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.