion on the likely outcomes for XII WTO MC to be held in a few days. Great inputs from Alan Wolff, Harsha Vardhan Singh, J.S.Deepak and Gabrielle Marceau on what the stakes are and what could be realistically achieved. 

Views ranged from optimism on ambitious outcomes to a realism of national interests prevailing. Negotiation at the WTO has always been achieving that balance! Glacial speed negotiations with perennial optimism!

Alan Wolff, former DDG of the WTO, shared the written version of his text here. The video recording of the session is found here.

Watch the panel discussion and await a debrief from a month from now!



Thursday, October 14, 2021

What is needed to end vaccine inequity - another trade and investment treaty?

Covid, unhindered trade and vaccine equity have been at the centre of the debate on resolving the world's largest public health crisis. Doing away with export restrictions on critical inputs, creating adequate manufacturing facilities to waiving intellectual property rights on vaccines have been offered as effective solutions to address the crisis.What is the appropriate policy response both international and domestic to get over the epidemic is a question that engages policy makers the world over.

An interesting solution offered by Chad P. Bown (PIIE) and Thomas J. Bollyky (Council on Foreign Relations) in the PIIE is of having a Covid Vaccine Investment and Trade Agreement (CVITA). They outline the 4 main features of the proposed agreement as follows:

1. Production allocation - whatever vaccines are produced by members of this agreement should be allocated between the global Covax initiative and used domestically. No room for vaccine nationalism here.

2. Subsidize vaccine supply chains - Help manufacturers in increasing production by subsidising their inputs

3. Prohibition of export restrictions on both inputs and final vaccines by signatories to the agreement

4. Transparency -  on supply chains, inputs and vaccine production by signatories.

The authors have mooted this as a deliverable at the XII Ministerial Conference at the WTO. Will the major players agree to this formula? Will the objective of vaccine equity be met with this arrangement? What about a waiver? The authors don't necessarily think it will work:

A second proposal, initially made by India and South Africa, was to waive patents for vaccines. Such a waiver by itself is likely to have only a limited immediate impact on increasing production, given that the main technological impediment to vaccine manufacturing is how to affirmatively transfer production knowhow, not the patent. (There are other impediments to scaling up manufacturing, such as insufficient supply of specialized inputs, inadequate regulatory oversight, and an inexperienced workforce, that a patent waiver would also not resolve.) 

One must assess if this agreement is politically feasible at this stage of the crisis wherein major developing economies are still engaged in providing vaccination to their people. 

Another interesting part of this piece was the diverse ways in which supply chains and production arrangements work for different pharma manufacturers. The supply chains of both Pfizer and Astra Zeneca were laid out.

Monday, October 4, 2021

Lawyers and their role!

Should lawyers never propose changes to the law? Are they bound by the"positivist" notion of what the law is?

An interesting blog piece here on why as a lawyer signing a petition on climate change is difficult by Benoit Mayer.

An equally interesting retort on why this shouldn't matter by Srinivas Burra here.

Well, I think more voices are always welcome in debates on climate change, trade and development  - from positivists to anarchists to reformists to status quo-ists. Keep the debate going on!

Saturday, September 18, 2021

Sovereign Wealth Funds - the next big thing?

The issue of Sovereign Wealth Funds (SWFs) and its role in fostering investment, trade and globalization has been a topic that come up on and off. I haven't followed the debate as keenly but this news of UAE's SWF investing in the UK caught my attention.

The UAE's SWF Mubadala Investment Co. is committed to invest $14 billion over a time frame in the UK in various industries covering infrastructure, technology, healthcare and energy. There is a bilateral investment partnership between the UK and UAE fostering this investment.

SWFs are state owned holding companies which are created by States for various reasons including to invest in diverse portfolios across economies. They could be also funds from commodity revenues that are invested more safely in treasury bills. 

See this rating of the top 100 SWFs with Norway right on top followed by China. SWF is a state led strategy in a market driven model of investment. A number of issues including interplay of geo-political interests would probably guide investments. It would be interesting to see how a dispute would be resolved in the case of a SWF - through the traditional State to State diplomatic mechanism or a investor state dispute settlement framework.

SWFs are about 10% of global assets under management. What role will they play in the global economy? What questions does it raise about the role fo the State and market in global governance? What international institutional arrangements would be made to foster growth of SWFs?