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.