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Abstract:
Acting on complaints by Brazil, the World Trade Organization (WTO) adopted in Spring 2005 two dispute settlement reports that not only require changes to U.S. and European agricultural subsidies, but alter the balance of concessions reached in the 1994 Agreement on Agriculture, further complicating the task of tightening agricultural disciplines underway in the Doha Development Round. The Cotton report reclassifies from the green box (permitted subsidies) to the amber box (subject to reduction commitments) two U.S. programs whose payments are based on historical acreage and yields and thus were thought by most observers to be decoupled both from price and production, the archetypal exemption from reduction commitments for non-trade distorting subsidies.

The panel concluded that the so-called "fruit and vegetable exception," which results in reduced payments if the grower plants certain crops, was sufficient to link payments to production, despite evidence that virtually all cotton recipients would in any event have continued to plant cotton on their base acreage. The panel went on to find that subsidies to cotton producers exceeded the U.S. reduction commitment in the Agreement on Agriculture and caused world cotton prices to be "significantly suppressed," an actionable form of injury to Brazil's cotton exporters under the WTO Subsidies Agreement.

We conclude that it is difficult to argue with the Panel's finding that price support programs tied to world prices have market insulating effects on farmers and a negative impact on world cotton prices. However, even in the absence of U.S. cotton policy, world cotton prices may be distorted from widespread use of subsidies by other cotton-producing nations. As a result, the Panel's statements concerning price suppression in the absence of U.S. cotton policy should be interpreted with caution, because price suppression can exist even in the absence of the U.S. cotton policy. Even more importantly, the Panel's failure to quantify either the magnitude of the subsidies or the nature of the price effects leaves governments without a road map to conform their agricultural support programs to these strict-liability interpretations of WTO mandates.

The EC sugar regime establishes production quotas for two categories of sugar, labeled "A sugar" and "B sugar." These are the maximum amounts of sugar that may be sold within the EC in a given year. Producers must export any surplus amounts, designated "C sugar." Domestic prices for A and B sugar are supported by an array of government measures and also receive direct export subsidies. EC sugar producers receive no additional funds from the EC if they export a large amount or no C sugar. The Sugar panel found that "A, B or C sugar are part of the same line of production and thus to the extent that the fixed costs of A, B or C are largely paid for by the profits made on sales of A and B sugar, the EC sugar regime provides the advantage which allows EC sugar producers to produce and export C sugar at below total cost of production."

The Sugar panel's finding that below-cost exports of an agricultural product may, even in the absence of "direct" export subsidies, represent proof of export subsidization if there is close linkage between these exports and domestic support programs makes the U.S. rice, corn, soybeans, and other commodities programs vulnerable to dispute challenge. The finding also substantially complicates the EC's task of bringing its sugar regime into compliance with its reduction commitments under the Agreement on Agriculture. If the 4 million tons of "C sugar" exports benefit from prohibited "export subsidies," either these exports must be eliminated or their subsidization must be ended. The former approach will put the EU in breach of its agreements with ACP countries and with India. The latter will be difficult, if possible at all, without elimination of domestic support for "A" and "B" quota sugar, because the Sugar opinions leave the EC with little guidance as what level of domestic support would end "C" sugar cross-subsidization. As in the Cotton case, the lack of quantification has left the losing WTO Member in a position of not knowing how to bring its subsidy program into compliance.

Using both subsidies law and trade economics, we argue that these decisions markedly change the starting positions in the Doha Round by blurring distinctions between the "boxes" that were clear to agriculture negotiators during the Uruguay Round, as well as distinctions between domestic and export subsidies crucial to the balances struck in the Agreements on Subsidies and on Agriculture. No matter how destructive of efficient markets large subsidies may be, these cases should not be seen as proof that developing countries can bring to justice rich nations that abuse their financial power to cause injury. The cases simply demonstrate that an agricultural superpower can take advantage of technical traps caused by imprecise drafting and an increasingly literal WTO dispute settlement system with a built-in bias against deference to national agencies to penetrate its most desirable markets.

agriculture, subsidies, WTO, dispute settlement

Abstract:
With their unremitting and inevitable intersections, trade and human rights would seem ideal candidates for natural alliance to accomplish their complementary goals. Trade's guarantees of collective freedom, non-discrimination, property rights, and the rule of law protect the corresponding human rights to individual liberty, protection from discrimination, the right to private property, and guaranteed access to the judicial system. Tragically, the reality has seen neither alliance nor coordination. Often, even simple recognition of the other policy is lacking.

Three propositions portend for us the way to end trade's splendid isolation from human rights. First, global trade rules contain an abundance of effective but unexplored safe harbors to shelter human rights measures from sanctions for violation of trade's non-discrimination and other defining pillars. Second, the unheralded indirect effects of both the World Trade Organization (WTO) and regional trade free agreements (FTAs) in forcing governments to act with greater transparency and accountability have resulted in substantial advancement of human rights compliance. Finally, we can no longer seriously question that governments have an obligation to include in trade agreements enforceable provisions that ensure compliance by signatories with fundamental human rights.

At GATT's creation in 1947, negotiators could be forgiven the failure to appreciate trade's inevitable effects on human rights. Such ignorance no longer can be countenanced in the crafting of trade treaties that have transformed the world over the past 30 years into an unstoppable engine of economic growth with near fathomless power to change the standard of living of every global citizen. Each new treaty is not only born into the corpus of existing public international law, including human rights treaties and custom, but each new trade negotiation must accept the facts that half a century of ever-broader trade rules have revealed. Trade's inexorable growth has, as economists predicted, created winners and losers. Trade's winners mostly have been transnational corporations able to reduce costs by seeking out countries with a comparative advantage in their products, usually without concern either for the human lives or the natural resources abused in that search. Trade's biggest losers have been the human rights of workers, of environmental and thus human health, of women, of indigenous populations, of the poor, of development and developing countries generally.

Trade agreements must assume some responsibility to deliver the human rights promised by a dozen U.N. treaties. For the same reasons that a developing country cannot today justify the worst forms of child labor by citing to similar U.S. and European abuses during industrialization of those countries in the 19th century, trade negotiators cannot fail to use the unique power of globalization to eliminate poverty, to make a reality of non-discrimination, to protect the traditional knowledge of indigenous populations, to ensure the raising of women out of second-class status, to protect core labor rights. Trade's right to regulate for human rights purposes must become trade's obligation to regulate consistently with human rights law.

international trade, human rights

Abstract:
Past research confirms that trade and human rights are inextricably linked by trade's effects on poverty, labor, women, indigenous populations, health, and the environment. We identified surprisingly direct linkages between these two vital policies in WTO agreements as well as that regional trade agreements add positive indirect contributions by to rules-based governance through their emphasis on transparency, accountability, and due process by governments, as well as timeliness, inclusive record keeping, and impartiality in the administrative decisional process. The present research examines a particular country and a single trade agreement, Peru and the trade agreement between Peru and the United States.

Against the backdrop of Peru's large informal economy and its past reliance on the capital-intensive mineral and metal industries, the paper examines the potential effects of diversification of exports from increased foreign investment and continued access to the U.S. textile and apparel market. We address the Agreement's unique recognition of Peru's biodiversity and its inevitable connection to Peru's indigenous populations, in addition to the opportunities such recognition presents for cooperative efforts aimed at protecting the environment and preserving traditional knowledge while permitting research for lifesaving medicines. We look at the ability of the labor chapter of the Agreement to focus efforts of the Peruvian government to enforce fully its worker rights laws. We close with a look at infrastructural changes that Peru's Government may best undertake to magnify the Agreement's benefits. For example, efforts to strengthen the linkages between the knowledge centers and the potential knowledge users in the business community are necessary steps to take advantage of the new technologies so essential to solving the social and environmental challenges that Peru faces.

international trade, regional economic arrangements, human rights, environmental protection, labor rights

Abstract:
In past studies, we explored the more visible and controversial linkages between international trade law and non-trade issues that span a broad range of vital interests we may collectively describe as human rights law. We have addressed the widespread criticism that international trade rules are insensitive to basic human rights and that globalization has done little with its enormous power to preserve exhaustible natural resources and otherwise promote sustainable development, to alleviate the gap between rich and poor, to encourage states to grant their citizens basic human rights contained in U.N. treaties, to resolve the often conflicting policies underlying essential human rights and trade goals, and generally to integrate trade and critical human rights law on the global front.

Our focus in this essay is on the contribution of regional free trade agreements to the rule of law. We conclude that FTAs have pronounced effects on attainment of rules-based governance. Provisions in FTAs that encourage transparency, accountability, and due process by governments, as well as dispute settlement systems that promote timeliness, inclusive record keeping, and impartiality in the administrative decisional process are powerful allies to right-minded governments interested in symbiotic avenues to advance for their citizens the rule of law, by which we mean formal justice that promotes liberty.

The notice, publication, timeliness, and record keeping provisions of FTAs, in particular, seem to have outsized effects in promoting rules-based governance. These requirements turn a mirror onto the process of government itself, revealing its strengths and weaknesses at once both to public officials and to their constituencies, often with positive effects on the lawmaking process that could not have been predicted even by the officials who negotiated the provisions. They institutionalize measures the government already is taking to advance the rule of law, thus serving as the government's conscience and relief force.

Even if trade negotiators accept our essay's thesis, many questions make its immediate application problematic. For example, what steps should negotiators take to account for the specific cultural premises and substantive norms that frame the rule of law concept for use in a particular society? Is it realistic to expect that one could discover a confluence of such premises and norms within a region, for example, Central America or the Caribbean, so that regional negotiations may be undertaken among trading blocs, or must each country be addressed separately?

At bottom, we may ask, are trade agreements, despite their importance to society as mechanisms to spur economic growth, simply unsuited as instruments to improve human rights for civil society in general, because the meat and bones of trade treaties lie in reducing barriers to open trade through nondiscrimination principles, when we know that most human rights priorities use discrimination as their most powerful avenue of enforcement? We hope our study will encourage further work in this important area.

Abstract:
Chapter 19 of the NAFTA transfers judicial review of U.S., Canadian, and Mexican government investigations under the controversial anti-dumping and countervailing duty (AD/CVD) laws from national courts to binational panels of private international law experts. The system stands as a unique surrender of judicial sovereignty to an international body, a hybrid of national courts and international dispute settlement with as yet no parallel in the world of international trade or other international law regimes. Binational panel decisions have been controversial because agencies chafe at their intimate examination of agency findings and supporting evidence. Panels also are viewed as substantially more likely to overturn agency conclusions than national courts. Given the record of chapter 19 NAFTA panels, the paper examines whether the system created to fill a unique need among the NAFTA parties may have broader utility, albeit one perhaps less true to its original purpose.

U.S. recalcitrance on proposed changes to its AD/CVD laws (and its agricultural subsidies) were the principal reasons that Brazil forced Free Trade Area of the Americas (FTAA) talks onto the back burner to await the Doha Round results on these issues. The United States is unlikely to condone major changes to the WTO Anti-Dumping and Subsidies Agreements, which will become the final sticking point for reaching agreement after members resolve the agriculture issues now blocking conclusion of the Doha Round of multilateral trade negotiations. Thus, trade remedies will again surface as major issues once FTAA talks resume. Studies indicate that binational panels reverse agency decisions at a greater rate than national courts and that existence of the system has reduced the rate of filing of industry requests for AD/CVD investigations.

Rather than attempting to finding an elusive middle ground of substantive revisions to these laws, might changing the method of review of agency determinations furnish a missing piece in the puzzle of FTAA negotiations? Although Brazil's (and other FTAA country) officials may at first glance see nothing in a Chapter 19 process that addresses their substantive AD/CVD conflicts with the United States in such cases as orange juice and steel, reflection may reveal that Chapter 19 has demonstrated yet again what good lawyers have always known, that procedure can become substance in the twinkle of an eye. In short, more than one way exists to reduce the trade-restricting effect of U.S. AD/CVD investigations. Improvements would have to be made, including introduction of an automatic and effective right of appeal whose absence arguably undercuts the credibility of the process by awarding enormous power to panels.

Adoption of a system such as NAFTA's chapter 19 on a 34-nation basis not only may ameliorate long-intractable conflicts over trade remedy laws, but implementation of such a system also will have substantial positive effects for civil society in general. Dispute settlement systems promote timeliness, inclusive record keeping, and impartiality in the administrative decisional process. They improve governmental accountability on several levels. By improving participation of all levels of society in their governance, international trade dispute settlement systems strongly promote the rule of law.

NAFTA, trade remedies, anti-dumping, countervailing duties, dispute settlement, dispute resolution, FTAA

Abstract:
States have been careful to couch their human rights commitments in terms that avoid binding and measurable actions to ensure the human rights either of their own citizens or those in other countries. Despite the promise of a dozen U.N. treaties, states continue to equivocate as to measures necessary to meet critical individual needs. This essay argues that, nonetheless, the question whether economically powerful states may be held to human rights observance is not solely moral in nature. Instead, through a combination of treaties, custom, and historical facts, the human rights obligation of developed states has taken on penumbral legal or rule-based characteristics. The clear historical record of 60 years of operation of the modern system of financial and economic instruments created by the major trading nations after World War II proves the severely adverse effects of the system on much of the world's population. Far too many people suffer from poverty, lack of clean air to breathe or clean water to drink, unmet needs for essential medicines to treat modern plagues such as HIV-AIDS, overt racial and sexual discrimination at work, dying indigenous cultures that had survived thousands of years before the Bretton Woods System, and continued marginalization from political and economic attention.

Combined with the principles of global harm and pacta sunt servanda, this undeniable, inevitable, predictable, and preventable record of globalization's "creative destruction" gives rise to an enforceable legal obligation on the part of economically healthy states to make reparations for the human rights violations caused by their actions and by those of the transnational corporations subject to their jurisdiction. In extreme cases, regional human rights courts and national courts have enforced this obligation, using both tort and constitutional rights deprivation theories to find jurisdiction.

Trade, Human Rights, Global Harm Principle, Bretton Woods System, Poverty, objective territorial principles, pacta sunt servanda, transnational corporations, reparations

Abstract:
With the signing of the US-Peru Trade Promotion Agreement on April 12, 2006, Peru and the United States opened the door to the new economic model of Latin America. The United States seeks increased economic development in Peru that will bring greater prosperity to both nations as players in the pan-American regional economic unit. For Peru, the Agreement secures preferential access to the U.S. market for Peru's goods and services and promises a predictable, business-friendly environment in Peru that will attract increased U.S. investment to stabilize the Peruvian economy and create well-paying jobs.

This agreement was born into an unusually dynamic array of economic and political turmoil in Latin America. We describe in this article the shift toward economic development with a resurging reliance on export-led growth and a renewed vision toward regional integration, spurred on by a pink tide of populist new leaders. We then analyze whether the Peru-U.S. trade agreement, finally implemented by the United States in January 2009, is likely to deliver on its objectives of economic stability, independence, and prosperity, despite the great uncertainty of current events. Peru and her Latin American neighbors are developing a new economic model for the achievement of their long-term regional goals: greater control over trade relationships, more resilience to adverse conditions, and a better standard of living for all members of civil society. Does the U.S.-Peru agreement fit the new Latin American trade model or will its results mirror earlier U.S. trade pacts with developing Latin American countries, namely, enrichment of government and transnational corporation coffers at the expense of even greater inequality between rich and poor?

(Cuando el Ministro peruano de Comercio Exterior y Turismo y el Representante Comercial de los Estados Unidos firmaron el Acuerdo de Promocion Comercial entre estos dos paises en abril 12 del 2006, abrieron las puertas a un movimiento comercial hemisforico en busca de un nuevo modelo economico en America Latina. Con este acuerdo, los Estados Unidos pretende aumentar el desarrollo economico en el Peru, que aportara una mayor prosperidad para ambas naciones como parte de la economica regional. Para el Peru, el acuerdo garantiza el acceso preferencial al mercado de los EE.UU. para los bienes y servicios y promete atraer una mayor inversion extranjera para estabilizar la economia peruana.

Este acuerdo nacio en una epoca de agitacion politica y economica en la America Latina. En este articulo hablamos del cambio hacia el desarrollo economico y la nueva esperanza para el crecimiento impulsado por las exportaciones, y una nueva vision hacia la integracion regional, impulsada por una "marea rosa" de nuevos lideres populistas. A continuacion, analizamos si el acuerdo comercial, ejecutado por los Estados Unidos en enero de 2009, sera capaz de cumplir con sus objetivos de estabilidad economica, independencia y prosperidad, a pesar de la gran incertidumbre de los acontecimientos actuales. Peru y sus vecinos de America Latina estan desarrollando un nuevo modelo economico para lograr sus metas regionales a largo plazo, por ejemplo han establecido mayor control sobre sus relaciones comerciales, mas resistencia a condiciones adversas, y un mejor nivel de vida para todos los miembros de la sociedad civil. Pertenece el acuerdo EE.UU.-Peru al nuevo modelo de comercio de America Latina, o seran sus resultados iguales a los de otros pactos comerciales entre los EE.UU. y otros paises de America Latina, o sea, el enriquecimiento de los gobiernos y las empresas transnacionales a expensas de una mayor desigualdad entre ricos y pobres en la region?)

Peru, regional trade agreements, WTO, pink tide, MERCOSUR, international trade law