Our yesterday’s stream was primarily dedicated to the Sec. 301 duties imposed within the framework of Trade Act of 1974m, as amended. We discussed specifics surrounding the Sec. 301 challenge currently pending before the Court of International Trade. However, there is a parallel dialogue about the legality of Sec. 301 duties that is taking place within the World Trade Organization (WTO) regime. On September 15, 2020 WTO issued a report which is available at the following link: WT/DS543/R: United States – Tariff Measures on Certain Goods From China: https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/WT/DS/543R.pdf&Open=True The report concludes that the U.S. argument for imposition of Sec. 301 duties, namely “public morals” are not adequately explained, and therefore has not demonstrated that Sec. 301 measures are “provisionally justified under Article X(a) of the GATT 1994.” Essentially, the “public morals” argument reflected the U.S. position in the USTR’s report about “misappropriation of U.S. technology, intellectual property, and commercial secrets.” It remains to be seen how this will play out in the future, whether through WTO appeal or negotiations outside of WTO framework. But, this struggle further underlines the point that we made during the Bretton Woods stream about changes in the paradigm.
Few days ago Russia became 77th member of World Trade Organization (WTO) to ratify Trade Facilitation Agreement (TFA). The United States also ratified TFA. The U.S. ratification was easy because many of TFA’s terms are already applied in practice (e.g. use of customs brokers, ruling procedure, administrative review, regulatory publications, ACE’s single window, etc.). The major TFA’s benefit for the U.S. would be prosecutorial and investigative power that may increase revelations such as the one that took place with Lumber Liquidators. TFA’s Article 8 titled “Border Agency Cooperation” would allow Customs and Border Protection (CBP) develop “joint controls.” TFA’s Article 12 titled “Customs Cooperation” ¶ 2.1 states: Upon request and subject to the provisions of this Article, Members shall exchange the information set out in subparagraphs 6.1(b) and/or (c) for the purpose of verifying an import or export declaration in identified cases where there are reasonable grounds to doubt the truth or accuracy of the declaration. TFA’s Article 6 titled “Provision of Information” requires members to promptly: 6.1(b) provide the specific information as set out in the import or export declaration, or the declaration, to the extent it is available, along with a description of the level of protection and…
A quick comment on the article that appeared in the Caribbean 360 post. The on-line gambling trade dispute, which the United States lost in the WTO forum, is one of the few cases of continued lack of compliance by the United States (other major one is the zeroing practice in the antidumping duty calculation by the Department of Commerce). What makes the case interesting, and it is not mentioned in the article, is that this case is the testing ground for WTO permission in granting sanctions that would legalize intellectual property rights (IPR) violation (in a form of reciprocal sanctions). Imposing trade barriers, in the case of Antigua, will not more harm to Antigua than the United States. Therefore, the traditional remedy or reciprocal sanctions normally granted by WTO (e.g. raising the tariff for selected goods), will not work in the case of Antigua. The Antigua knows that, and petitions hard for WTO approval of IPR violations. Of course, the United States has traditionally been very proactive in the IPR enforcement, and legalization of IPR violations would set a troubling precedent for the current world’s hegemon. How this show plays out remains to be seen. For the official dispute settlement…
I am pleased to recommend a very interesting article (click here) published by NYC Bar Committee on International Trade that explores tensions and benefits of two competing types of trade agreements: bilateral and multilateral. Special thanks to principal drafters: Helena Sullivan, Stuart Shroff, Mark Du, and Albert Bloomsbury. The article joins a contemporary list of discussions about the potency of international trade agreements. Among other individuals who discuss bilateral-multilateral tensions is a Columbia University professor Jagdish Bhagwati, who is particularly favored by the editor of this blog for his book “Termites in the trading system: how preferential agreements undermine free trade” Professor Bhagwati argues that bilateral trade agreements are detrimental to the progress of international trade and should be disfavored.
Much of international trade literature is devoted to decisions of World Trade Organization pertaining to trade disputes. Indeed, WTO serves as an important forum for resolutions on issues ranging from intellectual property rights to antidumping duties. However, once WTO publishes its decision, the next step is for the country to implement it. In the United States, the role of compliance with WTO decisions has been devoted to administrative apparatus (i.e. executive branch), which includes Department of Justice. However, the system of checks and balances, a backbone of the U.S. political system, has no place in the international trade arena. The U.S. trade lawyers made attempts to introduce checks on executive branch concerning international trade matters through resurrection of Charming Betsy doctrine and other means, but with limited success. Recent attempts and struggle for a more predominant role of the judiciary branch in fulfilling its function as a “check” on the executive is accessed in my recent paper “Enforcement of World Trade Decisions Through Private Cause of Action in the U.S. Courts,” which concludes that for time being, the WTO decision implementation is the exclusive domain of the executive branch.
The WTO has launched a new database on regional trade agreements. Its’ utility is questionable and subject to time test. However, one may find it useful in preliminary planning. It is interesting to see this coming from WTO, as it has been an institution that traditionally opposes regional agreements. Institution’s philosophy has been a global trade barrier reduction on multi-lateral basis (as opposed to bi-lateral).
The World Trade Organization has posted its World Trade Report 2008: Trade in a Globalized World. It is an annual publication that aims to deepen understanding about trends in trade, trade policy issues and the multilateral trading system.