Seal trade dispute - It is not sealed yet

The Seals dispute case has attracted a lot of attention in international trade law circles. The Panel decision found the exceptions to the import ban to be inconsistent with EU's obligations under the TBT Agreement.

However, the battle is not yet done. Canada and Norway, who were complainants in the case have preferred appeals to the Appellate Body at the WTO. The details are found here.

Particularly Canada stated this in the notice of appeal:

"Canada submits that the Panel erred in finding that the EU Seal Regime is provisionally justified under Article XX(a). Specifically, the Panel failed to interpret and apply the first element12 of Article XX(a) correctly, by ignoring the words "to protect", and thereby omitting to determine whether the sale in the European Union of products derived from commercial seal hunts created a risk to an EU public moral.13 It also erred in its interpretation and application of the necessity test under Article XX(a) with respect to the issues of the contribution of the EU Seal Regime to the identified objective, and with respect to the reasonable availability of the alternative measure advanced by Canada already noted above in the context of Canada's request for review under Article 2.2 of the TBT Agreement.14 In addition, although it came to the correct conclusion that the EU Seal Regime is not consistent with the requirements of the chapeau of Article XX, the Panel erred in its reasoning in coming to this conclusion.15"

The Public Moral issue back to the forefront once again?

 

Currency manipulation issues in trade agreements - To be or not to be?

Fred Bergsten's latest Peterson Institute's Policy Brief titled "Addressing Currency Manipulation through Trade Agreements" arguing for currency issues to be taken up in regional trade agreements is found here.

For a contrarian view, that currency manipulation issues should not find place in trade agreements, read this piece in Mireya Solis in the Brookings Institution blog.

"For the many reasons highlighted above, TPP countries are unlikely to agree that the current proposals in the United States on currency manipulation are a faithful interpretation of the IMF principles to which they already subscribe. Demanding that American trade negotiators introduce such a chapter at this critical stage in the negotiation process is akin to throwing a wrench in the works of the single most important trade initiative under way: one that will determine whether the United States is a key actor in shaping an Asian regional economic architecture or not, and one that will also affect the fate of negotiations with Europe. It would also mean that the United States is prepared to forego the possibility of a future Chinese entry into the TPP and give up the sizable benefits of promoting greater market reform, regulatory transparency, and compliance with intellectual property rules, to name just a few. All of this, for the sake of an unworkable proposal on currency manipulation."

Currency manipulation provisions in trade agreements - Imminently feasible or unreasonably optimistic?

Joseph Stiglitz on trade agreements

Academics often do write (often critically) about policy challenges and trade policy. However, when the likes of Joseph Stiglitz write, it does evoke interest.

Came across this letter from Joseph Stiglitz written to trade negotiators. I do not normally write about intellectual property issues nor about trade agreements but what I found interesting in this letter is seeking a TRIPS minus outcome in a trade agreement.

"At this point in time, we do not need a TRIPS plus trade agreement, we need a TRIPS minus agreement. The TPP proposes to freeze into a binding trade agreement many of the worst features of the worst laws in the TPP countries, making needed reforms extremely difficult if not impossible."

Hat tip to International Political Economy Zone for this one.

How deep is globalisation?

Pankaj Ghemawat and Steven A Altman have come out with this exhaustive report on globalisation titled "Depth Index of Globalisation 2013" which "provides up-to-date data and analysis on the depth or intensity of globalization and relates it to what we call the big shift: the rising proportion of many types of activity occurring in emerging economies. It points out that overall, globalization’s post-crisis recovery stalled last year, as a result of which the world is still less deeply interconnected today than it was in 2007. It also shows that while growth in emerging economies has slowed somewhat, the big shift continues."

The 10 take-aways from the report are:

1. Globalization’s post-crisis recovery stalled last year, leaving the world still less deeply interconnected in 2012 than it was in 2007. Macroeconomic weakness was the main culprit, but there is also evidence of increasing protectionism.

2. Foreign direct investment depth plummeted 21% in 2012 and the share of the world’s economic output traded across national borders declined modestly, but growth on the information and people pillars continued. The number of international tourist arrivals crossed the 1 billion mark for the first time.

3. Internet fragmentation has become a growing concern even as international bandwidth continues expanding. Interactions on social media, like other information flows, mostly remain domestic and regulatory impediments may curtail the potential of technological advances (e.g., cloud computing) to expand them. 

4. The big shift in the share of world output from advanced to emerging economies continued, with the latter driving most of the growth of international flows even as the largest among them, China, significantly reduced its reliance on exports and foreign investment. 

5. Emerging economies are only about one-quarter as deeply integrated into international capital and people flows and one-ninth as globalized in terms of information flows as advanced economies, but are roughly at parity with respect to international trade.

6. The big shift has already driven profound changes in the pattern of globalization, e.g., declining regionalization of merchandise exports after increases for most of the post-war era. If emerging economies tend toward advanced economies’ levels of globalization as they grow wealthier, the big shift beyond trade has only just begun.

7. Multinational firms are struggling to keep up with the big shift. While multinationals from emerging economies remain few and far between, firms from advanced economies are falling behind their new competitors. Their people, in particular, have not globalized as fast as their operations and sales targets.

8. At the regional level, Europe is still the most deeply globalized region despite recent setbacks. Sub-Saharan Africa and South & Central Asia lag the farthest behind—although South & Central Asia did experience the second biggest increase in depth of globalization in 2012, behind North America. 

9.Strengthening international flows could bolster macroeconomic recovery, with every country (and region) possessing untapped possibilities to increase its depth of globalization through domestic as well as international policies.

10. Looking ahead, the largest threat to globalization comes from policy fumbles rather than macroeconomic fundamentals, since the world economy is still projected to grow faster from 2012-2018 than over any of the past three decades.

I have earlier blogged about Pankaj Ghemawat's works here.

WIll Iran be the next WTO member?

After Russia will it be Iran to be the next WTO member? The report here suggests it is inching towards membership. 

The status of accession of Iran to the WTO officially on the WTO website indicates a number of steps still to be concluded.

WIll Iran be WTO's 160th member?

Public Morality as an exception - More shades of grey

Roger Alford has this brilliant piece in Opinio Juris on the scope and limitations of the "public morals" exception in Article XX(a) of the GATT contextualising it in the aftermath of the Seals dispute case. He rightly observes:

"Fifth, the public morals exception may become the new battleground for WTO litigation. Rather than consistently ignoring this exception and rushing to litigate Article XX(b) (protection of human, animal, or plant health or life) or Article XX(g) (protection of exhaustible natural resources), the new litigation strategy may be to identify how a trade restriction advances ethical concerns of the Member State. In the future, we may see IP piracy restrictions justified as a reflection of public concern about the morality of stealing, a carbon tax implemented out of moral concerns for the ethics of sustainable development, and restrictions on any number of Chinese products justified out of concern that Chinese workers are subjected to a mandatory one-child-per-family policy implemented through forced abortions. After EU–Seal Products the public morals argument is open for creative interpretation."

While the public moral exception can serve legitimate public concerns, can it become a tool for protectionist policies? Would it be used in the coming decade to justify import restrictions, including import bans of products made "immorally" or "unethically" from national standards? Though import bans seem less likely to be justified due to the inherently discriminatory nature of the measure since the local product is not prohibited, what if it is justified due to the nature of making the foreign product that is against a country's public morality"? Is there is possibility of "subjectivity" being justified in the garb of "objective" public morality? Will trade rules benefit or be a victim of this widely worded exception?

As in many other areas in international trade law, more shades of grey here than black or white.

Of governments and their role

An interesting piece titled "Don't give up on the power of governments" on globalisation and role of governments in challenging times is found here. While governments are often compared, at times unfairly, with well performing corporates, the enormity of the challenges are often under estimated.

"But, on another level, the attempt to rate government alongside business and the media is fundamentally misguided: no sector operates at the scale of responsibility, accountability, and expectation that governments do. 

Business decides for itself where to invest and grow. Media indulge themselves in a fast-moving news cycle. Government enjoys neither luxury. It cannot simply pack up and move on when it faces a loss or is bored with a story. Government must stay put – and must often clean up the messes left behind by those who do not. On a good day, it may even get to make improvements. 

The problem for governments, more often than not, is that in attempting to respond to and reconcile often conflicting individual, family, and national needs, their ability to deliver results efficiently and effectively has declined. As a result, trust in government has plummeted."

Often n the debate on globalisation, the issue is of the State versus the market. The debate is ideological at times and is fuelled by prejudice rather than rationale. May be there is a middle path of recognizing the limitations of both unbridled State power as well as inescapable market failure, of recognizing their respective roles and of working together to make lives better.

International Vote Buying?

Talk about corruption in domestic politics, especially during elections, is a common thread in many discourses in national economies. But have you ever wondered about vote buying in international politics?

An interesting read appeared in the Harvard International Law Journal on "International Vote Buying" which tries to contextualise vote buying in the context of decisions in international organisations.

Time to address this issue too?

More WTO disputes in 2014

2014 is going to witness some interesting disputes covering issues regarding anti-dumping duties imposed by EU on biodiesel from Argentina, energy adjustments imposed by EU on Russian energy imports, taxes on car imports by Brazil.

Here are some trailers:

Argentina vs. EU 

Russia vs. EU (Not yet reported in the WTO website)

EU vs. Brazil (Not yet reported on the WTO website)

Bali or no Bali, the dispute settlement process of the WTO is on a roller coaster ride for sure!

Happy New Year

A Very Happy New Year to you all. 

And I will be more regular in my posts in 2014!