A U.S. senator from New York doesn't want NBA players taking to the court wearing jerseys made in Asia.

"Basketball is an American game," Sen. Charles Schumer said.

Schumer held a press conference Sunday outside the NBA Store on Fifth Avenue, where he urged the league to intervene and stop adidas from moving production of the NBA's official uniforms to Thailand, or pull out of its contract with the sports apparel giant.

"Adidas' plan is to outsource the jerseys to Thailand and with that, they threw an airball big time," Schumer said.

Saying adidas has broken its contract with an upstate New York company that poured $1 million into the facility, Schumer called on the NBA to end its deal with the jersey maker if it goes ahead with the move from Perry, N.Y.

"Because it's an American sport invented in America, played better in America than anywhere else, the jerseys ought to be made here in America," Schumer said.

Schumer said about 100 jobs are at stake at American Classic Outfitters' factory, where more than half the uniforms worn by Kobe Bryant, LeBron James and other NBA players are manufactured.

"The bottom line is that this outsourcing has gone too far," Schumer said.

Is basketball really all that American?  The inventor of basketball was born and raised in Canada.  And the players are getting more and more foreign ("un-American", to borrow from Stephen Colbert).

But let me put that all aside and ask the following legal questions.  Let's say Senator Schumer succeeds in convincing Adidas to stay with the U.S. producer:

• Are his actions a "measure" that can be challenged in WTO dispute settlement?
• If so, would such actions violate any WTO obligations? Perhaps some U.S. services commitments?
• Is there a possible non-violation nullification or impairment claim (e.g., the U.S. lowered its tariff on these apparel products, but then prevented foreign production of such goods, thereby undermining the benefit)?

It’s not the global mechanisms that are wonky. It’s the weakness of the national governments pulling the levers. This would be as true of a plurilateral trade deal as of a multilateral, of course. There is no technocratic solution to the Doha round. It’s a political problem.

That sounds about right to me.  No doubt there are many WTO "governance" problems as well, but for the most part it's up to national governments to decide what they want from trade agreements and how seriously they want it.  Right now, there is a lot of disagreement on the former, and with regard to the latter there are other issues that seem to be a higher priority.

ADDED:  The other thing that occurs to me, speaking of politics, is that here in the U.S., there seem to more groups against a Doha agreement than for it, and the intensity of the opposition is greater than the support of the proponents.

So where does that leave us in terms of the exit strategies Tomer discussed?  I am torn between two extremes:  cut whatever deal you can versus abandon the round and start fresh.  Deep down, I think I prefer a radical overhaul, but I fear that it is not achievable right now, so it could be a mistake to try.

The options seem to be the following:

- "Keep on keeping on": Persist patiently, until conditions ripen for a comprehensive agreement. Some developing countries say they want this, the poorest actually mean it. The African Group ambassadors insist that given the choice between 'early' and 'succesful' they prefer successful. The 'early harvests' they hoped for - cotton, Duty-Free Quota-Free - have actually been pushed to the backburner. They think that they will lose from a non-comprehensive deal in 2010, and are trying to bring the larger developing countries to back them. But just like these states could never steer the process, they won't be able to prevent it from stopping. 

- Doha Light - Just Do It: Cut the losses, consolidate the little that has been agreed upon, because it does have value, get it done in 2010 and move on. This is the view taken by Bernard Hoekman at a ICTSD panel on "Bringing Doha to Closure". He says members should "grasp the bird in the hand", that a limited agreement that would include DFQF for LDCs, some new market access, and above all renewed commitments not to raise protection and support for domestic industries would be worthwhile, and worth having soon. Greater pressure for more market access should be shifted to post-round sectoral agreements, that would involve only the main importers and exporters in each sector, without holding the entire round hostage. 

- No deal/formal abandonment: On the same panel, Massimiliano Cali of ODI also advocated an early conclusion, preferrably with a reduced ambition deal but even without one, by comparing the costs and benefits of each scenario. According to him, (1) we haven't yet witnessed a protectionist spiral, and historically states have not tended to use 'water in the tariff' (the gap between ound and applied tariffs) - so a new tariff reduction agreement is not crucial' (2) the benefits of new end-of round tariff reduction would be small; small countries and LDCs would benefit, but progress is blocked by large players; and (3) the opportunity costs of being bogged down in the Doha process without being able to move on other new pressing issues are high.here is something to be said for this approach, but as Simon Evenett said (also on the same panel) there is too much bureaucratic vested interest in the round to let it end that way. It would also be very damaging to the WTO's already damaged reputaion (pointing out that all normative discussion of economic protectionism has effectively shifted from the WTO to the G-20).

- Informal abandonment: According to Evenett, this is a position already taken by many in practice. I agree - although this does not mean that at some level despite the substantive disengagement the round's conclusion is not still on everyone's to do list.

- "Functional UNCTAD": This was Evenett's term, describing the situation in which the WTO's negotation function is "in abeyance", and we are left with the dispute settlement function and perhaps an enhanced (and important) monitoring function. 

Lingering under this rather gloomy menu is the question of the reform of WTO decisionmaking processes, reform that is necessary to revive its negotiation function. But unfortunately, such reform is also tied to the Doha round exit strategy.

Risk, Science and Law in International Governance

Date: December 5, 2009 (Saturday)

Venue: Chicago-Kent College of Law

Illinois Institute of Technology

565 West Adams St.

Chicago, IL 60661-3691

For Registration, click http://www.asil.org/activities_calendar.cfm?action=detail&rec=100

Program Schedule

Saturday, December 5, 2009

8:30 am-9:00 am (Lobby)

Registration9:00 am-9:10 am

Welcome

Sarah Harding

Associate Dean, Chicago-Kent College of Law

Gregory Shaffer

Co-Chair, International Economic Law Interest Group, American Society of International Law

9:10-10:40 am

Panel I: Risk Science and International Trade

This session will provide an analysis of the current case law of the World Trade Organization on the connection between international trade and human health risks. Discussion issues include:

The WTO Hormones decision

The effectiveness of health measures and appropriate levels of protection

Risk assessment under WTO law

Gregory Shaffer, University of Minnesota Law School (Chair)

Warren Maruyama, Horgan & Hartson (“The WTO SPS Agreement: Ten Years after the Hormones Decision”)

Jeffrey Atik, Loyola Law School (LA) (“The Effectiveness of Health Measures and Appropriate Levels of Protection”)

Alberto Alemanno, Ecole des Hautes Etudes Commerciales,

Paris (“Risk Assessment under WTO Law: Workable Requirement or Probatio Diabolica?”)

10:40-11:00 am

Break

11:00 am-12:00 pm

Panel II: At the Edge of Risk Science

This session will provide provocative discussion of the interplay of risk science under international environmental law and the WTO norms. Discussion topics include:

Interpretation of scientific evidence

Precautionary principle and the WTO law

Dan Tarlock, Chicago-Kent College of Law (Chair)

Sungjoon Cho, Chicago-Kent College of Law (“Science, Hermeneutics and International Law”)

Markus Wagner, University of Miami School of Law (“Taking Interdependence Seriously: The Need for a Reassessment of the Precautionary Principle in International Trade Law”)

12:00 pm-1:00 pm

Lunch

1:00-2:30 pm

Panel III: Risk Science and International Governance

This session will review sophisticated regulatory arrangements involving both international organizations and self-regulatory regimes. Topics include:

Standards of review in the WTO tribunal

Delegation of risk regulation to private parties

Regulating risks through online networks

Claire Kelly, Brooklyn Law School (Chair)

Tracey Epps, University of Otago, New Zealand (“To Defer or Not to Defer? Has the Appellate Body Resolved the Issue of an Appropriate Standard of Review in SPS Cases?”)

Adam Muchmore, University of Chicago Law School (“Delegating Risk Regulation”)

Jennifer Shkabatur, Harvard Law School (“Fighting Global Risks through Online Networks”)

2:30 pm-3:00 pm

Break

3:00 pm-4:30 pm

Panel IV: New Challenges and New Ideas

This session will highlight the emerging challenges in the relationship between international trade and human health regulation as well as suggest innovative institutional solutions to tackle those challenges. Issues for discussion include:

The “necessity” test under GATT Article XX

Risk assessment and international investment law

Political challenges in the SPS Agreement

Jason Yackee, University of Wisconsin (Madison) Law School (Chair)

Benn McGrady, Georgetown University Law Center (“Chains of Causation and Necessity under Article XX of the GATT”)

Justin Jacinto & Rahim Moloo, White & Case (“Science and the Assessment of Legitimate Government Regulation in International Investment Law”)

Christopher Thomas, University of Cambridge (“Rationalising Politics: Science, Conflict, and the SPS Agreement”)

4:30 pm-5:00 pm

Conclusion: Questions and Answers

* We regret that CLE credits are not available for this conference.

In any case, beyond the posturing on agriculture and Geographical Indications, probably largely meant for the French press, the interesting point mentioned was a proposal apparently made a couple of days ago by France together with Brazil about the regulation of the global market for agricultural land. I haven't seen the proposal and don't know in which forum it has been made (WTO or otherwise).

Whatever it is, it relates to this phenomenon: millions of hectares being purchased by countries like China and Saudi Arabia, that are concerned about their food security. Theoretically, I wonder if this could be a WTO issue, if only because it could influence international trade in agricultural products (not to mention biofeuls), or through the backdoor of agricultural services. Regardless, this is clearly a very complex issue as far as development is concerned, worthy of research.

On another level, given the history of colonialism, I wonder why it should be France, or Europe at all that is bearing the flag on this issue. When they wanted land in Africa, they didn't even pay for it.  

Brazil Minister of External Relations Celso Amorim:

The Doha Round was launched with the objective of bringing the development dimension into the WTO. Over the last 8 years we have built a negotiating package that potentially contains benefits for developing countries and for the membership as a whole.

 The contribution of developing countries would be greater than that given by developed countries in any of the previous negotiating Rounds. It is unreasonable to expect that concluding the Round would involve additional unilateral concessions from developing countries.

It would be interesting for the U.S. Trade Representative and the EU Trade Directorate to make the following proposal: 

Hey, Wen, you're right about the unfair tire tariffs and the like.  Let's make a trade deal:  you allow the yuan to appreciate, say, 20% against the dollar over the next twelve months.  In return, we will announce a voluntary two-year moratorium on any new anti-dumping and escape clause measures targeted against Chinese imports.  What do you say?

To be honest, I'm not sure if this is legal, but it would be an interesting gambit.

This might not work -- among other things, there would be MFN problems to a moratorium that covered only Chinese imports -- but I like the general concept.  How about this instead:  The U.S. and EU abandon the "non-market economy" classification in return for China allowing the yuan to appreciate?

Compare to Catherine Ashton, on her last day in office at DG Trade, and as she put it - in her last three minutes of speech. She said that 'low-intensity protectionism has been contained, and very quickly she turned to discuss the need to address the needs of poor developing countries, and that we are moving too slowly to reach the goal of completing the round in 2010, with an 'ambitious, balanced and comprehensive' development package as its goal. She then moved on to discuss climate change issues, especially the encouragement of development and trade in environmental goods and services. I don't think she mentioned market access. And she even found time to thank Pascal Lamy for his efforts.

It's easy to be critical of both of these statements - could Kirk have said much else, given the evident lack of a mandate to make any progress on key issues? By focusing on development and climate change was Ashton not evading responsibility for some EU positions that have nothing to do with either and everything to do with protection and market access? In any case, it's interesting to see how these very different statements reflect very different styles of rhetoric and cultures of discourse. The Americans and the English are indeed divided by a common language.     

Not likely to happen, but who knows? Lamy, who left before the other panelists spoke, described the Ministerial as a test to gauge the political determination to conclude the Doha Round in 2010. The elephant in the room (who is more often not in the room, or at least in another room) is the US. As Marchi said, a lot depends on a particular country, that needs to get its mandate, or else Ministers will be on a "stationary bicycle - a lot of sweating, but very little moving".   

T.  

At the outset, let me note that, as with trade more generally, offshoring has its winners and losers. The most prominent losers are people in rich countries (such as Japan) who lose their jobs when these jobs are outsourced to countries where wages are lower. The winners may include several groups: the people in developing countries who now have jobs (or higher paying, higher skill-level jobs than they had previously); the corporations who now pay lower wages; and consumers of the products and services in question, who will likely pay lower prices.

It’s certainly reasonable to be troubled by the job losses in Japan. Any government should be concerned about this, and the people affected are not going to be happy about it. But is trying to stop offshoring an appropriate response? I think there are good arguments that it is not.

First, any measures taken in this regard will prevent developing countries from moving up the economic ladder, or at least slow their progress. Rich countries talk a lot these days about helping developing countries grow their economies (e.g., tariff preference programs, various aid programs). It would be a shame to see a promising private sector initiative that achieves this same goal be undermined by government action. All that is required by governments here is to do nothing and it will be a positive for economic development.

And second, in the absence of offshoring, developing country governments are more likely to take action to encourage their own, competing industries. If they succeed, the result would be competition for rich country companies from those same, lower-wage workers, which means that the ultimate result would be similar, just delayed a few years. (And if the response to that competition is protectionism in the rich countries, then we just end up with a large number of protected, national markets, which doesn’t seem like a very efficient outcome.)

So, yes, be concerned about job losses from offshoring, and try to help those who are affected through various government programs. But offshoring is not necessarily something we should try to stop, even if we could, as there are many people who benefit from offshoring, including a large number of people in developing countries. It may be one of the best development programs available.

All good points, but I was disappointed to see no mention of the carbon consumption tax alternative, which can reduce or eliminate a lot of the trade conflict.

[WTO Members] shall not, by exchange action, frustrate* the intent of the provisions of this Agreement ...

Thus, Article XV:4 refers to the "intent of the provisions of this Agreement."  One provision of "this Agrement" (that is, the GATT) is Article II, which is titled "Schedules of Concessions" and requires Members to abide by their scheduled tariff concessions.  Here's a question I have:  What is the intent of Article II and how does that impact on the Article XV:4 obligation?

A narrow view of the purpose of Article II might be that it obligates Members not to impose duties/charges in excess of the scheduled duties/charges (i.e., the amounts they have promised).  That is, its purpose is simply to enforce the concessions.

But it may also be possible to justify a broader characterization and suggest that the underlying purpose of enforcing the concessions is to provide greater "market access" for imports.  That is, the true goals of scheduling the concessions are to (1) reduce duties/charges and (2) provide certainty by establishing an upper limit on them.  This helps open the domestic market to imports.

So breaking down my original question, the first part is, which of these two purposes (keeping tariffs at or below the bound rates vs. greater market access) is a better description of the objectives of Article II?  Then, if the purpose is market access, the second part is, can an exchange rate peg which keeps a currency undervalued be said to frustrate the intent of Article II by keeping prices of imports artificially high, and thus undermining the market access achieved by the tariff concessions?

Any thoughts?