• The George Floyd Case and Section 1983: A Police Officer’s Constitutional Duty to Intervene

    by  • June 26, 2020 • 0 Comments

    Sheldon Nahmod (headshot)By Sheldon Nahmod [originally posted on the Nahmod Law blog on June 25, 2020]

    The Intervention Question

    Suppose a police officer continues to use life-endangering force even after it is obvious that a misdemeanor arrestee (who has no weapon) is under control and not a danger to others, including police officers. As a result of this use of excessive force, the arrestee dies. This is a violation of clearly settled Fourth Amendment law in every circuit and exposes that officer to potential section 1983 damages liability. If these turn out to be the facts in the George Floyd case, as appears likely at the time of this writing, the result would be the same.

    Suppose further that other police officers are present, witness this behavior, have a realistic opportunity to stop the first officer’s unconstitutional use of force but do not act to prevent it. Are they also potentially liable for section 1983 damages for the death of the arrestee because they failed to intervene when they could have, and thus failed to prevent what happened?

    The Short Answer (more…)

    The WTO Force Is Everywhere!

    by  • June 19, 2020 • 0 Comments

    Cho_Sungjoon thumbBy Sungjoon Cho [originally posted on the International Economic Law and Policy Blog on June 18, 2020]

    This is what Alan Beattie seems to argue (“WTO Still Has Ability to Affect Rulings and Regulation Elsewhere”). He stated that:

    “WTO laws and rulings are regularly cited in investment tribunals, bilateral trade disputes and even the European Court of Justice. Despite its reservations about WTO dispute settlement, for example, the US referred to WTO rulings in its groundbreaking action against Guatemala for labour rights violations under the Central America Free Trade Agreement.”

    True, the WTO case law may not be “binding” to parties other than immediate disputants in a given case. However, such legal technicality does not exhaust the description of the normative gravitational force field from the WTO law. For another example, in formulating a recent AD/CVD measure against China over certain fibre glass fabrics from a “Chinese subsidiary located in Egypt,” the European Commission relied heavily on the WTO trade remedy law. This incorporation, by reference, of the WTO norms into the domestic law seems to have settled in a pattern beyond a mere dimension of isolated anecdotes. In this regard, Joost was nicely quoted in Beattie’s article. (“If WTO dispute settlement becomes more difficult to use, you could see more of what the EU is doing at the moment against what it perceives as Chinese subsidies in Egypt — using WTO subsidies rules in EU anti-subsidy investigations, leading to EU tariffs, rather than filing a WTO complaint.”)

    Finally, who could have ever imagined that a senior U.S. politician would praise the WTO law? In a recent Bloomberg op-ed, Senator Chuck Glassley stated that “the WTO’s expansion of global trade has actually enabled the U.S. to respond to the pandemic” as “global value chains, facilitated by WTO rules” empowered the U.S. automakers to globally source components necessary to manufacture ventilators.

    After all, the WTO law may be “stickier” than many would believe.

    Another Economic Defense for the Multilateral Trading System

    by  • January 8, 2020 • 0 Comments

    Cho_Sungjoon thumbBy Sungjoon Cho [originally posted on the International Economic Law and Policy Blog on January 7, 2020]

    Stephen Roach (Yale) has recently published a must-read (“US, China and the Myth of Global Decoupling”), which refutes the logic of trade wars.  Here are main observations.

    Today’s global economy is far more integrated than ever before. (…) The tighter that trade is woven into the fabric of global commerce, the tougher it will be to disentangle those linkages (…). —and the lower the odds of a more pervasive and disruptive decoupling. (…)

    This diffusion of bilateral trade through multi-country supply chains would dampen the effects of a bilateral decoupling of any two economies, no matter how large.

    Without addressing the US saving shortfall, raising tariffs and other barriers on China will simply divert trade away from Chinese sourcing toward America’s other trading partners. Bilateral decoupling does not mean global decoupling; it means trade diversion.

    The trade diversion arising from bilateral decoupling would mean that US sourcing would migrate from low-cost Chinese production platforms to a broad constellation of foreign producers. (…) The bottom line is a likely shift to higher-cost production platforms. Ironically, that would be the functional equivalent of a tax hike on US companies, workers, and households.

    These observations offer yet another powerful defense for “an integrated, more viable and durable multilateral trading system,” as stipulated in the WTO Charter.  As the WTO panel report on Section 301 highlighted, any unilateralist policy, such as a trade war, has “indirect effect (…) on individuals and the market-place, the protection of which is one of the principal objects and purposes of the WTO.” (para. 7.86).

    Is the European Union Outsourcing Public International Law to Save the WTO Dispute Settlement System?

    by  • December 13, 2019 • 0 Comments

    Cho_Sungjoon thumbBy Sungjoon Cho [originally posted on the International Economic Law and Policy Blog on December 12, 2019]

    Upon the Appellate Body having being paralyzed, the European Commission has promptly moved to secure its trade interests by arming itself with the retaliatory power, also creating the position of “Chief Trade Enforcement Officer.”  The Commission’s proposal is reminiscent of Nicolas Lamp’s earlier post on the threat of unilateral retaliation to keep the WTO dispute settlement system alive.

    As far as the WTO is concerned, the proposal allows the Commission to impose penalty tariffs on a WTO member that lost at a panel stage but refuses to comply with the appellate arbitration mechanism under DSU Article 25 and instead appeal “into the void” to prevent the panel report from being adopted.  Interestingly, the Commission justifies (pdf) such unilateral retaliation as a “countermeasure” under the “Draft Articles on Responsibility of States for Internationally Wrongful Acts.”  This is what the Commission argues in this regard:

    [W]here the responsible party fails to cooperate in good faith in the dispute settlement procedures, thereby preventing the injured party from completing such procedures, the possibility to resort to countermeasures in accordance with the requirements of general public international law necessarily revives. The International Law Commission notes that the revival of that possibility arises when one Party “fails to implement the dispute settlement procedures in good faith” or “where a State party fails to cooperate in the establishment of the relevant tribunal”.

    Would this kind of “threat” from a big trading bloc induce other WTO members into buying the proposed appellate arbitration mechanism?  What about the United States?  Obviously, a retaliatory measure may invite another one, and that’s what a trade war is all about.

    Two Faces of (De-) Globalization

    by  • October 23, 2019 • 0 Comments

    Cho_Sungjoon thumbBy Sungjoon Cho [originally posted on the International Economic Law and Policy Blog on October 23, 2019]

    Two very different observations on (de-) globalization have caught our eyes lately.

    First of all, according to the most recent statistics provided by the Global Trade Alert (composed by Prof. Simon Evenett at St. Gallen), pro-trade and investment measures across borders have shown the biggest decline ever for the past seven years, while a sharp increase of protectionist measures have continued. (more…)

    A $7.5 Billion Ammunition from the WTO?

    by  • October 2, 2019 • 0 Comments

    Cho_Sungjoon thumbBy Sungjoon Cho [originally posted on the International Economic Law and Policy Blog on October 2, 2019]

    At long last, the Article 22.6 Report (PDF) of the Arbitrator on the Boeing-Airbus dispute is out.  Note that this dispute concerns an original dispute in which the United States (on behalf of Boeing) sued the European Union for the latter’s subsidies on Airbus. Another report in a parallel case in which the EU (on behalf of Airbus) sued the United States for the latter’s subsidies on Boeing will be released in the near future.

    This report reads like an accounting paper full of numbers and formulas. Obviously, the Arbitrator took great pains in computing the reasonable volume of Boeing’s lost sales (counterfactual deliveries).  Note that Boeing and Airbus constitute a near duopoly in the global market when it comes to a large civilian aircraft, which is the subject of this dispute. (more…)

    Collateral Damages of the Trade War

    by  • August 12, 2019 • 0 Comments

    Cho_Sungjoon thumbBy Sungjoon Cho [originally posted on the International Economic Law and Policy Blog on August 12, 2019]

    Two researchers from the Kiel Center for Globalization (Haiou Mao and Holger Görg) have just published a working paper (PDF) entitled “Friends like This: The Impact of the US – China Trade War on Global Value Chains.”  Based on the notion of “cumulative and indirect tariffs” in global value chains (GVCs), the paper demonstrates that higher tariffs on Chinese intermediate products (parts and components) imposed by the United States incur an additional tariff cost to third countries (such as the EU, Canada and Mexico) when they are assembled into final products and re-exported to those third countries.  Any initial tariffs imposed by the United States will continue to hurt multiple trading partners further downstream in GVCs.

    This study highlights collateral damages of the U.S. – China trade war.  One might speculate that it calls for a strong “normative” response from the world trade community.  Could, or should, third parties challenge those tariffs imposed by the United States, and retaliatory tariffs imposed by China, before the WTO?

    Business Reactions to Trade Wars

    by  • April 15, 2019 • 0 Comments

    Cho_Sungjoon thumbBy Sungjoon Cho [originally posted on the International Economic Law and Policy Blog on April 14, 2019]

    There is a Chinese saying that “when there is a policy from the above, there is a reaction from the below” (“上有政策, 下有对策”).  This is exactly what has happened since the inception of trade wars.  Both domestic and international businesses have attempted to avoid the punitive tariffs through various means, such as the exclusion application, transshipment and tariff engineering.  As you can imagine, some have been successful; others not.

    The Financial Times has recently offered an excellent simulation game (“Dodging Trump’s Tariffs”) in which readers can educate themselves about intriguing consequences of trade wars.  The simulation game is based on real examples.  Highly recommendable!

    A WTO’s “Kompetenz-Kompetenz” Moment

    by  • April 9, 2019 • 0 Comments

    Cho_Sungjoon thumbBy Sungjoon Cho [originally posted on the International Economic Law and Policy Blog on April 5, 2019]

    This is a supplemental post to Simon’s earlier one that provides an excellent summary of the Russia – Traffic in Transit panel report. Here are some aspects of the panel report that I found interesting and worth further reflection.

    First, one might say that this landmark decision is characteristic of a “constitutional” moment to the WTO. I understand that the use of “c” word here might be frowned upon in some circles, both legal and political. However, GATT Article XXI is not just a mundane, technical interpretive issue to the WTO. It is a matter of allocating power between the WTO as an autonomous institution and its member. If I exaggerate a little bit, this particular dispute echoes potential existential angst from the WTO. What if the panel had accepted Russia’s original claim and declared Article XXI as a “self-judging” provision? Constitutional consequences would have been dire. The WTO would have opened the jurisdictional Pandora’s Box, invited massive abuses and therefore undermined its own rationale (and identity). (more…)

    May the (Trade) Force Be With You

    by  • March 18, 2019 • 0 Comments

    Trip Planning photo with Admiral Ackbar and Yoda minifigs by Maëlick Reiterlied

    Not many people know it was actually a “trade” dispute that precipitated the Star Wars “a long time ago in a galaxy far, far away.” Professor Sungjoon Cho shares the history of trade wars, laws that aim to prevent trade wars, and how they might have obviated the need for Jedi knights.

    Read more →

    Are Trade Wars Missing the Point? (Part II)

    by  • February 12, 2019 • 0 Comments

    Cho_Sungjoon thumbBy Sungjoon Cho [originally posted on the International Economic Law and Policy Blog on February 12, 2019]

    In the previous post, I introduced main finding of the recent McKinsey report (“Globalization in Transition: The Future of Trade and Value Chains.”)  The report highlighted the growing importance of services and the relative decline of goods production in global value chains (GVCs).  Likewise, GVCs have become more technology and knowledge-intensive.  In addition, “regional” value chains have become prominent as emerging economies mature and are now capable of insourcing more of intermediate products, which they used to import from advanced economies.  Then, what would be possible implications of those new phenomena to the WTO? (more…)

    Are Trade Wars Missing the Point? (Part I)

    by  • February 6, 2019 • 0 Comments

    Cho_Sungjoon thumbBy Sungjoon Cho [originally posted on the International Economic Law and Policy Blog on February 5, 2019]

    The answer might be in the affirmative according to the recent report by McKinsey Global Institute, titled “Globalization in Transition: The Future of Trade and Value Chains.”  Here is a summary of its main findings.

    1. “Goods-producing value chains have grown less trade-intensive.”
    2. “Services play a growing and undervalued role in global value chains.”
    3. “Trade based on labor-cost arbitrage is declining in some value chains.”
    4. “Global value chains are growing more knowledge-intensive.”
    5. “Value chains are becoming more regional and less global.”

    On its face, this report might seem to play the same gloomy tune as “slowbalization.”  However, the McKinsey report does not equate this new phenomenon with the decline of globalization.  On the contrary, it attributes the phenomenon as the economic maturation of emerging economies, such as China, India, Thailand, Malaysia and Indonesia, which are “now consuming more of what they produce.”  By 2030, developing countries’ consumption will exceed a half of global consumption. (more…)