International Trade Law Commons^™

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 …

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 …

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

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 …

Europe's Evolving Regulatory Strategy For Gmos – The Issue Of Consistency With Wto Law: Of Kine And Brine, Robert Howse, Petros C. Mavroidis

Faculty Scholarship

This Essay deals with one question: If challenged, how would regulatory restrictions on genetically modified organisms ("GMOs") be judged by a World Trade Organization ("WTO") adjudicating body. Many of the controversies about the effect of WTO law on domestic regulation have been influenced by the view that the law as it stands may well impede the ability of governments to regulate new and uncertain risks to health and the environment. The result in the Beef Hormones case ("Hormones case") is often cited for this proposition. In this Essay we aim to show that, contrary to an increasingly widespread popular …

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 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 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 "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 …

Sectoral Strategies And Participant Commitments: The Keys To Effective Trade And Industrial Policies, Robert E. Scott

Faculty Scholarship

The declining competitiveness of the U.S. manufacturing sector of the most important causes of the decline in real wages and the stagnation in the level of the median family incomes which have plagued the United States since about 1973. Although the reports of the decline in American living standards were greeted with some skepticism when they first appeared in the work of the Economic Policy Institute ("EPI") in 1985, they have now achieved a high level of prominence on the national policy agenda. More recent studies by EPI and other research groups urge two cures for the decline. First, employment …

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 …

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 …

The International Trading System, Jagdish N. Bhagwati

Faculty Scholarship

The 25th Anniversary of the founding of UNCTAD is an occasion to remember, not for its failures, which it shares inevitably with every international organization that is set up to address complex economic issues that concern developing countries with diverse constraints and objectives, but for its successes, which have been unduly neglected.

Here, I shall recount only three of the many intellectual accomplishments focusing on the early lead that UNCTAD has provided on questions that have attracted academic attention and invited policy redress in national and international fora.

The World Trading System: Law And Policy Of International Economic Relations, Lori Fisler Damrosch

Faculty Scholarship

This book serves an important need by providing a clear overview of an increasingly complex subject. The author, a leading figure in international trade law, has distilled his accumulated wisdom into an accessible account of the major features of the world trading system. His intended audience includes not only lawyers, but political scientists, economists, government officials and others as well. While he acknowledges that his own "comparative advantage" is in the legal aspects of the field (p. 6), he places the legal concepts in their political and economic context to write a treatment that will be enlightening to readers from …

International Trade Issues For The 1990s, Jagdish N. Bhagwati

Faculty Scholarship

The open, multilateral trading system, centered on the General Agreement on Tariffs and Trade, is currently at risk. The threat continues to come from familiar directions. But there are new problems too.

Economic Perspectives On Trade In Professional Services, Jagdish N. Bhagwati

Faculty Scholarship

This paper will bring an economist's perspective to bear on three questions raised at this conference by some of the other important contributions:

1. How are services different from goods;
2. What implications do these differences have for the rules we seek to negotiate to free trade in services; and
3. How can we induce the key developing countries, such as Brazil, Egypt and India, which have generally opposed liberalization of trade in services, to support it?

Answers to these questions will naturally bear critically on the narrower question of international trade in professional, and especially legal, services, since recommendations and decisions on …

Directly Unproductive, Profit-Seeking (Dup) Activities, Jagdish N. Bhagwati

Faculty Scholarship

This paper proposes directly unproductive, profit-seeking (DUP) activities as a general concept that embraces a wide range of recently analyzed economic activities, including the subset of rent-seeking activities considered by Krueger. It then proceeds to provide a syn-thesis and generalization of the welfare-theoretic analysis of such activities by developing a fourfold categorization of cases depending on the levels of distortions before and after the DUP activity. Thus a unification and overview of the subject are achieved.

Revenue Seeking: A Generalization Of The Theory Of Tariffs – A Correction, Jagdish N. Bhagwati, T.N. Srinivasan

Faculty Scholarship

In our paper on "Revenue Seeking: A Generalization of the Theory of Tariffs" (1980), we extended the theory of tariffs to include revenue seeking. We also compared tariffs with quotas, under seeking activities associated with the revenues from the former and with the rents (i.e., license premia) from the latter.

Foreign Ownership And The Theory Of Trade And Welfare, Richard A. Brecher, Jagdish N. Bhagwati

Faculty Scholarship

Some standard topics in the theory of international trade are reconsidered in this paper by distinguishing between national and aggregate income when fixed supplies of foreign inputs are present within the home country. Under conditions that would ensure a national welfare gain if' foreign ownership were absent, international transfer, economic growth, or tariff policy might cause a national welfare loss in the presence of foreign ownership. The techniques developed could be applied to other domestic distinctions (such as those based on race, sex, age, or ethnicity) and to the theory of' customs unions in a three-country world.

Trade In Place Of Migration, Jagdish N. Bhagwati

Faculty Scholarship

This is a very useful and welcome study, sponsored by the World Employment Programme of the I.L.O., of the effects that increased trade flows could have on the level of employment in one “receiving country,” West Germany, and two sending countries, “Spain and Turkey,” and their implications for immigration policies.

Revenue Seeking: A Generalization Of The Theory Of Tariffs, Jagdish N. Bhagwati, T.N. Srinivasan

Faculty Scholarship

The theory of commercial policy has recently addressed three phenomena: (i) tariff (quota) seeking or lobbying by potential beneficiaries for the imposition of a tariff (quota), (ii) tariff (quota) evasion, and (iii) rent seeking or lobbying for getting an allocation of the import quota to earn the rents generated. Revenue seeking or lobbying to secure a share in the disposition of the tariff revenues is analyzed here. It is shown that revenue seeking may, even for a small country, result in a reduction in importable output. Furthermore, revenue seeking may be welfare improving. Rent seeking may be welfare improving as …

Contracts, Practice And Law In Trade With China: Some Observations, Stanley B. Lubman

Hong Yen Chang Center for Chinese Legal Studies

Erh Ii gou ("two mile gully") is the street in Peking on which stands the "large import building", the headquarters of the Chinese state trade corporations which purchase machinery, equipment, chemicals and technology from abroad. The punning reference to the protracted length of negotiations there is relevant to this piece, because the writer spent seven weeks between mid-January and mid-April, 1978 participating in negotiations in Peking; the long stay provided an opportunity to test generalizations and to write with some immediacy.

This essay describes the process of negotiating sales of capital goods to the Chinese corporations and the contracts which …

Shadow Prices For Project Selection In The Presence Of Distortions: Effective Rates Of Protection And Domestic Resource Costs, T.N. Srinivasan, Jagdish N. Bhagwati

Faculty Scholarship

The paper addresses the problem of deriving shadow prices for use in project evaluation when the existing allocation is characterized by ad valorem trade distortions. The analysis is used to clarify and resolve the long-standing debate among effective-rate-of-protection and domestic resource-cost proponents as to the respective merits of their measures as methods of project evaluation. The derivation of shadow factor prices is then extended to three major factor market imperfections familiar from extensive trade-theoretic analysis.

Trade Between The United States And The People's Republic Of China: Practice, Policy And Law, Stanley B. Lubman

Hong Yen Chang Center for Chinese Legal Studies

The author examines trade with the People's Republic of China, stressing Chinese commercial practice. He analyzes in detail aspects of negotiations, contracts and dispute-settlement which may be important to potential U.S. purchasers and sellers. The Article concludes with a survey of current problems of law and policy in Sino-U.S. trade.

International Trade And Finance, Jagdish N. Bhagwati

Faculty Scholarship

Professor Tinbergen must hold a record in the number of Festschriften that have been written for him. His students and colleagues have reprinted his essays, as an interesting variation on the usual form of felicitation; and a volume of essays was presented by Bos in 1969. Now, Willy Sellekaerts has produced three volumes towards the same end! In a world of increasing output and diminishing time to read it, it is doubtful whether this Wicksellian phenomenon of exploding Festschriften for a single scientist should be applauded, regarded with amusement, or deplored! Does not the law of diminishing marginal utility apply …