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111. International Investment Law and the Rule of Law

Author:
Peter-Tobias Stoll
Publication Date:
12-2018
Content Type:
Journal Article
Journal:
The Goettingen Journal of International Law
Institution:
The Goettingen Journal of International Law
Abstract:
International investment law appeals to a lawyer’s appetite for the rule of law by disciplining the exercise of power between States and foreign investors through legalization and judicialization. Originally supposed to serve as a fix to promote foreign investments in developing countries in times of legal uncertainties, now, thousands of bilateral investment agreements exist, and the number of cases in investment arbitration has exploded in the last decade. Further, there is a tendency of generalization, as investment protection now features as a standard element of international trade agreements, far beyond the original focus on developing countries. A number of flaws and shortcomings of the rules and procedures became apparent in the course of the more frequent use of the system and resulted in much discussion within the expert community, which resulted in some changes. Furthermore, the long neglected possibility became apparent, that investment claims could be directed against industrialized countries and that the conduct of their authorities could be subjected to review by international arbitration tribunals. This sparked heated public debates, particularly so in the EU. These two developments have in common, that they implicitly as well as explicitly raised the issue of the rule of law. This paper will assess the system of international investment law as it stands, its critique and its reform, through the lens of the rule of law. It will also make a highly idealistic proposal on the further development of international investment protection. In concluding, it will reflect on the proper use of the rule of law in legal analysis, by setting out the different perspectives in which the term may be employed, and the methodological consequences.
Topic:
International Law, International Trade and Finance, Rule of Law, and Investment
Political Geography:
Global Focus

112. Toward a Rules‐​Based International Monetary System

Author:
John B. Taylor
Publication Date:
06-2018
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Over the past few years I have been making the case for moving toward a more rules-based international monetary system (e.g., Taylor 2013, 2014, 2015, 2016a, 2016b, 2017). In fact, I made the case over 30 years ago in Taylor (1985), and the ideas go back over 30 years before that to Milton Friedman (1953). However, the case for such a system is now much stronger because the monetary system drifted away from a rules-based approach in the past dozen years and, as Paul Volcker (2014) reminds us, the absence of a rulesbased monetary system “has not been a great success.” To bring recent experience to bear on the case, we must recognize that central banks have been using two separate monetary policy instruments in recent years: the policy interest rate and the size of the balance sheet, in which reserve balances play a key role. Any international monetary modeling framework used to assess or to make recommendations about international monetary policy must include both instruments in each country, the policy for changing the instruments, and the effect of these changes on exchange rates. Using such a framework, I show that both policy instruments have deviated from rules-based policy in recent years. I then draw the policy implications for the international monetary system and suggest a way forward to implement the policy.
Topic:
International Cooperation, International Trade and Finance, Monetary Policy, and Central Bank
Political Geography:
Global Focus

113. Global Issues and Business in International Relations: Intellectual Property Rights and Access to Medicines

Author:
Yoshiko Kojo
Publication Date:
01-2018
Content Type:
Journal Article
Journal:
International Relations of the Asia-Pacific
Institution:
Japan Association of International Relations
Abstract:
In international relations, globalization transfers the location of governance from nation-states laterally to such private actors as nongovernmental organizations (NGOs) and multinational firms, as well as vertically to local governments and supranational organizations. The purpose of this article is to clarify how the competitions among firms affect the problem of global issues by examining the case of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) and public health. This study shows why most of least developed countries implemented the TRIPS despite the warning of NGOs not to implement earlier for the sake of access to medicines. In order to understand the positive attitude of least developed countries toward the TRIPS, we have to examine how the distribution of pharmaceutical firms capacities in developing countries affect the implementation of the TRIPS Agreement. The existence and different capacities of generic pharmaceutical companies in developing companies are important elements of state policy toward the TRIPS.
Topic:
International Relations, Globalization, International Trade and Finance, Intellectual Property/Copyright, Business, and Medicine
Political Geography:
Global Focus

114. Adapting International Trade Institutions to New Realities

Author:
Felix Pena
Publication Date:
02-2018
Content Type:
Working Paper
Institution:
Council on Foreign Relations
Abstract:
The institutional order governing world trade is going through a critical period. Debate over its future form and design will be a dominant theme on the global agenda for the coming years. The Donald J. Trump administration has questioned the benefits of the multilateral trading order and is pulling the United States back from its traditional leadership role. In December 2017, the Eleventh Ministerial Conference (MC11) of the World Trade Organization (WTO) ended in disappointment with no substantive multilateral achievements. The shift in economic power from the West to the East and the growth of nonstate actors further complicate the search for consensus on international trade rules, leading to a so-called multiplex world. In a multiplex world, actors with different cultural values and relative power inequalities—such as nation-states, international and regional institutions, corporations, and nongovernmental organizations—compete against each other. To ensure a resilient trading system, multilateral trading rules and institutions need to be adapted to these new realities of trade, investment, and the distribution of global power. Unlike the international system as it functioned after World War II, today’s trading system does not reflect the interests of a single power or an alliance of powers with sufficient clout to impose their will on others in a sustained way. This is not a Group of Twenty (G20) or Group of Seven–led world: it is a G-Zero world, with no established lineup of who should be invited to the table where decisions are made. In this vacuum of global leadership it is increasingly difficult to identify who will create the new rules of international competition. Actors pursue their own self-interest, which results in less certainty for the international trade system.
Topic:
International Trade and Finance, Multilateralism, Trade Wars, and WTO
Political Geography:
Global Focus

115. Global Monetary Policy Divergence and the Reemergence of Global Imbalances

Author:
Daniel Gros
Publication Date:
06-2018
Content Type:
Working Paper
Institution:
Council on Foreign Relations
Abstract:
Developed economies are paying remarkably little attention to coordinating their monetary policies. This is an unavoidable consequence of the independence of central banks, which faithfully follow their purely domestic mandates except in times of crisis. As a result, global monetary policies have reached unprecedented levels of divergence. This divergence is set to widen—primarily due to differences in the relative strength of labor markets—while global current account imbalances return. Meanwhile, exchange rates have not reacted as economists expected; the dollar has weakened even as policy rates have increased. Economic tensions will likely become more disruptive the longer global imbalances go uncorrected. Likewise, the global economy will become more vulnerable to shocks. Yet by focusing on bilateral trade imbalances, the United States has mistakenly singled out China when the global imbalances between the United States and the eurozone is the more critical issue. The growing global imbalances are reflected more in the eurozone current account surplus and U.S. fiscal policy than in China’s shrinking surplus.
Topic:
International Trade and Finance, Monetary Policy, Exchange Rate Policy, and Economic Inequality
Political Geography:
Global Focus

116. Global Governance to Combat Illicit Financial Flows

Author:
Council on Foreign Relations
Publication Date:
10-2018
Content Type:
Working Paper
Institution:
Council on Foreign Relations
Abstract:
International efforts to curb illicit financial flows (IFFs) resemble post–Cold War collaboration in other issue areas that have risen on the global agenda: climate change, global health, internet govern- ance, and cybersecurity. Nongovernmental actors, including private corporations and nongovern- mental organizations (NGOs), have often driven agenda-setting in those domains. The focus has shifted over time, as new issues have been added and as older issues have assumed renewed im- portance. That reshaped agenda has in turn affected the institutional ecosystem of global action, which is captured only in part by formal and informal intergovernmental institutions. These new is- sue areas are characterized not by a single dominant institution or core set of institutions but by mul- tiple clusters of institutions that have each claimed a segment of the agenda and the instruments of cooperation. The result is a fragmented landscape with disjointed actors and organizations that often compete, collaborate, and act in parallel in pursuing their collective ends.1 The term of art for such an institutional landscape, one with several institutional or legal founda- tions, is “regime complex.”1 The regime complex for combating IFFs differs in its complexity from other, similar issue areas. Defining IFFs produces disagreement among researchers, activists, and policymakers. “Illicit” captures a normative judgment perhaps broader than “illegal.” For law en- forcement, IFFs are framed by predicate crimes, activities that are illegal in one jurisdiction or anoth- er and often of greater interest to authorities than IFFs. For those interested in broader global out- comes, such as the effects of IFFs on economic development, “illicit” could include cross-border fi- nancial flows associated with activities that they believe should be forbidden, such as tax avoidance by multinational corporations (MNCs). Those activities may not be illegal, however.2 These categories shift over time: bribery of foreign officials by corporations based in Organization for Economic Co- operation and Development (OECD) countries was made illegal in the United States well before it was criminalized in other industrialized countries. Variations in national treatment of both IFFs of certain kinds and the underlying predicate crimes have made harmonization of national policies and their implementation in many IFF domains difficult. IFFs are also one of the most important features of globalization’s dark side. Unlike other illicit or dangerous cross-border flows, however, IFFs bear almost no markers in and of themselves: pecunia non olet. Tainted food, endangered species, and dangerous individuals all present fewer problems of identification. For IFFs, it is suspicious activity rather than a characteristic of the funds themselves that generates the attention of those attempting to curb the flows. These definitional and identification problems make measuring the effectiveness of counter-IFF policies more difficult than assessing the effectiveness of policies in other issue areas. As many skep- tics and critics have pointed out, without a clear grasp of the scale of underlying flows, the scale of effects, though perhaps not the direction, of policies to counter those flows cannot reliably be deter- mined.3 If the costs of enforcement and compliance or unintended negative effects are included in estimates, the balance sheet becomes even more uncertain. International collaboration to curb IFFs and domestic measures to support that collaboration are directed to a wide array of predicate crimes that produce IFFs (drug trafficking, terrorism, or tax eva- sion) or to negative externalities (global “bads,” such as corruption) that both support IFFs and are sustained and promoted by them. This diversity of IFF sources and effects, and the public policy goals that follow, mobilize an unusually large number of actors: law enforcement agencies, financial super- visors and ministries, private financial institutions, and NGOs. These actors are interested more in certain IFFs and predicate crimes than in others. The links between specific crimes or categories of crime and larger global outcomes of interest, whether economic development or international securi- ty, are often second or third order. As a result, political attention to these issues—and willingness to bear the costs of implementation—fluctuates over time and across jurisdictions. As Peter Reuter and Edwin M. Truman observed in their classic 2004 account, the anti–money laundering (AML) regime (a subset of the complex countering IFFs) “reflects shifting priorities, compromises, and trade-offs.”4 This variation over time is particularly important in combating IFFs, because enforcement depends largely on national governments and both their incentives and their capacity to enact anti-IFF poli- cies. Financial markets and naming-and-shaming campaigns can strengthen those national efforts; they can also direct attention and effort against particular IFFs. However, they cannot substitute en- tirely for government action. What follows is a summary and introduction to organized international efforts to combat IFFs. In order to limit the policy universe, the narrower definition of IFFs used by the World Bank—“money illegally earned, transferred, or used that crosses borders”—will be used to define the wider interna- tional regime complex to combat IFFs.5 Mapping the institutions and actors involved in this issue area over time will capture the evolution of the global IFF agenda and the politics surrounding its de- velopment and implementation.
Topic:
International Trade and Finance, Governance, Institutionalism, and Illegal Trade
Political Geography:
Global Focus

117. The Content of a WTO Climate Waiver

Author:
James Bacchus
Publication Date:
12-2018
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation (CIGI)
Abstract:
Neither the trade regime nor the climate regime has so far displayed any willingness to confront the coming clash between climate ambitions and trade rules. To minimize the economic and political risks of such a collision, the members of the World Trade Organization (WTO) should adopt a WTO climate waiver. To further carbon pricing and to facilitate the necessary green transition in the global economy, the core of a WTO climate waiver should be a waiver from the applicable trade rules for national measures that: discriminate on the basis of carbon and other greenhouse gases used or emitted in making a product; fit the definition of a climate response measure as defined by the United Nations Framework Convention on Climate Change; and do not discriminate in a manner that constitutes a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade. A WTO climate waiver should also include support for trade restrictions by carbon markets and climate clubs, trade disciplines on fossil fuel subsidies, and green subsidies that support innovative outcomes rather than particular technologies. Along with a climate waiver, WTO members should also confirm that carbon taxes qualify as border tax adjustments under trade rules. The adoption of a WTO climate waiver is a central and critical part of the overall reimagining of international trade law that is needed to fulfill the stated WTO goal of engaging in trade and other economic endeavours consistently with the objectives of sustainable development.
Topic:
Climate Change, International Trade and Finance, World Trade Organization, and Green Technology
Political Geography:
Global Focus

118. Busier than Ever? A Data-Driven Assessment and Forecast of WTO Caseload

Author:
Joost Pauwelyn and Weiwei Zhangb
Publication Date:
04-2018
Content Type:
Working Paper
Institution:
Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
Abstract:
Conventional wisdom has it that, in recent years, the legalized mechanism of dispute settlement before the World Trade Organization (WTO) has been “busier than ever”, “a victim of its own success”. This paper uses count data to assess the WTO’s current caseload and examines how it has evolved since the WTO’s creation in 1995. We also forecast panel and Appellate Body (AB) caseload ten years from now using different scenarios. WTO dispute settlement does, indeed, currently experience a peak in terms of the total number of cases pending before panels and the AB (as of 30 April 2018, respectively, 18 and 8). However, this is not due to an increase in new cases filed (new consultation requests markedly reduced, from a high of 50 in 1997 to “only” 17 in 2017), but rather because pending cases take much longer to conclude as they have become more complex and are often delayed for lack of human resources. In addition, fewer cases filed get formally settled (from 20% in the first five years of the WTO to almost zero after 2014), appeal rates remain very high (on average 68%), and the share of follow-up disputes over compliance (DSU Art. 21.5) has markedly increased, all three factors leading to more (pending) caseload without actually more (new) cases filed, or more panel or AB reports issued (the number of reports produced per year has actually gone down, dropping from a peak of 26 panel reports and 13 AB reports in 2000, to “only” 13 panel reports and 6 Appellate Body reports in 2017).
Topic:
Economics, International Trade and Finance, World Trade Organization, and Global Political Economy
Political Geography:
Switzerland and Global Focus

119. Customs unions in international law: from concept to practice

Author:
Michal Ovádek and Ines Willemynsa
Publication Date:
05-2018
Content Type:
Working Paper
Institution:
Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
Abstract:
Relative to the study of free trade agreements, customs unions (CUs) have been neglected in international law scholarship, despite the fact that by no means do they constitute a recent phenomenon. The present article aims to fill this gap by conducting a scoping analysis of the concept of customs union and identifying key issues in CU designs. The article problematizes what is understood by the concept of CU and what is entailed by the foremost definition of CUs, found in Article XXIV of the General Agreement on Tariffs and Trade (GATT). It further investigates how recurrent design issues are resolved in practice by different CUs considering the inherent tension between the enactment of common rules and institutions and state sovereignty. We find variety in the historical, economic and legal conceptualizations of CUs, flexibility and lacunas in Article XXIV GATT, and diversity of CU designs along with a discernible concern for the legal arrangements’ impact on state sovereignty.
Topic:
Economics, International Trade and Finance, Global Political Economy, and Unions
Political Geography:
Global Focus

120. Gender-inclusive governance for e-commerce

Author:
Amalie Giødesen Thystrup
Publication Date:
07-2018
Content Type:
Working Paper
Institution:
Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
Abstract:
United Nations' 2030 Sustainable Development Goals' SDG 5 places gender equality front and centre for sustainable development. The Joint Declaration on Trade and Women's Economic Empowerment on the Occasion of the WTO Ministerial Conference in Buenos Aires in December 2017 brings gender equality to the forefront of trade policy. In the intersection of trade policy and digital technologies, this paper examines how electronic commerce can work towards gender equality, filling a knowledge gap about gender-inclusive governance. Legal-empirical analysis of key regulatory and policy challenges facing women in e-commerce, and identification of vehicles for gender equality at the regional and multilateral level are followed by policy options for promoting women participation in e-commerce. The paper presents a framework for understanding the multiplicity of gender gaps as they manifest themselves in e-commerce models, suggesting potential but also concerns, and advances a multi-level approach to incorporating gender-inclusive e-commerce regulation into trade policy.
Topic:
Economics, Gender Issues, International Trade and Finance, Women, Digital Economy, and Sustainable Development Goals
Political Geography:
Global Focus