International Trade Agreements Before Domestic Courts: Lessons from the EU and Brazilian Experiences

219 Pages·2015·2 MB·English

by  Maria Angela Jardim de Santa Cruz Oliveira (auth.)

Maria Angela Jardim de Santa Cruz Oliveira
International
Trade Agreements
Before Domestic
Courts
Lessons from the EU and Brazilian
Experiences
International Trade Agreements Before
Domestic Courts
ThiSisaFMBlankPage
Maria Angela Jardim de Santa Cruz Oliveira
International Trade
Agreements Before
Domestic Courts
Lessons from the EU and Brazilian
Experiences
MariaAngelaJardimdeSantaCruzOliveira
Brasilia
Brazil
ISBN978-3-319-13901-2 ISBN978-3-319-13902-9 (eBook)
DOI10.1007/978-3-319-13902-9
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Foreword
What is, or should be, the role of domestic courts in the enforcement of interna-
tional law, more specifically, state-to-state trade commitments? This is the ambi-
tiousquestionmasterfullytackledinthisvolume.
The work is unique inthat it examinesthe interplay not from the conventional
perspectiveofEUorUScourts,butfromthevantagepointofdevelopingcountries,
in particular, Brazil. It does so not in the abstract but with reference to rich
jurisprudence before Brazilian courts, juxtaposing it, in particular, to the EU
experience. The research also reaches a controversial conclusion: Brazil, which
gives direct effect to trade agreement in its domestic courts, is not lauded as the
championoffreetrade.Instead,itisstronglyadvisedtostopgivingdirecteffectto
tradeagreementsbeforeitsdomesticcourts.
Thestartingpointofthebookisanintriguingpuzzle:WhyisitthattheUnited
States,theEU,Canada,JapanandevenChina,India,andSouthAfricahaverefused
to give direct effect to WTO and other trade agreements before their domestic
courts, whereas Latin American countries like Brazil, Mexico and Argentina do
continuetogivesuchdirecteffect?Whatexplainsthis“LatinAmericanexception-
alism”?Doesitmakesense?TheauthorprovidesaforcefulcaseforBraziltoend
this“exceptionalism.”
Statesarefreetodecidehowtheywillimplementtreatycommitments.Nothing
underinternationallawobligesthemtogivedirecteffecttotreatiesbeforedomestic
courts. Indeed, when looking at the largest trading countries, almost all of them
havedecidedtocreateawedgebetween(1)theirinternational,state-to-statetrade
obligationsbefore,forexample,theWorldTradeOrganization,and(2)whatbinds
them vis-(cid:1)a-vis private parties under domestic law or before domestic courts. As a
result, in neither the United States nor the EU can traders invoke WTO commit-
mentsofthestatebeforedomesticcourts.TherecentlyconcludedCanada–EUFree
TradeAgreement (CETA)goesasfarasstatingthat“[n]othinginthisAgreement
shall be construed ... as permitting this Agreement to be directly invoked in the
domesticlegalsystemsoftheParties”(Chapter33,Article14.6).AlsoChina,India
and South Africa have done the same. In Brazil, in contrast, a rich jurisprudence
v
vi Foreword
existswheredomesticcourtshaveapplied,interpretedandfoundviolationsoftrade
agreements binding Brazil at the request of (often non-protectionist-inspired)
privateparties.
TraditionalinternationallawyersmayapplaudBrazil’scommitmenttointerna-
tional law. On their view, enlisting domestic courts in the enforcement effort of
international law can compensate the flaws in the international enforcement of
international law and thereby contribute to the effectiveness of the discipline.
Dr. Oliveira tells a different story. In her view, and relying on rational choice
approaches,allowingnationalcourtstoenforcetradeagreementsattherequestof
privatepartiesiscounterproductive,evenfortheeffectivenessofinternationallaw.
Building on the Brazilian experience, she points at a number of “unintended
consequences”:(1)afloodofindividualcases,(2)diverseandinconsistentrulings
among domestic courts within Brazil, (3) domestic courts’ interpretation of WTO
rules different from the international and foreign interpretation oftrade rules, and
(4) disequilibrium in international trade’s concessions and rights. In the Brazilian
experience, she argues, the executive, not courts (especially not lower courts) are
more inclined to favor international law compliance. Direct effect shifts power
from the executive to courts and is, on this view, more likely to harm rather than
helptheeffectivenessofinternationallaw.
The book presents a nuanced theoryofhow countries should assess the role to
givetotheirdomesticcourtsinrelationtointernationallaw:notaone-size-fits-all
solution, but a calibrated one, based on the subject matter and type of treaty in
question. A variable solution also that may change over time, depending on the
needs of the country. New, relatively weak countries may find it attractive to tie
theirhandstointernationallawthroughdirecteffecttosignaltheirgoodcitizenship
in the world community, to attract foreign direct investment, or for internal pur-
poses,e.g.,forcentralgovernmentstokeepsub-federallevelsofgovernmentunder
controlortotieindomesticreforms.Incountrieswithapastofmilitaryrule,such
handtyingenforcedbydomesticcourts(nottherulersoftheday)makessense.It
may be further explained by a country’s colonial past, especially if it resides in
continental Europe, where a strong “monist” commitment to international law
prevailed at least until recently. However, in Dr. Oliveira’s opinion, “as the Latin
American economies grow, and their stance at the international trade system
increases, it seems fairly reasonable to expect a move from traditionalism [direct
effect]totherationalchoicetheory[nodirecteffect]...asithappenedinEuropean
courtsandUScourts.”
Itremainstobeseenwhetherthispredictionwillmaterialize.Inanyevent,this
book is an eye opening read, to be taken seriously by anyone interested in how
emergingeconomiesshouldstructuretheirdomesticengagementwithinternational
law,lookingnotonlyattheoriesbutatpracticalexperience,includingunintended
consequences.
Washington,DC,USA JoostPauwelyn
29October2014
Acknowledgments
Thisbookwouldhaveneverbeencompletedwithoutthegenerosityandwisdomof
numerouspeoplethatsupportedmethroughthisjourneythatIwanttoacknowledge
andgivemyheartilythanks.IamgreatlyindebtedtoJoostPauwelyn,whokindly
encouragedmewithinsightfulguidanceandforward-thinkingvision.Withouthim,
noneofthisworkwouldhavebeenpossibletoachieve.IamalsothankfultoAndrea
Bianchi, whose authoritative and challenging views stimulated me for academic
dialogue and impelled me to deepen my argument with his invaluable insights. I
would like to extend my gratitude to George Bandeira Galindo for his hard
questions,thought-provokingcommentsandconstructivefeedback.
AspecialnotemustbemadetoNunoGaroupa,forhisilluminativeperspective
onjudicialbehavior,profoundintelligenceandstraightforwardconversations.His
friendshipandsupporthasbeeninvaluabletothedevelopmentofthisbook.
IamgratefultotheHonorableJusticesCelsodeMello,EllenGracieNorthfleet
and Gilmar Mendes, for their kind support of my engaging in scholarly research.
MygratitudealsogoestoMarceloKohen,forsupportingmyacademicinterestin
international law, and Vera Thorstensen, for enlightening me about complex
economic aspects of international trade and guiding me through the works of the
WorldTradeOrganization.IamalsothankfultoDeisyVentura,forherinsightful
andthoughtfulcommentsattheinitialphaseofthiswork.
I would also like to express my appreciation for the help and guidance that
various people have given me in different capacities throughout this research. I
wouldliketothankCarlBaudenbacherforhisgenerousinvitationtothe2ndSaint-
Gallen International Dispute Resolution Conference, and Christine Peter da Silva
formyattendancetothe2ndWorldConferenceofConstitutionalCourtsinRiode
Janeiro.IamthankfultoFranciscoAcun˜a,LorenaSander,andArmandoReinafor
theirhelpfulinsightsoftheMexicanlegalsystem.MythankstoAdrianaDreyzinde
Klor, Alejandro Perotti, and Juliana Peixoto Batista for their kind availability to
sharetheirknowledgeaboutArgentineancourts.IalsorecognizethehelpofCelso
deTarsoPereira,FranzStirnimannFuentes,LuizEduardoSalles,GrazielaPicinin,
Mattias Bietti, A´ngel Horna, and Eva Keszeliova. Further, thanks to Brigitte
vii
viii Acknowledgments
Reschke, Julia Bieler and the Springer team for their valuable expertise and
efficiencyinthepublicationofthisbook.
Most importantly, I would like to express my infinite gratitude to my parents
who have always supported my intellectual endeavors. My deepest appreciation
goestomybelovedhusbandJose´ CarlosSantiagoforhisadorablecompanionship
duringthewritingofthisbook,andforhisendlesssupplyofpatienceandspirited
conversations.Idedicatethisbooktohim.
Contents
1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 OutlineofArgument. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2 TheRelationsBetweenInternationalLawandDomesticCourts. . . 13
2.1 ComparativeStudiesontheApplicationofInternationalLaw
byDomesticCourts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.2 TheRoleofDomesticCourtsRegardingInternationalLaw:
GeneralApproachesintheInternationalLegalScholarship. . . . . . 17
2.2.1 WaysDomesticCourtsUsuallyEnforce
InternationalLaw. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.2.2 TraditionalInternationalLegalScholarshipontheRole
ofDomesticCourtsRegardingInternationalLaw—or
Traditionalism. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.2.3 RationalChoiceTheoryintheLawandEconomics
ApproachontheRoleofDomesticCourtsRegarding
InternationalLaw. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2.3 TheRoleofDomesticCourtsinInternationalTradeLaw:
ASubstantialFieldApproach. . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.3.1 TheTraditionalismv.RationalChoiceTheoryDebate
ontheRoleofDomesticCourtsRegardingtheWTO
Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
2.3.2 TheAmericanCreationoftheGATTandItsLeadership
intheAdoptionoftheRationalChoiceTheory
inInternationalTradeAgreements. . . . . . . . . . . . . . . . . . 47
2.4 AnAssessmentontheRoleofDomesticCourtsinInternational
TradeAgreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
2.4.1 TheFunctionandObjectiveofInternationalTrade
Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ix