Tag Archives: disputes

Eminent call-girls

Aaargh! Yet another knee-jerk call in the Finan­cial Times for “wise” men (and women) to guide WTO out of it’s slough. Third, in lieu of the WTO min­is­te­r­ial, a group of emi­nent peo­ple should be appointed with the task find­ing a way out of the cur­rent dol­drums and out­lin­ing future courses of action. The head […]

NZ Apples, at last! But…

THE World Trade Organ­i­sa­tion has over­turned Australia’s 90-year-long ban on import­ing New Zealand apples, accord­ing to NZ media reports, which are brand­ing the deci­sion ‘a win against Aus­tralia” Extract from Australia’s ban on New Zealand apples over­turned by World Trade Organ­i­sa­tion — report | The Daily Telegraph

The Apples Case should never have arisen because we should have wel­comed NZ apples into our mar­ket decades ago. It should have been set­tled imme­di­ately by the Aus­tralian gov­ern­ment at the con­sul­ta­tions phase of the WTO dis­pute. The pre­miss (‘fire­b­light’ risk) was implau­si­ble and the sub­ject of an ear­lier, defin­i­tive U.S. vic­tory in WTO against sim­i­lar pro­tec­tion in the Japan-Apples Case.

So, prob­a­bly, two-cheers for good-sense, the NZ apple indus­try and Aus­tralian consumers.

Whether this is a robust or a pyrrhic vic­tory is still to be seen.The deci­sion (not yet published—so cau­tion is war­ranted) is appeal­able by Australia—which could delay the entry of NZ apples onto our mar­ket. Also, there is noth­ing pre­vent­ing the Aus­tralian gov­ern­ment even­tu­ally adopt­ing import orders just as oner­ous as the 2007 proposal.

Worse, by the time NZ apples finally hit the Aus­tralian shores (nine decades after they first sought entry) they may find that the Chi­nese have beaten them into the mar­ket. It’s enough to make a Kiwi weep!

I’ve argued for years that our Quar­an­tine sys­tem was costly, overblown and unnec­es­sar­ily pro­tec­tion­ist. In the past, our quar­an­tine bar­ri­ers have hurt our rural econ­omy by forc­ing us to sus­tain high-cost import-replacement indus­tries (like the banana indus­try) at the expense of con­sumers and of more effi­cient export indus­tries. The lat­ter find their input costs raised by the pro­tec­tion and their export mar­ket­ing efforts under­mined by our trad­ing part­ners’ scorn of Aus­tralian agri­cul­tural ‘protectionism’.

Slowly, fol­low­ing WTO pres­sure (our loss of the egre­gious Salmon case, in par­tic­u­lar); pres­sure from our trad­ing part­ners (e.g. in the Quar­an­tine work­ing groups set up under the Australia-USA Free Trade Agree­ment); crit­i­cism from the Fed­eral Court when it reviewed indi­vid­ual cases, and; as a result of inde­pen­dent reviews, the reg­u­la­tions and imple­men­ta­tion of our laws have both improved.

But the care­fully (even tor­tur­ously)-pre­pared deci­sions of BioSe­cu­rity Aus­tralia are prey to crass polit­i­cal manipulation—which is what hap­pened to the 2007 deci­sion from BioSe­cu­rity Aus­tralia (reca­pit­u­lat­ing a deci­sion first taken in 2000) to approve imports of NZ apples sub­ject to oner­ous con­di­tions. The Aus­tralian Min­is­ter at the time, Peter McGuaran, failed to sign-off on the deci­sion (after strong lob­by­ing from the pro­tected Aus­tralian indus­try and against the advice of his own Depart­ment and over  the objec­tions of the National Farm­ers’ Fed­er­a­tion) for sim­ply pro­tec­tion­ist reasons.

The limits of WTO litigation

Good sense from a for­mer Chair of the WTO Appel­late Body.

It is in the best inter­est of both coun­tries to con­tinue nego­ti­at­ing on the cur­rency issue rather than resort­ing to lit­i­ga­tion at the WTO. On this issue espe­cially, lit­i­ga­tion should be the last resort.” Extract from James Bac­chus in the WSJ


Alhougth I’m sure a lot of trade law geeks like me would like to see Arti­cle XV lit­i­gated, nev­er­the­less … just to see what it means.

Apple’s patent protectionism

In an action before the U.S. Fed­eral courts and the Inter­na­tional Trade Com­mis­sion, Apple Inc. is attack­ing a Tai­wanese man­u­fac­turer of Google’s Android Phone for alleged abuseof 20 soft­ware patents. It seems the suits are aimed at slow­ing the growth of com­pe­ti­tion for the iPhone and, pos­si­bly, aimed at Google’s pro­posed web oper­at­ing system.

The pros­e­cu­tion of soft­ware patents, espe­cially those for ‘user inter­face inno­va­tions’, is a dubi­ous action at best that is some­times (often? usu­ally?) an abuse of market-competition prin­ci­ples. Worse, in this case, Apple has cho­sen to pur­sue it’s com­peti­tors under the noto­ri­ous, pro­tec­tion­ist, S.337 of the US Trade Act of 1930 which does not pro­vide dam­ages for infringe­ment of patent rights but pro­hibits imports of goods likely to infringe a U.S. patent.

Sec­tion 337 of the US Trade Act (1930) was the sub­ject of a well-known GATT com­plaint brought by the Euro­pean Com­mu­ni­ties against the USA in 1998. The Panel Report, adopted by the GATT Con­tract­ing Par­ties, concluded:

…that Sec­tion 337 of the United States Tar­iff Act of 1930 is incon­sis­tent with Arti­cle III:4 [of GATT], in that it accords to imported prod­ucts chal­lenged as infring­ing United States patents treat­ment less favourable than the treat­ment accorded to prod­ucts of United States ori­gin sim­i­larly chal­lenged, and that these incon­sis­ten­cies can­not be jus­ti­fied in all respects under Arti­cle XX(d).

The GATT Panel rec­om­mended that Mem­ber gov­ern­ments ask the USA to amend it’s leg­is­la­tion to bring it back into con­for­mity with the GATT. But this was the mid­dle of the Uruguay Round of nego­ti­a­tions, focussing on the TRIPS nego­ti­a­tions on intel­lec­tual prop­erty. The USA took no action as rec­om­mended by the Panel. Finally, in 2000 the EC again requested con­sul­ta­tions with the USA over S.337, now cit­ing its con­cerns about incom­pat­i­bil­ity with the TRIPS Agreement…but, again, there has been no action by the USA.

The Apple com­men­tariat, is unhappy about the idea of pro­tect­ing soft­ware patents to con­sol­i­date what is, already, a dom­i­nant pos­tion for Apple in the phone mar­ket. Here are two pretty big guns from that world, blast­ing Apple with both barrels.

” What­ever ben­e­fit in the mar­ket Apple hopes to achieve by this suit to me seems likely to be worth far less than the loss of good will and pres­tige Apple will suf­fer if they vig­or­ously pur­sue this case (let alone if they ini­ti­ate more such suits).” Extract from John Gru­ber: This Apple-HTC Patent Thing
But when you sue some­one for doing some­thing you do your­self, you become one of the bad guys. Can you name a com­pany you admire that spends its time enforc­ing patents, instead of inno­vat­ing? Remem­ber the pirate flag you flew over Apple’s head­quar­ters when you were build­ing the Mac? Is Apple part of the Navy now?” Extract from Will Ship­ley: An Open Let­ter to Steve Jobs Con­cern­ing the HTC Lawsuits.

Dolphin-Tuna: here we go again…

The Mex­i­can gov­ern­ment has called for a reprise of one of the most con­tro­ver­sial ‘envi­ron­men­tal’ dis­putes ever bought to the GATT: the US—Dolphin-Tuna case. The case, then and now, con­cerns an attempt by the United States to use an import bar­rier to extend it’s own ‘dolphin-friendly’ fish­ing reg­u­la­tions in an extra-territorial way to Mex­i­can fish­er­men… or maybe just to block the entry of Mexican-caught tuna.

Mex­ico asserts that the US restric­tions on tuna imports vio­late sev­eral WTO rules, includ­ing national treat­ment and most-favoured nation oblig­a­tions. The coun­try also claims that the mea­sures have forced more than a third of its tuna fleet to shut down. ” Extract from ICTSD

The first case is a GATT ‘orphan’ dis­pute. The Panel found against the United States on the issue of national treat­ment but also found that the US defense under the Arti­cle XX Gen­eral Excep­tions clause failed for sev­eral rea­sons. The report of the Panel was cir­cu­lated in mid-June, 1994, just as the cur­tain came down on fifty years of the GATT: the WTO treaties had already been signed and entered into force six months later. So the Panel recommendations—which broke impor­tant new ground with an inter­pre­ta­tion of the ‘cha­peau’ to Arti­cle XX of GATT— were never adopted by the GATT Coun­cil (the required pro­ce­dure under the GATT dis­putes sys­tem) and remain in a sort of limbo until now.

You can find out more about the GATT ‘orphans’ in my book (pub­lished by Kluwer for WTO) A Guide to Dis­pute Settlement

As it hap­pens, I’m a Panel Mem­ber tonight in a WTO Law Moot court at the Mel­bourne Uni­ver­sity Law School, where we’ll adju­di­cate the argu­ments of top law grad­u­ates on a very sim­i­lar case that is part of the world-wide ELSA Moot com­pe­ti­tion. The link gives you access to this case, which also con­cerns a pre­tended extra-territorial use of (sev­eral) envi­ron­men­tal reg­u­la­tions. If you have any advice for me on this fiendish case, I’d be very happy to have it.