The Journal of

WORLD INVESTMENT & TRADE

ABSTRACTS 

Srilal M. Perera: State Responsibility—Ascertaining the Liability of States in Foreign Investment Disputes

This article analyses the International Law Commission's Draft Articles on State Responsibility, especially as the relevant Articles impact on cross-border investments. It first identifies the various structures of the State, principally dividing the State into either a centralized form or a federal form, and within these two forms identifies the various sub-structures such as territorial sub-divisions of the State (also known as "sub-sovereigns"), State-owned enterprises, and private agents of the State. It then discusses the relevant draft Article for each sub-structure, the writings of experts on the subject, former and current case
law, and arrives at legal principles that are practical for consideration by practitioners. In addition, it suggests practical guidelines and principles adopted from current case law and local and domestic corporate law to help practitioners avoid and resolve the thorny question of when an act which is carried out by any one of the sub-structures results in a loss to a foreign investor could be, or would be, deemed an act of the State and, therefore, engage the responsibility of the State.

Srilal M. Perera holds a Ph.D. from Georgetown University, Washington, D.C.  He is Chief Counsel, Operations of the Multilateral Investment Guarantee Agency of the World Bank Group and also Adjunct Professor of Law at the Washington College of Law, American University, Washington, D.C.

J. Michael Finger and Andrei Zlate: Antidumping—Prospects for Discipline from the Doha Negotiations

Maintaining an economically sensible trade policy is often a matter of managing pressures for exceptions—for protection for a particular industry.  Good policy becomes a matter of managing interventions so as to strengthen the politics of openness and liberalization—of avoiding rather than of imposing such restrictions in the future. In the 1990s, antidumping measures emerged as the instrument of choice to accomplish this, despite the fact that they satisfy neither of these criteria.  Its economics is ordinary protection; it considers the impact on the domestic interests that will benefit while excluding the domestic interests that will bear the costs.  Its unfair trade rhetoric undercuts rather than supports a policy of openness.  As to what would be better, the key issue in a domestic policy decision should be the impact on the domestic economy. Antidumping reform depends less on the good will of Wto delegates toward the “public interest” than on those business interests that are currently treated by trade law as bastards insisting that they be given the same standing as the law now recognizes for protection seekers.

J. Michael Finger is emeritus Lead Economist of the World Bank.

Andrei Zlate is a Ph.D. Candidate at Boston College in Chestnut Hill, Massachusetts.

Daniel Clough: Regulatory Expropriations and Competition under Nafta

This article examines concerns over the wide scope of the regulatory expropriation provisions of Nafta and whether they extend to antitrust and essential facilities regulation.  On  examination of Nafta jurisprudence and various rationalizations of the issue proposed by the law and economics school concerning the nature and existence of the "regulatory contract", it
seems that antitrust laws, particularly the law with regard to essential facilities, have the potential to amount to a regulatory expropriation of a foreign investor's property, requiring compensation under Nafta.  However, constitutional economics analysis suggests that Nafta is most appropriately interpreted by supposing that no electorate would choose a policy set that would include ceding to a foreign investor any part of the social value of
the host country's regulatory framework without certain and tangible long-term benefits.

Daniel Clough holds LL.M. degrees from both Monash University, Australia and Columbia University, New York. He is a Senior Fellow at the Law School of the University of Melbourne and a Barrister at the Victorian Bar, Australia.

Elías Baracat and Julio Nogués: Wto Safeguards and Trade Liberalization—Lessons from the Argentine Footwear Case

The Argentine Footwear case provides an example of the complexities of Wto rules on the use of safeguards and of the interaction of multilateral and regional processes of liberalization. As a result of both Argentina’s unilateral liberalization and the removal of barriers within Mercosur, Argentine imports of footwear increased rapidly. As Mercosur provides no intra-regional safeguard mechanism, the Government of Argentina responded by applying import relief and Wto safeguards against third countries. The Wto Dispute Settlement Body addressed these measures and, as a consequence, Argentina was required to dismantle most of them.  This article examines the four main conclusions that can be drawn from this.

Elías Baracat is an independent consultant; Professor of “Bloques Económicos y Políticas de Agronegocios” at the Universidad del Cema in Buenos Aires, Argentina; and Former President of the Comisión Nacional de Comercio Exterior, Buenos Aires. 

Julio Nogués is Professor of “International Trade Institutions and Policies” at the Universidad Torcuato Di Tella in Buenos Aires, Argentina.

Ngangjoh H. Yenkong: The Role of Arbitration in Determining Reasonable Period of Time and Retrospective Remedies in Wto Dispute Resolution—Beyond the Australia–Automotive Leather Panel  

This article examines two concepts in Wto dispute resolution—that of reasonable period of time for implementing a particular recommendation and that of retrospective remedies. While it is clear that an arbitrator acting under Article 21.3(c) of the Dispute Settlement Understanding does not have a mandate beyond determining what may constitute a reasonable period of time for a Member to bring a particular Wto-inconsistent measure into conformity with its obligations, some puzzles surrounding the limit of the mandate require attention. Secondly, as regards retrospective remedies, it also appears some developments have occurred in this domain, both in other third-party adjudication bodies and in international law codification, but that the Wto dispute settlement system has not squared these developments with the public international law of trade. This explains why the reasoning of the Compliance Panel in the Australia–Automotive Leather case has sparked such a critical divergence of opinions.

Ngangjoh H Yenkong is a Research Fellow at the Faculty of Law of the University of Helsinki, Finland. At the time of the writing of this article, he was a Visiting Scholar at the Max Planck Institute for Comparative Public Law and International Law in Heidelberg, Germany.