"Made in California" labelling - Protectionism?

We are familiar with the Buy American provisions. Now a proposed Bill in California that encourages "Made in California" labelling is making the news. News about it is found here. The Bill is found here.

The purpose of the Bill is stated here:

"The Made in California Program, a public and private collaboration, is hereby created within the Governor’s Office of Business and Economic Development. The purposes of the program are to encourage consumer product awareness and to foster purchases of high-quality products manufactured in this state."

Private businesses can participate in the program on a voluntary basis. I am not sure if there is a GATT violation here but the Canada-US Blog termed it as State Protectionism.

"Canadian manufacturers and exporters should be concerned about the proliferation of State Buy America initiatives. This is just one example of a developing problem for cross-border trade."

It may just be a labelling program without any international trade law implications. Or who knows - a Canada-Us dispute at the WTO?

Oil tar sands gets sticky

I had blogged about the issue of oil tar sands more than a year ago here, here and here. It is essentialy related to a potential dispute between Canada and the EU over labelling of oil extracted from the tar sands of Canada as more polluting than other conventional fuels.

I thought the controversy had died down but it seems to have erupted once again with this recent report that Canada is considering taking EU to the dispute settlement mechanism as the measure is allegedly discriminatory.

An interesting comparison with beer consumption in the EU is brought out here by Friends of Science who argue that the labelling is discriminatory:

“In Canada we create useful fuel products from the Alberta oil sands that drive world industry,” says Maier. “We also don’t come to the EU with a “Stop the Beer-maggedon” campaign trying to destabilize your economy.” 

According to calculations by Friends of Science, EU beer production accounts for 0.4% of EU carbon emissions. That means carbon dioxide emissions attributed to total EU beer production is more than half of the emissions from the oil sands – all just for entertainment and getting drunk, while oil sands provides the energy for value-added industrial development and jobs."

So, less of beer and oil from tar sands in the coming years? 

Will watch this space for a potential WTO challenge...

A lac and more

A big thank you to everyone for the 1 lakh mark. No more celebration of numbers, I promise!

The next DG officially announced

It is official. The likely selection of Roberto Azevedo as the next DG of the WTO was made yesterday by the Chairman of the Trade Negotiations Committee:

On the basis of all of the above, and in keeping with the Procedures, our assessment of the preferences provided to us by you during this third round of consultations is that the candidate from Brazil, Mr. Roberto Carvalho de Azevêdo is the candidate most likely of the two to attract consensus, on the following basis:

• Mr. Azevêdo carried the largest support by Members in the final round and has consistently done so in each round; and,

• he enjoyed support from Members from all levels of development and from all geographic regions and has done so throughout the process.

The next step would be convening of a special meeting of the General Council on Tuesday 14 May 2013 where the sole item on the agenda will be the appointment of the next Director-General of the WTO. At that meeting, and in accordance with the provisions of paragraph 19 of the 2002 Procedures,the name of Mr. Azevêdo as the candidate shall be submitted as the most likely to attract consensus and recommend his appointment by the General Council as the next Director-General of the WTO for a period of 4 years starting 1 September 2013.

This brings to an end the selection process of the next chief of the multilateral trading institution.

The Winner is...

Though not officially announced on the WTO website, reports of the next WTO chief are coming in - It would be Roberto Azevedo from Brazil. Reuters confirmed it here. IELP reiterated it here.

Lot of hopes of reviving Doha, to tackling politically sensitive issues in international trade to a greater involvement of developing countries in the multilateral system are pinned on this new selection of the chief.

An interesting aspect in the Reuters report about the currency undervaluation issue that Brazil has raised at the WTO:

"Azevedo has led an effort to get the WTO to discuss the impact of exchange rates on global trade, which many members do not consider a relevant issue for the trade body and one that should be dealt with at the International Monetary Fund. 

The currency debate is unlikely to gain traction under Azevedo's tenure as head of the WTO because it would need member countries to take it forward."

Whether it will receive any traction at the multilateral trading body is anybody's guess.

Over to the next DG of the WTO in September.

The Economist on the next DG, WTO

The Economist could not have been far behind with the selection of the DG of the WTO reaching the final stages. 

It had this to say:

"Where there are differences between them is in the way the countries sponsoring them, Brazil and Mexico, see trade liberalisation. Brazil, with a large domestic market that is enshrined in the country’s constitution as part of the national patrimony, has been a less-than-fervent advocate of free trade. Mexico has become one of the most open manufacturing economies in the world since joining NAFTA, even if it is overdependent on the United States. In some ways this divergence represents a rift that runs down the centre of Latin America, as well as through the WTO.

          ...

A decision on the WTO leadership is expected in May. Whoever wins, both Mr Blanco and Mr Azevêdo insist they will act independently of their governments. But their nationalities mean that the choice will inevitably send a wider signal."

And the winner is...

Cuba joins the battle

Cuba is the latest entrant to the Tobacco Plain Packaging dispute with reports that it has sought consultations with Australia on the measure trickling in. Cuba had already reserved third party rights in a WTO dispute that was initiated by Ukraine against Australia. I have blogged about this here, here and here. NYT covered this news recently here.

Interesting facts about the Cuban challenge:

1. It is Cuba's first WTO dispute settlement case - either as a complainant or a respondent

2. Cuba, a developing economy, is challenging a developed economy (Australia) on the grounds that it's intellectual property rights have been allegedly infringed - the use of TRIPS by a developing country against a developed economy (The allegation is that it is normally the other way round)

3. With the Dominican Republic and Cuba joining the challenge, it seems to be a Caribbean battle against plain packaging of tobacco.

While on the one side pubic policy imperatives of public health drive the legislative moves of tobacco plain packaging, impact on local employment in developing economies and its impact on trade and jobs is forcing a legal challenge at the international forum. 

Just another example to show that trade measures are not just about trade - it has a far reaching impact on employment and growth.