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This chapter compares the Trans-Pacific Partnership Agreement (TPP) with the Australia -- United States Free Trade Agreement (AUSFTA), reflecting on relevant developments in the Australia -- United States relationship, including with respect to agriculture and biologic medicines. The chapter focuses on the Chapters on services and investment, addressing areas such as electronic commerce, investor--state dispute settlement (ISDS), and the "carve-out" of tobacco control measures from ISDS in the TPP. The comparison of investment in the two treaties is particularly of interest given the exclusion of ISDS in the AUSFTA and its inclusion (except as between Australia and New Zealand) in the TPP. We conclude that the TPP is a more modern agreement than the AUSFTA with several improvements that provide greater regulatory policy space. However, the inclusion of ISDS as between Australia and the United States in the TPP is questionable.
The lengthy and long-awaited WTO Panel Reports in Australia–Tobacco Plain Packaging contain a host of material for reflection, particularly in relation to the Agreement on Technical Barriers to Trade (TBT) and the Agreement on Trade-Related Aspects of Intellectual Property Rights. While two of the Panel Reports proceed to appeal, we consider with respect to the two adopted Panel Reports the Panel's reasoning in relation to Article 2.2 of the TBT, focusing on the meaning of trade-restrictiveness. This concept central to WTO law has been under-examined to date, and these Panel Reports demonstrate some of the complexities in identifying trade-restrictive measures, particularly where they are non-discriminatory. The Panel found that Australia's measures restrict trade because they contribute to their objective of reducing tobacco consumption. Therefore, any equally effective alternative will similarly restrict trade. This curious result under TBT Article 2.2 may be particular to non-discriminatory measures that target ‘socially bad’ products such as tobacco.
This dispute, brought by Ukraine against Russia, provides the first discussion in a World Trade Organization (WTO) Panel or Appellate Body Report of the security exception in Article XXI of the General Agreement on Tariffs and Trade 1994 (GATT). Unusually for a WTO dispute, the Panel (chaired by former WTO Appellate Body Member Georges Abi-Saab) found that Russia had not acted inconsistently with any of the claimed obligations under the GATT or Russia's Accession Protocol. Central to that conclusion was the Panel's understanding of the GATT security exception and the circumstances surrounding the imposition of the challenged measures, which related to trade in transit by road and rail through Russian territory. The Panel found that, since 2014, an emergency in international relations existed between Russia and Ukraine within the meaning of GATT Article XXI(b)(iii) and that the challenged measures fell within this exception. If the exception had not applied, according to the Panel, Ukraine would have established a prima facie case of violation of the provisions on freedom of transit in GATT Article V:2 and equivalent provisions in Russia's Accession Protocol. The decision, which neither party chose to appeal, has significant implications for other disputes in which the security exception has been invoked.
For seventy years, the security exception in the multilateral trade regime has mostly lain dormant. The exception first appeared in the General Agreement on Tariffs and Trade 1947 (GATT 1947), before being incorporated in the General Agreement on Tariffs and Trade 1994 (GATT 1994) upon the creation of the World Trade Organization (WTO). However, security exceptions also exist in several other WTO provisions, including the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and the General Agreement on Trade in Services (GATS). Until recently, perhaps through a combination of WTO member restraint and fortuitous circumstances, WTO panels have not had to make a definitive ruling on the meaning and scope of these exceptions. Yet, suddenly, the security exception lies at the center of multiple explosive disputes, posing a potential threat to the WTO's very existence.
The WTO general exceptions are crucial provisions that recognize that in some circumstances non-trade objectives will trump trade liberalization. That recognition flows from the fact that trade liberalization per se is not the purpose of the WTO; rather, trade liberalization is a means to achieve other objectives as specified in the preamble to the Marrakesh Agreement Establishing the World Trade Organization, such as raising standards of living and ensuring full employment. The predominant view is that the general exceptions are extremely difficult to satisfy. Indeed, I am aware of only three instances in which a respondent has successfully invoked GATT Article XX; of these, two are compliance proceedings, and one of those is under appeal. However, challenged measures typically fail to satisfy the requirements of the Article XX chapeau because they are discriminatory, and removing that discrimination provides a means of benefiting from the exception.
Pessimism abounds in international economic law. The World Trade Organization (WTO) faces an uncertain future following its Ministerial Conference in Nairobi in 2015. International investment law is under attack in countries around the world, while mega-regional agreements such as the Trans-Pacific Partnership and the Trans-Atlantic Trade and Investment Partnership are beset by world events, from the United States’ federal election to the unexpected Brexit outcome. Yet the appetite of numerous States to continue forging plurilateral trade and investment deals provides some cause for hope. Viewed alongside other institutional developments including consensus-building work at the United Nations Conference on Trade and Development and the United Nations Commission on International Trade Law, the potential arguably now exists for credible movement towards multilateral rules in investment law. While the WTO's current negotiating stalemate highlights the difficulties in reaching agreement among 164 Members, international trade law offers lessons for working towards multilateralism in the international investment law field. Alongside informal discussions about a world investment court, mega-regionals provide a vehicle for future multilateral investment rules, particularly through the Comprehensive Economic and Trade Agreement between Canada and the European Union, and the Regional Comprehensive Economic Partnership currently under negotiation in Asia.
When states withdraw from bilateral investment treaties or denounce multilateral treaties related to foreign investment, a range of intersecting questions arise in domestic and international law. Recent developments have demonstrated potential incongruities between domestic and international approaches to investment protection, including as regards the effectiveness of withdrawal and the implications for existing investments. This essay reflects on international and domestic disputes involving the withdrawal of the Russian Federation from participation in the Energy Charter Treaty (ECT) to highlight these interactions. These issues have become particularly pertinent today because more than 1,500 international investment agreements (IIAs) are nearing expiry of their initial term, providing an opportunity for termination. Moreover, some states have begun to terminate or denounce investment treaties, while many more are engaging in a process of renegotiation and reform. The Russian case study also highlights the potentially far-reaching effects of a state simply signing a treaty, even many years after the state has expressed its decision to withdraw from it, and notwithstanding tensions with the domestic legal framework.
The EC–Seal Products dispute raises fundamental questions about the relationship between public morals and international trade. Can WTO members impose trade restrictions based on moral or ethical concerns? Under what conditions can these concerns trump existing trade liberalization commitments? The dispute was filed in 2009 by Canada and Norway against the EU, which in the same year had banned seal products from being imported and placed on its market. According to the EU, the policy was introduced in response to European moral outrage at the inhumane killing of seals. The EU seal regime included a series of exceptions. In particular, it allowed imports of seal products hunted by Inuit or other indigenous communities, as well as imports of seal products processed and re-exported by EU producers. This article discusses the Appellate Body's ruling in EC–Seal Products and some of the key legal and economic issues raised by this dispute.
Since the first report of the Appellate Body of the World Trade Organization (WTO) in 1996, commentators and practitioners alike have been grappling with the thorny relationship between the WTO and public international law. More recently, problems in interpreting and applying WTO provisions in the light of customary international law and non-WTO treaties have come to reflect a concern regarding ‘fragmentation’ of international law more generally. One reason for this potential fragmentation lies in the disparate dispute settlement mechanisms under various international legal systems, including preferential trade agreements (PTAs), some of which also contain investment obligations and allow for investor–state dispute settlement.
As the future of the Doha Round remains uncertain, PTAs have proliferated. A large number of states are contemplating or commencing PTA negotiations, including the Trans-Pacific Partnership agreement (a trade and investment treaty involving 12 countries including Australia, the United States, Chile, and Singapore), the Regional Comprehensive Economic Partnership (a PTA developing from the Association of Southeast Asian Nations plus six other countries), and a Transatlantic Trade and Investment Partnership between the United States and the European Union. The burgeoning number of PTAs means that the relationship between them and other institutions and aspects of public international law becomes all the more crucial. States evaluating the benefits of PTAs must be fully aware of the broader international context into which they are born and the implications of international law as each PTA develops. Moreover, existing PTA members may seek additional certainty about their PTA rights and obligations and the likely outcome in the event of a dispute relating to other areas of international law. More broadly, an investigation into the relationship between public international law and PTAs provides an additional case study of the perceived problem of fragmentation of international law.
In this chapter, we focus on two primary sources of public international law, namely treaties and customary international law. We also take into account two other sources of public international law, namely general principles of law and judicial decisions and leading commentary. All four sources are included in Article 38(1) of the Statute of the International Court of Justice (ICJ Statute), which is often recognised as providing an informal list of the sources of international law.
Trade-restrictiveness is a familiar concept across various provisions and agreements of the World Trade Organization (WTO), but its precise meaning remains vague. In many WTO disputes, the existence or degree of trade-restrictiveness of a challenged measure is simply assumed or addressed in a few brief sentences. Yet whether a measure is more trade-restrictive than necessary, or more trade-restrictive than a proposed alternative measure, is crucial to the legality of a range of measures currently in place around the world, some under challenge in the WTO. A careful analysis of the existing case law and treaty text – focusing on Article 2.2 of the Agreement on Technical Barriers to Trade and the general exceptions in the General Agreement on Tariffs and Trade 1994 and the General Agreement on Trade in Services – demonstrates that while the existence of discrimination is likely to restrict trade, discrimination is not necessary to establish trade-restrictiveness, which also necessarily arises from direct barriers to market access such as import bans. In the absence of an explicit barrier to imports, a WTO panel is likely to focus on the extent to which a challenged measure negatively affects the competitive opportunities of imported products vis-à-vis domestic products.
The Trans-Pacific Partnership Agreement (TPP) has an ambitious agenda and could radically reshape trade in the Asia-Pacific. At the same time, TPP obligations have the potential to significantly restrict the ability of governments to regulate in the interests of public health. This paper examines the impact the TPP could have on two areas of public health regulation—tobacco control and access to medicines. It concludes that a number of legitimate concerns arise from the known content of the TPP, that the inclusion of a general health exception would be the preferable means of safeguarding the regulatory space of governments in relation to public health, and that the United States’ proposals for stronger intellectual property protections be resisted. With negotiations shrouded in secrecy, TPP parties’ desires to promote international trade and investment must not overshadow the need of governments to be able to implement sensible and effective public health policy.
Similar to the General Agreement on Tariffs and Trade (GATT), the General Agreement on Trade in Services (GATS) imposes requirements of reasonableness and impartiality on World Trade Organization (WTO) members with respect to their administration of certain measures. This general obligation of procedural fairness offers a potentially powerful mechanism for ensuring equitable treatment for traded services and service suppliers beyond the substantive disciplines of WTO law, such as those related to discrimination. Yet, the provision has been subject to relatively little extended commentary or jurisprudence, perhaps because of an underlying concern about the sovereignty implications of WTO dispute settlement organs assessing the reasonableness of WTO members’ administration.
Further exploration of the requirements of GATS Article VI:1 is warranted, not only due to the potentially wide-reaching nature of the provision itself (particularly in view of the importance of licensing, access and similar decisions in the context of trade in services), but also due to the existence of corresponding concepts of reasonableness in other GATS provisions. For example, references to objectivity, impartiality and reasonableness appear elsewhere in the GATS domestic regulation provision, Article VI. GATS Article VI:2(a) provides that where judicial, arbitral or administrative review of administrative decisions affecting trade in services is ‘not independent’ of the agency that made the decision, members must ensure that the review procedures ‘in fact provide for an objective and impartial review’. GATS Article VI:3 requires that members’ competent authorities advise decisions ‘within a reasonable period of time’ after the submission of a complete application for authorization to supply a service on which the member has made a specific commitment.
Cases concerning the regulation of tobacco have long existed within the World Trade Organization (WTO) and its predecessor, the General Agreement on Tariffs and Trade 1947 (GATT 1947), although often these cases have not centered on the detrimental health impact of tobacco products. With the 2012 circulation of the Report of the WTO Appellate Body in U.S.—Clove Cigarettes, the potential friction between international trade law and tobacco regulation in the context of public health has come to the fore. In that Report, the Appellate Body found in part against the United States’ flavored cigarette ban. Combined with the ongoing WTO challenges to mandatory plain tobacco packaging in Australia—Tobacco Plain Packaging, governments might begin to fear that the WTO agreements represent an insurmountable barrier to ambitious tobacco control measures. However, careful examination of the Clove Cigarettes case alongside the two other recent Appellate Body Reports (U.S.—Tuna II (Mexico)5 and U.S.—COOL6) on the WTO's Agreement on Technical Barriers to Trade (TBT Agreement)7 demonstrates that the TBT Agreement has ample flexibility to accommodate health objectives underlying tobacco regulation.
As the global financial crisis threatens to manifest in enhanced protectionism, the economic irrationality of dumping, countervailing, and global safeguard measures (so-called ‘trade remedies’) should be of increased concern to the Members of the World Trade Organization (‘WTO’). Long tolerated under the WTO agreements and perhaps a necessary evil to facilitate multilateral trade liberalization, elimination of trade remedies is far from the agenda of WTO negotiators. However, a small number of regional trade agreements offer a model for reducing the use of trade remedies among WTO Members in the longer term, consistent with WTO rules and broader public international law.
Patent protection for pharmaceutical products as mandated in the Agreement on Trade-Related Aspects of Intellectual Property Rights (‘TRIPS Agreement’ or ‘TRIPS’) of the World Trade Organization (‘WTO’) represents a potentially significant obstacle to public health measures, particularly for developing countries seeking to import medicines to deal with serious public health concerns, such as the HIV/AIDS crisis. Since 2001, WTO members have acknowledged this tension while working slowly towards a formal amendment of WTO rules that would facilitate compulsory licensing of pharmaceuticals for the benefit of least-developed country (‘LDC’) members, as well as other members lacking sufficient manufacturing capacity to use the existing flexibilities in the TRIPS Agreement in respect of public health. As the first shipment of drugs from Canada to Rwanda under the new arrangements has recently taken place (in September 2008), we take the opportunity to reflect on the steps taken to date within the WTO to resolve the patent/public health tension.
In section 2, we explain why WTO members needed to reform the TRIPS Agreement in order to improve access to medicines for public health reasons, before turning in section 3 to the temporary solution reached in the form of a waiver of certain TRIPS obligations. In section 4 we then consider the more permanent solution of a formal amendment that is envisaged for the future. This chapter then turns in section 5 to consider how the waiver has been used in practice.