DLC think tank confirms key facts on Deathstar/trade policy
Another great Fast Track video

What's this stuff doing in our "trade" agreements?

Two rather outrageous "trade" disputes were recently ruled on, one brought through NAFTA and one through the WTO.  These are worth looking at briefly because the provisions under which these cases were brought are bound to make you scratch your head and think, "what the heck are these things even doing in trade agreements anyway?"

First, a NAFTA tribunal ruled against an aggressive move by UPS, which sued the Canadian government over Canada Post, the country's government-owned postal service, in 2000 using NAFTA's "Chapter 11" investor rights provisions.  UPS claimed that Canada Post enjoyed an unfair competitive advantage because, as succinctly put by a Canadian Press reporter, "[Canada Post's] services such as Express Post and Priority Courier draw on an infrastructure of sorting facilities, mailboxes and post offices that private firms must provide for themselves."  UPS was contending that the very existence of Canada Post as a publicly owned corporation, funded by government money and using a government-established infrastructure, cost UPS $160 million in lost revenues.

Why it took seven years for a NAFTA tribunal to figure out that this case was utterly bunk and that Canadian taxpayers should not be forced to shell out $160 million to a U.S. company claiming investor rights that would not have existed in either U.S. or the Canadian law is a mystery to us.

In the second case, the defendant was less fortunate.  A WTO tribunal ruled that a Brazilian attempt to restrict imports of used tires from Europe was WTO-illegal.  Per the AP report, the EU brought this case against Brazil after "Brazil had accused the 27-nation EU of trying to dump millions of used tires on its market, increasing the risk of tropical diseases and environmental havoc as Brazil would essentially be storing European waste, without the possibility of recycling the material."  Not surprisingly, the WTO panel, composed (in the absence of any conflict-of-interest rules) of trade lawyers and meeting behind closed doors, upheld the EU complaint.

Of the 133 WTO disputes that have been ruled on by these tribunals, 89 percent (PDF) — all but fifteen — have resulted in countries having to change their domestic laws, most of them having little or nothing to do with trade, to conform to WTO rules.

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Comments

Simon Lester

You can certainly make the case that a handful of disputes have only a limited connection to trade, but the statement that "most of them hav[e] little or nothing to do with trade" is not correct.

Simon Lester

Oh, and the WTO conflict of interest rules can be found here: http://www.worldtradelaw.net/misc/rulesconduct.pdf

And as I understand it, Brazil is pretty happy with the result on the tyres case, as they believe they can implement without much difficulty.

And the measures at issue in the tyres case dealt with "retreaded" not "used" tyres. See the panel report for an explanation of the difference.

Sarah Press

Globalization can be good for the environment if the government doesn't get in the way.

Protectionist policies are hurting consumers and the environment. The subsidies and tariffs placed on ethanol prevent Americans from buying cheap, efficient and green ethanol from Brazil. For more check out: http://www.cwt.org/blog/
Feel free to comment and debate.

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