The Journal of

WORLD INVESTMENT

ABSTRACTS 

Joel Davidow and Joseph Whitlock: General Dispute Resolution Provisions of the Japan–Singapore Economic Partnership Agreement and the North American Free Trade Agreement

This article compares the Government–Government dispute resolution provisions of the Nafta and the Jsepa, Japan's first Free Trade Agreement (Fta), signed earlier this year. After reviewing the scholarship on the trade effects of Ftas, and their relationship to the multilateral trading system, it investigates the evolution of Japan's stance towards such agreements, including the forces behind and the likely effects of the Jsepa. Drawing on theories of dispute resolution as well as Nafta jurisprudence, the article then provides a comparative analysis of the general dispute resolutions found in Jsepa Chapter 20 and Nafta Chapter 20, noting that both systems are structured to respect party autonomy by including opportunities for negotiation, mediation and, finally, binding arbitration.

Joel Davidow is a Member in the International Department at Miller & Chevalier, chartered, Washington, D.C.; and an Adjunct Professor at Georgetown University Law Center, Washington, D.C.

Joseph Whitlock is an Associate Attorney in the International Department at Miller & Chevalier, chartered, Washington, D.C.

Debra P. Steger: The Rule of Law or the Rule of Lawyers?

The Wto dispute settlement system has been marked by a “juridification” from the predecessor Gatt system, which was based on diplomacy, to a system based on the rule of law. This article looks critically at two important issues that have arisen as part of this process—the legitimacy of the system itself and the question of who can represent a Member in dispute settlement proceedings. It reviews different theories of legitimacy and applies these to the Wto dispute settlement system, stressing that, in this regard as in others, it is more appropriate to compare Wto institutions with those of other international legal systems than with national governments. As regards the second issue, Steger examines the role—both theoretical and actual—of private counsel in Wto dispute settlement proceedings, pointing out that with the rule of law (juridification) come lawyers and that private counsel, acting within the best traditions of their profession and in a manner consistent with the purposes and objectives of the Dispute Settlement Understanding, can contribute positively to the legitimacy and credibility of the system as a whole.

Debra P. Steger is the former Director of the Wto Appellate Body Secretariat, Geneva, Switzerland; and currently is with Thomas & Partners, Ottawa, Canada.

Sumio Kozawa: Depoliticization of International Dispute Settlement—A Comparison of the Dispute Settlement Provisions of the Wto and the Energy Charter Treaty

The Energy Charter Treaty (Ect) is a unique binding instrument, limited in scope to the energy sector, which establishes multilateral legal rights and obligations with respect to a broad range of economic activities including investment and trade. The Ect contains dispute settlement mechanisms for investment, trade and transit. For investment, there are two dispute settlement mechanisms—State–State and investor–State—which are a continuation of those offered by bilateral investment protection treaties. This article compares the dispute settlement mechanisms of the Ect and the Wto and their case-laws and tries to suggest a preferable dispute settlement mechanism for a possible multilateral framework on investment.

Sumio Kozawa is a Director at the Japan National Oil Corporation. Previously, he was a member of the Japanese delegation in the Uruguay Round of multinational trade negotiations (1991-1993); First Secretary at the Japanese Mission to the European Union (1996-1999); and Senior Expert of the Energy Charter Secretariat, Brussels, Belgium, among other posts.

Claudia Wendrich: Ten Years After: The World Bank Guidelines on Foreign Direct Investment—In Need of Revision?

This article examines the non-binding World Bank Guidelines on the Treatment of Foreign Direct Investment in the light of issues of concern that have arisen in the decade since the Guidelines were promulgated. It addresses the admission and treatment of foreign investors, attempts to better define “expropriation” and briefly analyses the Guidelines’ recommendations on investor–State dispute resolution. Each Section identifies a key problem that often arises in an investment transaction and outlines the Guidelines’ approach to the issue, demonstrates its strengths and weaknesses, reveals inconsistencies and suggests how revised Guidelines should address the problem. It concludes that revised Guidelines may not only prove valuable to investors and host States, but could serve as a first step towards new negotiations on a universal convention on foreign investment.

Claudia Wendrich is an attorney in the Legal Department of Ibm, Central and Eastern European Division, Vienna, Austria.

Qingjiang Kong: Towards Wto Compliance—China's Foreign Investment Regime in Transition

This article evaluates the compatibility of China’s foreign investment regime with the investment rules contained in the World Trade Organization’s Covered Agreements. Although the framework of the foreign investment regime remains basically unchanged, China has acted in line with its Wto commitments. This article shows how China has lifted restrictions on the entry and operation of foreign investment by adjusting its industrial policies and by removing such requirements as local content and forced technology transfer in the relevant laws and regulations. Although the Wto Agreements are not directly applicable in China, the evolving investment regime will provide the roadmap by which to implement Wto commitments, especially as the continued existence of industrial policies suggests that there is room for further liberalization in this regard.

Qingjiang Kong is a Visiting Research Fellow at the East Asian Institute, National University of Singapore; and Associate Professor of International Economic Law at Hangzhou Institute of Commerce, People's Republic of China.

Alfonso Scirocco: The EC Trade Barriers Regulation and Intellectual Property Rights of EC Undertakings in Third Countries—The Unbearable Lightness of Article 133 EC

The European Community’s Trade Barriers Regulation (Tbr) is a powerful instrument of commercial “offence” aimed at dealing effectively with unfair trade practices in the markets of third countries. The European Commission has shown a willingness to apply the Tbr to protect intellectual property rights (Iprs), despite the absence of any express provision concerning such rights in the Regulation and its legal basis—Article 133 of the EC Treaty. This article provides a general survey of how the Tbr has been used to attempt to protect the Iprs of European undertakings and how such practice may conflict with the division of powers and the institutional balance within the European Community. At the same time, this use of the Tbr as it now stands can hardly be defined as effective or satisfactory for holders of Iprs in light of all of the new possibilities afforded by the Trips Agreement and various bilateral agreements. The article ends by examining different solutions that could improve the effectiveness of the Regulation in protecting Iprs.

Alfonso Scirocco is a Researcher in Competition Law at the Europa Kolleg, Institut für Integrationsforschung, Hamburg, Germany.

Xin Zhang: Domestic Effect of the Wto Agreement in China—Trends and Implications

This article examines the issue of domestic effect of the Wto Agreements in China. It begins by defining “domestic effect” as consisting of three elements—direct applicability, direct invocability and hierarchical rank in the domestic legal order. It also outlines the practice in these areas of some major Wto Members that could affect China’s position. The major academic arguments for and against domestic effect of the Agreement in China are examined, as well as their application in practice. The latest development in this regard—a judicial interpretation, “Measures on Several Issues Relating to the Adjudication of International Trade Administrative Litigations”, issued by China’s Supreme Court on 27 August 2002, rejecting direct invocability—is examined in detail. The article concludes by briefly examining the implications of China’s position, which could affect the multilateral trading system as a whole as well as the practice of new Members such as Russia, some East European nations and Viet Nam.

Xin Zhang is a member of the Chinese Bar Association and the Chinese Institute of Certified Public Accountants; and is currently a Ph.D. researcher at the Department of Law, Soas, University of London.