int’l trade law introduction prof david k. linnan usc law # 665 unit one
TRANSCRIPT
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INT’L TRADE LAW
INTRODUCTIONProf David K. Linnan
USC LAW # 665
Unit One
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ADMIN ICOURSE PAGE AT
http://www.lfip.org/laws665s05/index.htm
READING ASSIGNMENTS IN BOOK, POSTED ON COURSE MATERIALS LINK WITH PARALLEL DOC CITES
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ADMIN IIYOU MUST SIGN UP FOR LISTSERV
laws665 (INSTRUCTIONS AT CLASS ADMINISTRATION LINK ON COURSE PAGE), SEE
http://www.lfip.org/laws665s05/admin.htm
INDONESIANS WILL JOIN US IN EARLY FEBRUARY 2005 & PROJECTS
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ECONOMIC ACTIVITYWHAT DOES THE BELOW MAP TELL YOU
ABOUT COUNTRIES AND ECONOMIC ACTIVITY AS AN UNDERLYING REALITY OF INT’L ECONOMIC LAW?
http://www.lfip.org/laws666spring05/index.htm
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IEL CONCEPTSWHAT & WHY IS INTERNATIONAL
ECONOMIC LAW?
IFIs and monetary law
International trade law
ULTIMATE PROB OF STRONG MIXING OF ECONOMIC CONCERNS/ISSUES
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PIL CONCEPTSWHAT ARE PUBLIC INT’L LAW CONCEPTS BEHIND
INT’L TRADE LAW
Idea of no obligation to even trade internationally because of sovereignty over borders
Idea of no rights of establishment in terms of foreign investment (make versus import/export)
Parallel in idea of monetary sovereignty, but that is other part of IEL
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TREATY CONCEPTPUBLIC INT’L LAW ASPECTs IN NUTSHELL
Sources of law in treaty, customary law, general principles of law
IEL on trade law side is largely treaty law, specifically GATT/WTO since 1947 (history later), plus modern regional agreements & FTAs
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INTEGRATIONWHAT ARE ECONOMIC AS OPPOSED TO
LEGAL CONCEPTS BEHIND INT’L TRADE LAW?
Issues of economic versus political integration, examples:
USEUNAFTAAPEC
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TRADE MODELSKEY ECONOMIC MODELS FOR INT’L TRADE
LAW PURPOSES
Multilateral trading system (GATT/WTO)
Regional or bilateral economic arrangements (integration), traditionally customs unions now FTAs like EU or NAFTA
Further behind cooperative mechanisms like APEC
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ECON CHANGESWHAT IS HIDDEN ECONOMIC PICTURE & HOW
DOES IT DIFFER BETWEEN ECONOMIES?
1. Goods versus services
2. Changing nature of economies at different levels of development
3. Does IEL under trade branch track these changes? So what?
4. Changing patterns of production (intra-industry trade)
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GATT/WTO HISTORYGATT/WTO HISTORY
Idea immediate post-WW II of economic & political causes of the war (1930s economic crisis, rise of fascism as indirect result of trade wars, etc.)
General Agreement on Tariffs & Trade 1947 temporary protocol as part of still-born post-WW II remake of int’l law system
Int’l monetary system mostly made through with Bretton Woods institutions (IMF, World Bank), but ITO effectively cratered leaving only 1947 GATT
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GATT/WTO PRINGATT ORGANIZING PRINCIPLES & ASSUMPTIONS
Most Favored Nations (MFN, all WTO member foreigners get same deal)
National Treatment (foreigners get same deal as locals)
Negotiated Tariff Concessions (incremental rounds practice)
Hidden assumptions on market based economies (were in failed ITO Havana Charter, matter in Cold War idea of non-market economies or Socialists out so China & Russia only now, could be discriminated against)
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GATT/WTO ASSUMPGATT ORGANIZING PRINCIPLES &
ASSUMPTIONS CONT’D
Unanimity rules essentially made dispute resolution voluntary
As a result GATT was more an economic diplomacy forum than a legal system in normal sense
However, not atypical for public int’l law
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GATT TIMEGATT ORGANIZING PRINCIPLES & ASSUMPTIONS
CONT’D
Repetitive round structure for next 35 years
Over time, movement from tariff barriers to non-tariff barriers (NTB) to tarification (meaning converting quota or other NTBs to a reducable number for subsequent rounds, etc.
1994 end of Uruguay Round WTO formation effective second birth of post WW II concept
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1994 WTO SHIFTDISTINCTIVE WTO ASPECTS AS OF 1994 POST-
URUGUAY ROUND
For general WTO character see document at
http://www.wto.org/english/thewto_e/whatis_e/whatis_e.htm
Effort to “legalize” int’l trade law, in part by reversing the procedural presumptions on dispute resolution side so that a country could no longer effectively impede adoption of unfavorable dispute settlement reports
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GATSDISTINCTIVE WTO ASPECTS CONT’D
Expansion from GATT focus solely on trade in goods to new focus to include trade in services under the General Agreement on Trade in Services (GATS)
As a structural matter, industrial country economies moving increasingly to services, so high economic interest in GATS
Using trade law as enforcement mechanism as for broader legal areas (intellectual property, TRIPs in Uruguay Round now pressure growing in environmental area)
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CHANGING PLAYERSDISTINCTIVE WTO ASPECTS CONT’D
Traditionally, trade negotiations were moved by Big Three (US, Japan & EU), now developing country blocks too as they advance economically
Post-1980s the Socialist world has moved from state directed economies to market directed economies, so in change from 1940s GATT direction the former Communist world is now lining up to join the club (China before, now Russia, all major economies with China affecting trade in goods worldwide)
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LEGALIZATION CONSEQDISTINCTIVE WTO ASPECTS CONT’D
As part of legalization trend, the dispute settlement reports are now rapidly developing a kind of interpretive caselaw for WTO treaty provisions
As a result, much focus now on exceptions to MFN or National Treatment kinds of obligations as interpretation counts
Still tension in shift from older economic diplomacy in non-binding GATT to legalized system under WTO, since issue is really what happens if a major player ignores a dispute settlement (e.g., if the Europeans rejected an unfavorable decision on GMO coverage or hormone beef what next)
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DOHA ROUNDDISTINCTIVE WTO ASPECTS CONT’D
Now we are in the early stages of Doha Round, focused on items like trade in agricultural goods, “Singapore principles,” government procurement, trade in services
For general Doha background see WTO document at http://www.wto.org/english/tratop_e/dda_e/dda_e.htm
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FTAsECONOMIC INTEGRATION’S LEGAL SIDE
Regional, expressly discriminatory and considered a sometimes alternative to multilateral trading system
Export-led development model & Asia (political economy)
NAFTA in North America, which may be extended further down into South America within 5 years
But note also things like Singapore-US FTA, so this is not just NAFTA
Bottomline, the clients demand it so the lawyers must learn how to function not only under the UCC but also the framework the clients see on business side
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FTAs & ECON TENSIONANTI-GLOBALIZATION
If globalization is the business model behind free trade or trade liberalization, winners & losers plus social resistance too (WTO Seattle meeting cratered in protest)
In legal sense FTAs permit more addressing of social issues as with NAFTA environmental principles, tension re proper balance in Doha
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REGIONAL TRADE AGMTSECONOMIC ARGUMENTS
1. Second best, but achievable
2. Pre-NAFTA idea was countries at similar level of development (but Mexico changed) & customs union tradition
3. What is difference between FTA & regional communities
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TRADE LAW MODELSMODERN TRADE LAW NOW GOES BEYOND
GATT/WTO ALONE IN PRACTICE TO ENCOMPASS
1. Multilateral trading system (GATT/WTO)
2. Regional agreements & law like NAFTA or EU law, often including investment rights
3. FTAs, but again what is difference between FTA & regional communities
4. Changing emphasis beyond goods to include new areas like services & TRIPs, differences now in areas like investment & competition policy, changing trade & production patterns