World Trade and Local Public Interest: Trade Liberalization and National Regulatory Sovereignty

266 Pages·2020·4.218 MB·English

by  Csongor István Nagy

Studies in European Economic Law and Regulation 19
Csongor István Nagy   Editor
World
Trade and
Local Public
Interest
Trade Liberalization and National
Regulatory Sovereignty
Studies in European Economic Law
and Regulation
Volume 19
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GiorgioMonti,EuropeanUniversityInstitute,Florence,Italy
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Csongor István Nagy
Editor
World Trade and Local Public
Interest
Trade Liberalization and National Regulatory
Sovereignty
Editor
CsongorIstvánNagy
DepartmentofPrivateInternationalLaw
UniversityofSzeged
Szeged,Hungary
ISSN2214-2037 ISSN2214-2045 (electronic)
StudiesinEuropeanEconomicLawandRegulation
ISBN978-3-030-41919-6 ISBN978-3-030-41920-2 (eBook)
https://doi.org/10.1007/978-3-030-41920-2
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Contents
1 WorldTrade,RegionalEconomicIntegrationsandLocalPublic
Interest:ComparativePerspectives. . . . . . . . . . . . . . . . . . . . . . . . . 1
CsongorIstvánNagy
PartI
2 BenefitsandCostsofInternationalTrade. . . . . . . . . . . . . . . . . . . . 11
ZomborBerezvai
3 TheEUintheMirrorofNPE:NormativePowerEurope
intheEU’sNewGenerationTradeandInvestmentAgreements. . . 33
JessicaC.Lawrence
4 AcquisCommunautaire+TheCopyrightAspectsoftheEU’s
FreeTradeAgreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
PéterMezei
PartII
5 AddressingEnvironmentalProtectionintheUnited
States-Mexico-CanadaAgreement(USMCA). . . . . . . . . . . . . . . . . 67
DavidA.Gantz
6 MemberStateCapitalism(s)andEULaw:ProtectingLocal
VarietiesintheSingleMarket. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
MartonVarjuandMónikaPapp
7 SouthAmericanTradePoliciesReconsidered:
The“ConvergenceWhileDiversity”Mantra. . . . . . . . . . . . . . . . . . 117
ValentinaDelich
v
vi Contents
PartIII
8 TheSupremeCourt’sAttemptsViaItsDormantCommerceClause
JurisprudencetoNavigateStatePolicePowerandNational
FreeTrade:PotentialLessonsforInternationalTrade. . . . . . . . . . 137
LeeJ.Strang
9 TheJudicialHistoryoftheFederalMarketofAustralia:Free
TradeVersusFreeEnterprise. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
GonzaloVillaltaPuig
10 India’sTrystwithFreeTrade:OvercomingtheInherent
ChallengesofFederalism. .. . . . . . . .. . . . . . .. . . . . . .. . . . . . . .. 173
WasiqAbassDar
PartIV
11 ForeignInvestorsandGreaterTransparencyinInvestor-State
DisputeSettlement:ReevaluatingConfidentialityExpectations
inInternationalInvestmentArbitration. . . . . . . . . . . . . . . . . . . . . 187
RebeccaE.Khan
12 InvestmentProtectionandSustainableDevelopment
inInternationalInvestmentAgreements:BuildingBridges
InsteadofWalls. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205
BegaiymEsenkulova
13 NewModelofInvestmentProtectionUnderCETA. . . . . . . . . . . . . 243
ZoltánVígandGáborHajdu
14 ScreeningofForeignInvestments:PromisesandPerils
ofTechnologicalSovereignty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253
MarcinJ.Menkes
Chapter 1
World Trade, Regional Economic
Integrations and Local Public Interest:
Comparative Perspectives
CsongorIstvánNagy
Trade liberalization has featured international economic relations since the conclu-
sionoftheGATTin1947.Theclubitestablishedservedasaplatformforaseriesof
trade rounds, which have been remarkably successful in diminishing tariffs, and
becameatrulyuniversalsystemwiththecreationoftheWorldTradeOrganization
in1994andtheextensionofitsmembership(currentlyWTOmembersaccountfor
97%ofworldGDP).1
The last couple of decades have seen a significant shift in the focus of this
process.
First,multilateralismseemstohavereacheditslimits,givingroomtobilateralism
andplurilateralism(orregionalism).WhiletheDohaTradeRoundhasfallenintoa
stalemate, new generation free trade agreements have been gaining ground. By
today, it became clear that the about-face of US foreign trade policy did not block
the internationalization of free trade. Although the US put the EU-US free trade
agreement (TTIP) aside,2 backed down from the trans-pacific free trade agreement
(TPP) and renegotiated NAFTA, the last decade of international trade has featured
numerous success stories. The TPP, renamed as Comprehensive and Progressive
Agreement for Trans-Pacific Partnership (CPTPP), was signed in March 2018,
without the US. The Canada-EU free trade agreement (Comprehensive Economic
andTradeAgreement,CETA)enteredintoforceinSeptember2017,followedbythe
EconomicPartnershipAgreementbetweentheEUandJapaninFebruary2019and
theEU-SingaporeFreeTradeAgreementinNovember2019.
Second, it is generally accepted that although customs duties are still an issue,
especiallyinindustrieshitbytariffpeaks,theyarenolongerthemajorhurdlefaced
by cross-border trade. As a corollary of this recognition, the focus of trade
1Nagy(2019),p.88.
2ForananalysisontheTTIP’scontroversialissues,seeMartonyi(2018).
C.I.Nagy(*)
UniversityofSzeged,DepartmentofPrivateInternationalLaw,Szeged,Hungary
©SpringerNatureSwitzerlandAG2020 1
C.I.Nagy(ed.),WorldTradeandLocalPublicInterest,StudiesinEuropean
EconomicLawandRegulation19,https://doi.org/10.1007/978-3-030-41920-2_1
2 C.I.Nagy
liberalizationshiftedtonon-tariffbarriers.States,inthenameofthepublicinterest,
may introduce standards, develop regulations, shape taxation, impose regulatory
burdens or maintain monopolies in a way that restricts trade. As a general experi-
ence,attimes,thesemeasuresareinfluencedbydisguisedprotectionism.Inresponse
tothis,anewgenerationoffreetradeagreementsemergedthatarecomprehensive,
cover the whole spectrum of trade items (goods, services, technology, capital etc.)
and extensively target non-tariff barriers. These agreements adumbrate a new gov-
ernance for international economic relations and, not surprisingly, have incited a
good deal of criticism for encroaching, with renewed enthusiasm, on national
regulatoryautonomy.
Whilethesedevelopmentshaveincitedagooddealofattentioninthescholarship,
thesubject’scomparativeperspectiveshavebeenlargelyneglected.Notably,trading
systems—the WTO, regional economic integrations and federal systems—center
around the dichotomy of free trade and local public interest: they prohibit the
constituent parts (states) from restricting trade and release them from this duty if
therestrictioniswarrantedbyalocallegitimateend.Thesefreetradelawsconcen-
trateinfourlayers:theglobalframework(WTO),regionaleconomicintegrations,as
wellastheEUasaone-of-a-kindsystem,andfederalmarkets,thatis,federalstates
with strong local regulatory powers (e.g. Australia, India and the United States).
Althoughthescholarshiphasnotcompletelyneglectedthecomparativeperspectives
ofthesubject,still,alotofworkneedstobedonetograspthepervasiveissuesand
cross-cutting questions of these systems. The limited number of works having a
comparativeperspectivehasbeenconfinedtocomparingtwofederalsystems3orto
makingcomparisonsastospecialpoints.4Withthis,freetradelawlagsconsiderably
behindother(moretraditional)fieldsoflaw,likecontracts,5constitutionallaw6and
antitrust/competitionlaw,7wheretheglobalsystemshavealreadybeenelaborated.
Thepurposeofthisvolumeistocontributetothefillingoftheabovegap,through
putting the central issues of regional economic integrations into a comparative
perspective. It provides a general economic analysis of the measurement of the
costs and benefits of trade liberalization and the role and function of normative
values in commercial policy. This is followed by a comparative analysis of the
approaches of different regional economic integrations (in North America, Europe
andLatin-America)andfederalmarkets(UnitedStates,AustraliaandIndia)astothe
tension between free trade and local public interest. The key issues of investment
3ForacomparisonbetweentheEUandUS,seeBarnard(2009).ForAustralia-EUcomparisons,see
McNaughton(2011);Kiefel(2010);Staker(1990);Puig(2008),pp.99,100–101and127–128.For
anEU-WTOcomparison,seeSørensen(2011).
4Foracomparisonoftreatyprovisions,seeBourgeoisetal.(2007).
5Tomentiontwonotableexamplesfromthewealthofliterature:ReimannandZimmermann(2006)
andGraziano(2019).
6RosenfeldandSajó(2012)andDorsenetal.(2010).
7Seee.g.Dunsetal.(2015).
1 WorldTrade,RegionalEconomicIntegrationsandLocalPublicInterest:... 3
law, as one of the most contentious elements of new generation free trade agree-
ments,arealsoaddressed.
Part I of the book deals with the general issues of international trade liberaliza-
tion: the measurement of economic benefits and drawbacks and the status of
normative considerations. While it is generally accepted by economists that free
trade generates wealth, the empirical measurement of this still calls for further
analysis. The wealth-generating effects of international economic intercourse are
asymmetricandplayoutinacomplexway.While,onthemacro-level,undistorted
international trade makes societies better off, on the micro-level, it leaves both
winners andlosersbehind.Furthermore, attimes, itseemsthatthedevelopmentof
trade calls for a normative structure based both on economic and non-economic
considerations.Internationaleconomicrelationsconcernnotonlygenuineeconomic
issuesbutalsonon-economiconesthatarerelevantfortrade.
The chapter of Zombor Berezvai (“Benefits and Costs of International Trade”)
gives an economic analysis of the benefits and costs of international trade. It pro-
videsanoverviewoftheeffectsonconsumers,enterprisesandthenationaleconomy
as a whole, with the use of theoretical models and empirical analyses. The chapter
points out that the gains and losses of international trade liberalization emerge
unequally in different segments of the society and the net positive effects are
non-linear. The latter may explain why policy makers are decreasingly interested
in furthering international trade liberalization. The chapter presents a set of issues
that need to be addressed to grasp the likely effects of new generation free trade
agreements.
The chapter of Jessica C. Lawrence, titled “The EU in the Mirror of NPE:
Normative Power Europe in the EU’s New Generation Trade and Investment
Agreements”, gives an analysis of EU trade and investment policy through the
prism of “normative power Europe” (NPE), specifically the EU’s use of trade and
sustainabledevelopment(TSD)toincorporatesocialandenvironmentalvaluesinto
itsbilateraltradeandinvestmentagreements.ItarguesthatTSDchapters,insteadof
attempts to engage in the diffusion of EU values abroad, are better understood as
performinganinternalfunction:theyallowtheEUtobelievesimultaneouslythatit
isacosmopolitan,progressivepower,andthatitisasavvy,effectivemarketbuilder.
Péter Mezei’schapter(“AcquisCommunautaire+ TheCopyrightAspectsofthe
EU’s Free Trade Agreements”) gives an overview of how the EU has constantly
modified and broadened the scope of its free trade agreements’ (FTAs) copyright
chapters.ItarguesthatheretheEU’schiefobjectivewastobuildaTRIPS+oracquis
communautaire+copyrightsystem.
Parts II and III analyze the same issue in regional economic integrations and in
federal markets. All free trade systems, same as WTO law, allow states to restrict
trade if justified by a local legitimate end. States may introduce standards, shape
taxation, impose public service duties on enterprises or maintain monopolies in a
way that restricts trade. Since the regulatory frameworks contain vague and fluid
conceptsandnotions,statesarenormallyaffordedawidemarginofappreciationand
theapplicationofthelawbecomesasocialandmentalprocess,blendingeconomic,
societal and legal considerations and aspects. Free trade systems differ as to how