Law Commons^™

Trade, Law And Product Complexity, Katharina Pistor, Daniel Berkowitz, Johannes Moenius

Faculty Scholarship

How does the quality of national institutions that enforce the rule of law influence international trade? Anderson and Marcouiller argue that bad institutions located in the importer’s country deter international trade because they enable economic predators to steal and extort rents at the importer’s border. We complement this research and show how good institutions located in the exporter’s country enhance international trade, in particular, trade in complex products whose characteristics are difficult to fully specify in a contract. We argue that both exporter and importer institutions affect international as well as domestic transaction costs in complex and simple product markets. …

Let's Stick Together (And Break With The Past): The Use Of Economic Analysis In Wto Dispute Litigation, Petros C. Mavroidis

Faculty Scholarship

The treatment of a number of issues that are being routinely discussed in WTO dispute settlement practice could benefit substantially, were economists to be institutionally implicated in the process. As things stand, the participation of economists in dispute settlement proceedings is infrequent and erratic: for all practical purposes, it depends on the discretion of WTO adjudicating bodies. There is indirect evidence that recourse to such expertise has been made, albeit on very few occasions. Institutional reforms are necessary; otherwise, it seems unlikely that the existing picture will change in the near future. A look into ongoing negotiations on the DSU …

Come Together? Producer Welfare, Consumer Welfare, And Wto Rules, Petros C. Mavroidis

Faculty Scholarship

This chapter explains why the dynamic of World Trade Organization (WTO) negotiations tends to lead to the progressive liberalization of market-access barriers promoting consumer welfare. As all agreements tend to be ‘incomplete’, it is a legitimate task of WTO judges to clarify progressively the WTO requirements of nondiscriminatory treatment of like goods and of like services. The additional requirements, in the WTO Agreements on Technical Barriers to Trade and on Sanitary and Phytosanitary Standards, to base restrictive measures on the ‘necessity principle’ and on ‘scientific evidence’, offer useful ‘double checks’ for judicial identification of protectionist measures. While the WTO rules …

The Political Economy Of International Sales Law, Clayton P. Gillette, Robert E. Scott

Faculty Scholarship

The United Nations Convention on Contracts for the International Sale of Goods, or CISG, has been adopted by more than 60 countries in an effort to harmonize the law that applies to international sales contracts. In this paper, we argue that the effort to create uniform international sales law (ISL) fails to supply contracting parties with the default terms they prefer, thus violating the normative criterion that justifies the law-making process for commercial actors in the first instance. Our argument rests on three claims. First, we contend that the process by which uniform ISL is drafted will dictate the form …

The (New?) Right Of Making Available To The Public, Jane C. Ginsburg

Faculty Scholarship

The Berne Convention 1971 Paris Act covered the right of communication to the public incompletely and imperfectly through a tangle of occasionally redundant or self-contradictory provisions on "public performance," "communication to the public," "public communication," "broadcasting," and other forms of transmission. Worse, the scope of rights depended on the nature of the work, with musical and dramatic works receiving the broadest protection, and images the least; literary works, especially those adapted into cinematographic works, lying somewhere in between. The 1996 WIPO Copyright Treaty rationalized and synthesized protection by establishing full coverage of the communication right for all protected works of …

Legal Institutions And International Trade Flows, Daniel Berkowitz, Johannes Moenius, Katharina Pistor

Faculty Scholarship

Globalization and increasing international flows of goods and capital have created a sense that the importance of individual nation states and the public goods they provide, including law and law enforcement institutions, is in decline. Opting out of domestic legal institutions and into those of a third country or into an "international" architecture have been elevated to important complements, if not substitutes for "good" institutions at home. If traders and investors could indeed effectively opt-out of their home jurisdiction's legal systems, we should observe empirically that the quality of domestic institutions has little impact on international patterns of trade flows. …

What's So Special About Multinational Enterprises: A Comment On Avi-Yonah, Merritt B. Fox

Faculty Scholarship

My analysis of the legal challenges posed by the growth of MNEs is based on an examination of a number of the examples used by Avi-Yonah to illustrate the working of his framework: piercing the corporate veil for mass torts (as in the Bhopal toxic chemical release), bribery, bankruptcy, child labor and antitrust. My approach focuses on the ways in which MNEs are special. To what extent do particular forms of behavior occurring within MNEs raise regulatory problems similar to problems raised by the same behavior occurring within other institutional arrangements, and to what extent does it raise problems that …

The Relative Costs Of Incorporating Trade Usage Into Domestic Versus International Sales Contracts: Comments On Clayton Gillette, Institutional Design And International Usages Under The Cisg, Avery W. Katz

Faculty Scholarship

Clayton Gillette's paper on the use of trade usage in reported disputes arising under the United Nations Convention on Contracts for the International Sale of Goods ("CISG") presents a challenge to recent scholarly critiques of modern contractual interpretation. As Gillette explains, much recent writing by economically influenced US scholars in contracts and commercial law has argued in favor of more formalistic methods of interpretation, and against the overwhelming trend of the last half of the twentieth century: a trend toward a more contextual interpretative approach that takes into account a variety of evidence, including the business purpose of the transaction, …

The Case For Tradable Remedies In Wto Dispute Settlement, Kyle Bagwell, Petros C. Mavroidis, Robert W. Staiger

Faculty Scholarship

In response to concerns over the efficacy of the WTO dispute settlement system, especially in regard to its use by developing countries, Mexico has tabled a proposal to introduce tradable remedies within the Dispute Settlement Understanding. The idea is that a country that has won cause before the WTO, and who is facing non-implementation by the author of the illegal act but feels that its own capacity to exercise its right to impose countermeasures is unlikely to lead to compliance, can auction off that right. The attractiveness of this idea is that it offers an additional possibility to injured WTO …

The Case For Auctioning Countermeasures In The Wto, Kyle Bagwell, Petros C. Mavroidis, Robert W. Staiger

Faculty Scholarship

A major accomplishment of the Uruguay Round of GATT negotiations in creating the World Trade Organization (WTO) was the introduction of new dispute settlement procedures. These procedures were intended to provide a significant step forward, relative to GATT, in the settling of trade disputes, in large part by ensuring that violations of WTO commitments would be met with swift retaliation ("suspension of concessions") by the affected trading partners. While the dispute settlement procedures of the WTO indeed represent a considerable improvement over those in GATT, nine years of experience under the new procedures suggests that significant problems of enforcement remain …

Assessing Theories Of Global Governance: A Case Study Of International Antitrust Regulation, Anu Bradford

Faculty Scholarship

An effective, legitimate model of global governance must strike a delicate balance between national sovereignty and international cooperation. As such, governance on an international level is a constantly evolving discourse among multiple actors whose respective roles and influence vary across time and policy realms. The participation of multiple actors in global governance is widely recognized, but there is considerable disagreement as to the appropriate distribution of power among these participants and the optimal pattern for their interaction. We may never be able to construct an ideal global governance model. But the attempt to create such a model by examining the …

The Byrd Amendment Is Wto-Illegal: But We Must Kill The Byrd With The Right Stone, Jagdish N. Bhagwati, Petros C. Mavroidis

Faculty Scholarship

On 16 January 2003, the WTO Appellate Body issued its report on United States – Continued Dumping And Subsidy Offset Act Of 2000 (WTO Doc. WT/DS217 and 234/AB/R). In this report, the Appellate Body condemned the so-called US Byrd Amendment by finding that it was inconsistent with the US obligations under the WTO Agreements on Antidumping (AD) and Subsidies and Countervailing Measures (SCM).

Human Rights, Terrorism, And Trade – Remarks By Lori Fisler Damrosch, Lori Fisler Damrosch

Faculty Scholarship

By putting human rights first and terrorism in the middle, I hope to open up questions about linkages among these regimes and whether measures within one regime can advance objectives of the others.

Afterword: The Question Of Linkage, Jagdish N. Bhagwati

Faculty Scholarship

Commenting on the papers in this symposium is paradoxically a difficult task. The authorsare remarkably distinguished and one can only learn from what they write. Indeed, I have learned much from them (especially from Dean David Leebron's splendid clarification of several aspects of linkage, a paper that shows that he should have been an Oxford philosopher if only he had not been such a successful legal scholar). Yet it is easy for an invited commentator to be overwhelmed by despair because the authors write for the most part as if in a research vacuum. There is little attempt at relating …

Economic Development, Competition Policy, And The World Trade Organization, Bernard Hoekman, Petros C. Mavroidis

Faculty Scholarship

At the recent WTO ministerial meeting in Doha, Qatar, WTO members called for the launch of negotiations on disciplines relating to competition, on the basis of explicit consensus on modalities to be agreed at the 5th WTO ministerial in 2003. Discussions in WTO since 1997 have revealed little support for ambitious multilateral action. Proponents of WTO antitrust disciplines currently propose an agreement that is limited to ‘core principles’ – nondiscrimination, transparency, and provisions banning ‘hard core’ cartels. We argue that an agreement along such lines will create compliance costs for developing countries while not addressing the anticompetitive behavior of firms …

It's A Question Of Market Access, Kyle W. Bagwell, Robert W. Staiger, Petros C. Mavroidis

Faculty Scholarship

In this paper, we argue that market access issues associated with the question of the optimal mandate of the World Trade Organization should be separated from nonmarket access issues. We identify race-to-the-bottom and regulatory-chill concerns as market access issues and suggest that the WTIO should address these concerns. We then describe ways that WTO principles and procedures might be augmented to do so. As for nonmarket access issues, we argue that as a general matter these are best handled outside the WTO, and that, while implicit links might be encouraged, explicit links between the WTO and other labor and environmental …

Berne Without Borders: Geographic Indiscretion And Digital Communications, Jane C. Ginsburg

Faculty Scholarship

This lecture examines the role of borders in the Berne Convention at the time of the treaty's first passage in 1886, and today. The later 19th century was an era of increasing commerce and communication among countries whose domestic production and reproduction of works of authorship had vastly increased, thanks in part to new technologies, such as photography, lithography, and high-speed printing. But at that time, the frontiers between nations often frustrated authors' hopes for control over, or at least compensation for, the international exploitation of their works. Authors' rights ceased at their national boundaries; the world beyond foreboded not …

Crosby And The "One-Voice" Myth In U.S. Foreign Relations, Sarah H. Cleveland

Faculty Scholarship

In Crosby v. National Foreign Trade Council, the Supreme Court invalidated a Massachusetts government procurement statute that barred state entities from doing business with companies that did business in Burma. The plaintiffs, an organization of private companies with foreign operations, challenged the law on constitutional and statutory preemption grounds, arguing that it improperly conflicted with federal foreign relations authority. The Supreme Court limited its holding to implied statutory preemption, finding that the Massachusetts provision improperly compromised the President's ability "to speak for the Nation with one voice." Crosby thus joined a long line of decisions in which the Supreme …

The Securities Globalization Disclosure Debate, Merritt B. Fox

Faculty Scholarship

A global market is developing for the shares of an increasing portion of the world’s 41,000 publicly-traded issuers. This trend has given rise to an active debate concerning what United States policy should be toward regulation of their disclosure practices. This Article is a comment on this debate through the eyes of an active participant

Global Labor Rights And The Alien Tort Claims Act, Sarah H. Cleveland

Faculty Scholarship

Are labor rights human rights? Are some worker rights so fundamental that must be respected by all nations, and all corporations, under all circumstances? If so, who has the authority to define such rights, and how should they be enforced? What is the effect on the global economy of enforcing international worker rights? These are some of the questions confronted by the authors of Human Rights, Labor Rights, and International Trade, a compilation of essays by an international group of scholars, labor rights activists, and corporate executives addressing contemporary topics in the dialectic among labor, trade, and human rights.

The Wto Legal System: Sources Of Law, David Palmeter, Petros C. Mavroidis

Faculty Scholarship

Modern discussions of the sources of international law usually begin with a reference to Article 38 (1) of the Statute of the International Court of Justice (ICJ), which provides:

The Court, whose function is to decide in accordance with international law such disputes as are submitted to it, shall apply:

1. international conventions, whether general or particular, establishing rules expressly recognized by the contesting states;
2. international custom as evidence of a general practice accepted as law;
3. the general principles of law recognized by civilized nations;
4. subject to the provisions of Article 59, judicial decisions and the teachings of the most highly …

The European Intergovernmental Conference: An American Perspective, George A. Bermann

Faculty Scholarship

Peter Herzog's career-long interest in the European Communities makes it especially appropriate to include in this festschrift a contribution on what has become the principal mechanism for reforming the treaties that constitute those Communities. I refer of course to the "intergovernmental conferences," or "IGCs" for short. As this festschrift goes to press, the fifteen Member States are submitting the results of the latest IGC – the 1997 Treaty of Amsterdam – to their respective national ratification processes.

As its name suggests, the intergovernmental conference is a gathering of representatives of the Member States to discuss and eventually agree upon amendments …

The "Original Intent" Of U.S. International Taxation, Michael J. Graetz, Michael M. O'Hear

Faculty Scholarship

The Sixteenth Amendment took effect on February 25, 1913, permitting Congress to tax income "from whatever source derived," and on October 3rd of that year, Congress approved a tax on the net income of individuals and corporations. The United States regime for taxing international income took shape soon thereafter, during the decade 1919-1928. In the Revenue Act of 1918, the United States enacted, for the first time anywhere in the world, a credit against U.S. income for taxes paid by a U.S. citizen or resident to any foreign government on income earned outside the United States. The Revenue Act of …

The Theory Of Preferential Trade Agreements: Historical Evolution And Current Trends, Jagdish N. Bhagwati, Arvind Panagariya

Faculty Scholarship

The theory of preferential trade agreements (Pf A's), or what might be described in policy terms as the General Agreement on Tariffs and Trade (GATT) Article XXIV sanctioned freetrade areas (FTA's) and Customs Unions (CU's), has undergone two phases of evolution, in two very different modes, largely reflecting the contrasting policy concerns of the time. In this paper, we trace this evolution, offering both a historical context and an intellectual coherence to diverse analytical approaches.

Preferential Trade Agreements: The Wrong Road, Jagdish N. Bhagwati

Faculty Scholarship

The nature of FTAs is to offer free trade only to members, not to non-members. Thus, FTAs are two-faced: they ensure free trade for members and (relative) protection against non-members. First-year students of international economics would be asked to shift to a different field if they could not grasp this elementary and elemental distinction, and yet today's politicians imagine themselves to be statesmen endorsing free trade when they embrace these inherently discriminatory PTAs.

As PTAs proliferate, the main problem that arises is the accompanying proliferation of discrimination in market access and a whole maze of trade duties and barriers that …

The World Trade Organization's Agreement On Government Procurement: Expanding Disciplines, Declining Membership?, Bernard Hoekman, Petros C. Mavroidis

Faculty Scholarship

The Agreement on Government Procurement (GPA) – originally negotiated during the Tokyo Round – was renegotiated for the second time during the Uruguay Round. It is one of the WTO's so-called Plurilateral Agreements, in that its disciplines apply only to those WTO Members that have signed it. In contrast to most of the other Tokyo Round codes – e.g., the agreements on technical barriers to trade (standards), import licensing, customs valuation, subsidies, and antidumping – the GPA could not be 'multilateralized'. With the reintroduction of agriculture and textiles and clothing into the GATT, procurement has therefore become the major 'hole' …

The World Trading System, Jagdish N. Bhagwati

Faculty Scholarship

The Uruguay Round is closing this week after a marathon of negotiations stretching well over seven years; so the timing of this panel is exquisite, from my viewpoint. The ceremony, besides, is in Marrakech, an exotic place that sets our minds racing with thoughts of "Casablanca," Humphrey Bogart and Ingrid Bergman. Indeed, one can imagine a movie being made of this historic occasion that will transform the General Agreement on Tariffs and Trade (GAIT) into the World Trade Organization (WTO), with Peter Ustinov cast as Peter Sutherland, the brilliant and portly new director general of the GAIT who finally brought …

Challenges To The Doctrine Of Free Trade, Jagdish N. Bhagwati

Faculty Scholarship

The doctrine of free trade is facing new challenges today. As one surveys the policy arena, questions are raised about free trade by those who worry about Japan (and today this includes many more than the "revisionists") and who argue that free trade with Japan is not gainful. Several environmentalists as well oppose free trade with passion. These concerns relate to what now is called the absence of "level playing fields": "fair trade" as a precondition of free trade is the battle cry.

There is also the fear that free trade, even if efficient, hurts the unskilled and thus immiserizes …

Surveillance Schemes: The Gatt's New Trade Policy Review Mechanism, Petros C. Mavroidis

Faculty Scholarship

In 1986 the Contracting Parties to the General Agreement on Tariffs and Trade (GATT) launched the Uruguay Round of multilateral trade negotiations, the most ambitious round of trade negotiations to date. The Contracting Parties to the GATT agreed in the Punta Del Este Declaration to introduce into the GATT system three new sectors for negotiation: services, trade-related intellectual property rights (TRIPs), and trade-related investment measures (TRIMs). In addition, for the first time in GATT history, the Contracting Parties agreed to devote a negotiating group exclusively to negotiating the tricky aspects of international trade in agricultural products. Another goal of the …

Gatt Membership In A Changing World Order: Taiwan, China, And The Former Soviet Republics, Lori Fisler Damrosch

Faculty Scholarship

My introduction to questions of GATT membership came in 1979 when, as an attorney in the U.S. Department of State, I was immersed in a series of issues concerning trade relations with the People's Republic of China ("China" or "PRC") and Taiwan ("Republic of China" or "ROC"). I kept hearing about the "Chinese seat" in the GATT as if it were some piece of furniture waiting to be taken out of storage and put back in the dining room. The image of a chair is hardly an apt way of visualizing the extraordinarily complex network of legal relationships that exists …