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International Economic Law in a Time of Change: Reassessing Legal Theory, Doctrine, Methodology and Policy Prescriptions

ASIL International Economic Law Interest Group 2010 Biennial Meeting in partnership with the Minnesota Journal of International Law and ASIL Midwest

19 November 8:45-10:15: Panel A

Transnational Law and Domestic Regulation

Moderator: David A. Gantz

Transnational Influences on National Regulatory Reform in Large Developing Countries: Brazil's Contrasting Experiences in Electricity and Telecommunications Governance – Mariana Moto Prado

Brazil conducted massive privatization reforms in infrastructure sectors from 1995 to 2002. Bureaucrats had an important role in these reforms, but this role was very different in the electricity and telecommunications sector. In the electricity sector, bureaucrats largely resisted privatization reforms and designed a regulatory agency that was not independent from political interference. In contrast with electricity, the bureaucracy's leadership in the telecommunications sector was actually supportive of the privatization reforms and advocated for an independent regulatory agency. Considering these differences in the bureaucratic influence over privatization reforms, this paper will analyze the relationship between the national bureaucracy and international networks of regulators and/or international bodies. The paper investigates whether this relationship influenced the national bureaucrats’ position regarding proposed reforms.

In the first part of the paper, I will argue that the bureaucrats of the telecommunications sector seem to have been heavily influenced by the international telecommunications networks and institutions, such networks and institutions include the International Telecommunications Union (ITU), the International Telecommunications Satellite Organization (Intelsat), and the Negotiating Group on Basic Telecommunications at the Uruguay Round of the WTO. In contrast, in the electricity sector, there was neither such an international union nor a WTO Agreement. I would like to assess to what extent this international connections in the telecommunications sector could explain their differences with the electricity sector. The second part of the paper will discuss possible reasons why transnational and international networks and institutions are stronger and more influential in the telecommunications sector if compared to electricity. In the third part, this paper will assess whether we can build up a case for more transnational and international integration of electricity sector regulators. I will discuss whether this integration is possible, how it could be implemented and what are the possible benefits deriving from it. Passive Corruption and Transnational Firms: A Regulatory Analysis – Joseph W. Yockey

As regulators continue to examine the role played by corruption in the global financial crisis, an important point underlying any analysis remains the fact that corruption involves both supply and demand. On the supply side, “active” corruption occurs through the payment of bribes by a firm. On the demand side, “passive” corruption occurs through the request for or receipt of a bribe by a foreign official. Though these concepts are interrelated, traditional regulatory attempts to curb corruption have focused almost exclusively on active bribery due to concerns over jurisdiction and sovereignty.

This paper reassesses the traditional emphasis on active corruption in two ways. First, I contend that jurisdictional concerns surrounding passive bribery interdiction are overstated. This requires building on developments in international law that show how reputational and market forces influence transparency and promote cross-border cooperation. These developments reveal an increasingly uniform opposition to corruption that should encourage compliance with extraterritorial initiatives. Second, I argue that undesirable consequences often result when anti- bribery regulations fail to proscribe passive corruption. These consequences include the risk that prohibitions directed only to active bribery will produce inequitable assessments of corporate culpability in light of the practical complexities of international business transactions and prevailing theories of respondeat superior liability. Paradoxically, these considerations also suggest that supply-side approaches may reduce incentives to avoid bribery by forcing firms to make difficult risk calculations in the face of compelling financial pressures and opaque regulatory guidance. I conclude by proposing that the extraterritorial regulation of passive corruption is now viable and advisable. Such an approach would add balance to existing regulatory efforts and provide lawmakers with enhanced flexibility to shape enforcement policy. It would further allow for a more just and nuanced treatment of firms by accounting for demand-side origins of bribery and the complexities of the international economy. Check Please: Evaluating the Means of Deterrence

in the Food Import Industry – Alexia Brunet Marks

In theory, firms face economic incentives to avoid actions that may violate law. Yet relatively few foreign firms are held accountable for contamination of food products. If we consider that 200,000 Americans are sickened by food borne illnesses on a daily basis and 325,000 are hospitalized by food borne illness per year, what sanctions best deter those that sell contaminated products? This article focuses on food safety by asking, how do we create stronger disincentives within our legal system to deter international companies from deliberately adulterating food or selling contaminated food?

These questions can be examined by considering import refusals, verdicts and voluntary food recalls, using three unique datasets: data on import refusals U.S. Food and Drug Administration (FDA) from 1997-2007, data on product liability (food borne illness) cases collected through the Westlaw “Personal Injury Jury Verdicts and Settlement Summary” database from 2000-2010, and data on voluntary food recalls from 2000-2010. Among the three datasets, preliminary results demonstrate that product liability laws show promise in their ability to deter. The FDA data reveals that occurrence of persistent violators of U.S. import laws. If import regulations do not sufficiently deter repeat offenders, is the negative press coverage of a food recall or the financial burden of a verdict any better at deterring a future occurrence? The repeat offender problem is present in recalls but not present in the product liability dataset. Prior research on product liability lawsuits involving food items manufactured in the U.S. showed that litigation is not the avenue to deter contaminators because plaintiffs rarely bring cases forward due to high transaction and information costs. We show the opposite. Deterrence may be working when considering the high number of cases and verdict amounts resulting from arbitration or settlement. Preliminary results show that firms that settle or arbitrate rarely repeat the offense.

The International Phenomenon of Clawbacks – Jarrod Wong

The doctrine of clawbacks appears to have had seemingly variant usages in the United States. The term “clawback” has been used to refer to remedies for investors defrauded in the multi- billion dollar Madoff ponzi scheme, and also separately to measures seeking to recoup bonus compensation paid to AIG executives. Our analysis suggests that both types of measures can coherently be described as clawbacks, defined as a theory for recovering benefits that have been conferred under a claim of right, but that are nonetheless recoverable because unfairness would otherwise result. This definition includes both (1) retroactive clawbacks like those described above that are imposed after the contractual right to the bonuses has arisen and the benefits have been conferred; and (2) prospective clawbacks that are introduced into contracts before the claim of right to the benefits has arisen. The observed difficulty with implementing retroactive clawbacks illuminates the very nature of clawbacks, and why prospective clawbacks operate more effectively than retroactive ones.

Clawbacks, however, are not merely an American phenomenon. Similar difficulties have been encountered in effecting retroactive clawbacks in foreign jurisdictions, including in lawsuits against ponzi scheme operators in Dutch and Luxembourgian courts as well as in British government efforts to restrict bonuses paid out to employees of government-owned banks. This paper shows that these difficulties not only demonstrate the global nature of clawbacks, but also suggest that their prescription lies in introducing prospective rather than retroactive clawbacks. I advocate writing prospective clawback terms into contracts directly, or implying them through default rules such as securities regulations. The result will be a “bottom-up” promotion of corporate governance but without need for international regulatory bodies. 19 November 8:45-10:15: Panel B

International Economic Law Governance and International Policy Space

Moderator: Jeffrey L. Dunoff

Promises and Perils of New Global Governance:

Examining the New Role of the G20 – Claire Kelly and Sungjoon Cho

In the wake of the 2008 financial crisis a new global governance structure emerged. During and subsequent to the crisis, the G20 arose as a coordinating executive among international governance institutions. It set policy agendas, prioritized initiatives and, working through the Financial Stability Board, drew other governance institutions and networks such as the World Trade Organization, the International Monetary Fund, the Basel Committee on Banking Supervision, the Organization of Economic Cooperation and Development and the International Organization of Securities Commissions to set standards, monitor enforcement and compliance, and aid recovery. The G20’s authority cross-cuts regimes and creates collaborative linkages between economic law and social issues such as food security and the environment. Its leadership role, born, in some sense, out of exigency, now continues to evolve as part of the new international economic law order.

The G20’s executive role presents new opportunities for coordination and collaboration among the wide variety of institutions and networks operating under its umbrella. The institutions and networks now engage in an ongoing dialectical process that propels standard setters towards convergence on a number of fronts. As a practical matter this convergence, may be desirable, and even necessary. But the complexity of this process should not stop us from closely analyzing the legitimacy criteria supporting this framework as well as the legitimacy gaps. While the new economic order offers avenues for better transparency and implementation, it also poses serious legitimacy challenges. In particular important questions concerning, the participation of civil society, development, and the danger of capture must be addressed. We propose to examine this new global governance order with the G20 at the helm, considering the theoretical underpinnings of governance networks, and in particular focusing on the G20s emerging relationship with the WTO, UNCTAD and the OECD. The WTO, Developing Countries and the Problem of Development – Nicole D. Foster

The problem of development and how to address it effectively is one which seems to haunt the World Trade Organisation (WTO). This paper revisits this issue against the backdrop of the increasing prominence of developing countries within the international legal order, including the multilateral trading system. In so doing, it asks what are the implications of this rise in prominence of developing countries for how the WTO will and should deal with the “development dilemma.” The paper begins by examining the issue of development, how the WTO has dealt with this issue in the past (with specific reference to the Doha Round of trade negotiations) and whether in fact the WTO is or should be considered a “development” organization at all.

The paper then traces the changing role of developing countries within the WTO (as contrasted with the General Agreement on Tariffs and Trade 1947) and assesses the extent to which they can really be said to be “setting the agenda” within the WTO, and in particular, within the Doha Round. From there, it goes on to explore how, if at all, the increased influence of developing countries can point a way to a more sensitive treatment of development within the WTO and a change more broadly in the culture of the organization. It concludes by offering some comments on the way forward even as it expresses some pessimism on the probability of real change in the near future. Public and private actors redefining the WTO adjudicatory system role in the global arena: examples from the civil aircraft business – Michelle Ratton Sanchez Badin

Since the creation of the World Trade Organization (WTO), its dispute settlement system (DSS) has played a vital role in reinforcing the autonomy and the institutionalization of the multilateral trade system. Besides its function to decide on the accomplishment of members’ obligations and the overall implementation of WTO agreements on a case-by-case analysis, the DSS has been described as a locus for advancing in sensitive issues on which member’s have not been able to reach an agreement on the negotiating level. This paper explores a fourth role for the system: its adjudicatory enforcement towards other regimes, in the case, the civil aircraft sector.

A group of institutions and actors has been active in regulating the civil aircraft sector. The WTO itself, the OECD and other bilateral arrangements are important center and regulatory frameworks for the coordination of the most important actors in this system. The DSS has been provoked to play a role in the set of relations, and this has been delineated by a well-developed interaction among public and private actors. Examples are found in the Embraer-Bombardier cases and well as in the disputes involving Boeing and Airbus. The paper applies a socio-legal methodology to identify the actors and the mechanisms used by them, as well as their dynamics in operating one system. The main questions explored in the paper are: what are the main contributions of the DSS to this set of relations? Why it has been invoked? What are the consequences for the DSS and its operational structure in integrating this group of institutions? And, what about the WTO system itself and its other members (not part of the central relationship)? Carving out Policy Autonomy for Developing Countries in the WTO – Alvaro Santos

Development scholars disagree on how restrictive the current trade regime is. This paper argues that despite the legal restrictions that the WTO has imposed on states’ regulatory capacity, developing countries can carve out policy space to advance their development goals. Drawing from socio-legal studies on adjudication, this paper analyzes how developing countries may be able to gain space under existing rules and institutional practices in the WTO through lawyering. This paper focuses on the ability of developing countries to use their legal capacity to influence rule-change for domestic development goals.

As a case study, the paper analyzes the experience of Mexico and Brazil, contrasting their participation in WTO dispute settlement, their different legal capacity and their dissimilar policy strategies. The examples attempt to show that while the WTO rules are not entirely flexible, developing countries can use legal tools at their disposal to carve out room for their economic policies. The analysis ultimately sheds light on the agency of developing countries’ elites and highlights their responsibility to promote development despite the limitations imposed by international institutions. 19 November 10:30-12:00: Panel A

International Monetary Law

Moderator: Anna Gelpern

The Structural Problem of International Monetary Law – Joseph Perkovich

In 1971, the Nixon Administration abandoned dollar convertibility into gold in reaction to over accumulation of dollar reserves by European creditor countries awash in OPEC deposits and disinclined to revalue their own currencies. The breakdown of parities ushered in the era of unmanaged exchange rates. However, it failed to precipitate corresponding alterations to the IMF’s exchange control law. Since the Asian crisis circa 1997, China and other East Asian economies have amassed vast dollar reserves not only to foster growth but also to insure against the exodus of capital and to avoid a Fund bailout with conditionalities. Expansionary monetary and fiscal policies have fed Asia’s accumulation of Treasuries, thereby permitting currency undervaluation via dollar pegs. These policies have contributed to the profound misalignment of current accounts that partly precipitated the financial crisis and current recession and have heightened the concern over the external debt levels of a number of states. Should the looming European debt crises materialize to some extent, then a harsh product of this monetary instability will have deepened the global recession via a familiar type of turmoil, notwithstanding some significant differences between European sovereign bonds and external debts of emerging markets.

The optimality of the post-1971 non-system of unmanaged exchange rates is scarcely debated. This presentation would consider two aspects of a prospective legal framework: (1) enforceable agreements among the states of systemically key currencies (a) to manage currency exchange rates and (b) to recognize exchange controls when applicable in contract actions before their municipal courts; and (2) multilaterally coordinated exchange control to manage balance of payments. This discussion must also contemplate key implications of (i) practices and contractual terms (e.g., collective action clauses) of sovereign bonds, (ii) creditor litigation in municipal courts and investor-state arbitrations and (iii) sovereign debt markets regulation. Updating the International Monetary System to Respond to Current Global Challenges: Can It Happen Within the Existing Legal Framework? – Aldo Caliari

The global economic crisis 2008-09 triggered the most intense debate about the international monetary system that the world has seen in the last four decades. International policy-makers from both developed and developing countries, intergovernmental organizations as well as business sector leaders and prominent academics have proposed a number of reforms. It is likely that some of the reforms can be introduced without significant revisions to the IMF Articles of Agreement. However, part of the debate revolves around the adequacy of the existing legal framework. In this regard, the principles and provisions surrounding the roles of the U.S. dollar and the Special Drawing Rights (SDRs) in the global reserve system envisioned in the 1960s may prove too limited a framework to allow for reforms that can take into account current and acute challenges.

A first challenge is to foster an orderly exit from the global imbalances and a mechanism for more symmetric adjustments while avoiding recessionary impacts. Second, the need to reduce currency volatility, with its consequent negative implications for trade flows. Third, as development and climate finance needs grow, a system where only global liquidity needs justify further issuance of SDRs may no longer be a tenable proposition.

This paper will introduce the main legal provisions in the IMF Articles of Agreement that set the functioning of the global reserve system. Then it will provide a brief survey of the monetary system issues raised by the recent Great Recession, reform proposals that have been made and where they are being discussed. It will make an assessment of such proposals from the standpoint of the three challenges mentioned above and, finally, it will assess to what extent existing legal provisions can accommodate (or not) changes that respond to such challenges. In this process, an outline of areas where legal reform may be required will emerge. The IMF and the Future of Multilateral Surveillance – Adam Feibelman

The current financial and monetary woes in the Eurozone have revealed a variety of fundamental weaknesses in the framework of regulation of the international financial and monetary systems. This Article explores one such weakness – the uncertain status of systemically important, non-state financial and monetary institutions. Recent events in Europe highlight the complicated triangular relationship between the IMF, European states, and the European Monetary Union. While the Fund has formal authority to conduct bilateral surveillance of Greece and to enforce Greece’s obligations with respect to exchange rate policies and external stability, much of the relevant policymaking affecting Greece’s obligations in these areas is now conducted by regional institutions that are not members of the Fund. Furthermore, as the Euro has become an increasingly important currency area, its impact upon the international monetary system has become a central regulatory concern. Thus, the Fund’s ability to conduct both bilateral and multilateral surveillance is greatly influenced by institutions over which it has no formal authority.

This scheme of overlapping and largely independent regulatory domains poses many hazards. It can dilute accountability for individual institutions, which makes it dangerously easy for well-recognized problems to go unaddressed. More troubling, there is a significant potential for tension between the economic and political interests of currency unions like the Euro zone and those of the rest of the world in promoting stability of financial markets and the international monetary system. Union-level institutions will tend to be focused primarily on stability and success of the union and only indirectly concerned about the stability of international systems.

This Article argues, therefore, that the Fund should engage more directly and aggressively with non- member institutions that exert significant influence over the international monetary system. Ideally, such institutions should have at least some formal obligations pursuant to the Fund’s Articles of Agreement. Expanded Mandate for the IMF: Global Financial Stability and Legal Implications for the Articles of Agreement – Ioana Ciobanasu

The International Monetary Fund (IMF), an institution that almost lost its meaning before the Great Recession of 2007-09, came back to life with all of its powers and limitations. This paper explores how to keep the Fund relevant in the current international economic environment.

This paper advocates an expanded mandate for the IMF in the area of global financial stability. This study affirms that the institution’s irrelevance before the Great Recession was due to the narrow mandate with respect to international monetary problems. Following economic theory, the Fund should be able to oversee not only the exchange rate developments of its members, but also developments in the financial sector, capital flows and domestic macroeconomic policies. The question thus becomes: What are the implications at law if global financial stability is incorporated into the purposes of the Fund under the Articles of Agreement?

After arguing the necessity of an expanded mandate, the study becomes structured around two different topics: surveillance (bilateral and multilateral) and financial regulation. The sequence is then symmetrical for each topic. The paper first presents desirable policies and then considers the legal implications of adopting such policies will follow. The new policies may include issues such as:

1. Jurisdiction over the capital account; 2. New “Principles of Financial Regulation” (see OECD), with the purpose of identifying and closing any regulatory gaps; and 3. Powers in the area of global systemic risk generated by large complex global international financial institutions (LCGFIs).

The paper concludes that amendment of the IMF Articles of Agreement is required if global financial stability becomes a clear purpose. The discussion concentrates on Articles I (“Purposes”), IV (“Obligations Regarding Exchange Arrangements”) and VIII (“General Obligations of Members”). The aim is to ensure that the IMF is more focused and tailored to the needs of the current global financial setting. 19 November 10:30-12:00: Panel B

Roundtable:

Robert Hudec’s Developing Countries in the GATT—Where are we now and why?

Moderator: Gregory Shaffer

That story line of Robert Hudec’s Developing countries in the GATT Legal System was to ask how developing countries remained outside of the momentum toward liberalization that the GATT legal system created among developed countries. Given that developing countries’ role in world trade and in the GATT/WTO system has changed dramatically since Hudec wrote, continuing that story line into the present would likely miss a lot of what has transpired. This session will review Hudec’ interpretation of the era he studied, then ask how, and influenced by what, developing country trade reform might have created its own momentum, and how this momentum has interacted with the GATT/WTO system.

Discussants include: J. Michael Finger, Bernard Hoekman and Chiedu Osakwwe Developing Countries and GATT Rules: Dynamic Transformations in Trade Policy Behaviour and Performance – Chiedu Osakwe

What factors explain the shift to policy reforms and liberalization in developing countries after the starting 1940s "special and differential" approach to GATT rules and disciplines? How did this reform-driven behaviour affect the trade performance of developing countries, the agenda and functioning of the WTO? In describing the starting legal relationship of developing countries to GATT rules and disciplines, Robert Hudec observed that GATT developing country members never agreed to accept the same disciplines as developed members, but sought exceptions from GATT obligations and code of behaviour. The GATT's legal relationship with developing countries was primarily the history of demands for special status. This approach badly served developing countries and compromised the MFN obligation. This argument correctly characterized the period which Hudec analyzed. While strains of this special and differential approach have persisted, significant changes have occurred. Developing countries trade policy behaviour has evolved to demonstrate an offensive reformist engagement, but also defensive postures, averse to rigid constraints on policy flexibility. How did developing countries create their own momentum for liberalization and reform? Their liberalization impulse is explained by the combination of domestic pressures to respond to crises and national development priorities, compliance with systemic trading rules, adjustments to commitments from successive rounds of trade liberalization and, implementation of domestic reforms pursuant to WTO accession negotiations. The analysis of developing country Recently Acceded Members (RAMs) indicates extensive trade reforms and optimization of WTO rule- compliance. This trade policy behaviour has resulted in stronger trade performance and resilience, relative to traditional Members. A positive relationship exists between domestic reforms for compliance with WTO rules and trade performance. Analysis indicates that the liberalization momentum is driven by complex dynamic interactions between domestic priorities and compliance with trade rules, linked to degrees of flexibility. These relationships are in question in the Doha Round. Concluding the Round is indispensable for tightening the rules, sustaining trade reforms, integrating developing countries into the rules-based system and reinforcing the WTO as a global public good for international cooperation. 19 November 14:00-15:30: Panel A

International Financial Law

Moderator: Chris Brummer

Indicators as International Law: The Globalization of Corporate Sustainability Reporting – Galit Sarfaty

This paper will analyze how the transformation of indicators into international law is altering the nature of global governance. The Global Reporting Initiative (GRI) is a notable case study of this phenomenon. Founded in 1997, the GRI is an independent, multi-stakeholder organization that has developed a framework of principles and indicators to report on social, environmental, and economic performance. Reporting under the GRI has become the norm for large companies globally, with more than three-quarters of the Global Fortune 250 companies using GRI guidelines as the basis for their reporting on corporate responsibility. Moreover, the U.S. Securities and Exchange Commission (SEC) recently cited the GRI as a model framework for sustainability reporting in its 2010 guidance note regarding disclosure related to climate change.

In this paper, I will examine the evolution of corporate sustainability reporting under the GRI from a set of global norms to international law, which is currently shaping domestic governance regimes. This development has involved a transformation and dilution of the norms into a set of indicators, an emerging technology of governance that relies on numerical information to evaluate performance and simplify complex social phenomena. In order to understand the lifecycle of the GRI from norms to indicators to international law, I will trace the norm production, transmission, and internalization processes in a variety of settings using ethnographic fieldwork and interviews. I will focus on the distinctive effects of GRI indicators on policy formation and decision-making in corporations and domestic regulatory bodies, particularly the SEC. Through this research, I aim to study the normative implications and unintended consequences of the use of indicators as international law, including shifts in accountability for decision-making, the distribution of power among actors, and the dominance of particular forms of expertise. Can International Finance Be Understood Through The Lens of International Trade? – David Zaring

Why has trade regulation come to be such a critical part of the way that academics think about international law and international regulation, while the oversight of international finance is not? The answer is over-determined. Trade law has benefitted from academics who have been tremendous institution-builders, centralized enforcement rather than via a strong principle of subsidiarity, and so on. But it is also because trade regulation fits within the paradigm of public international law – there is a treaty and a tribunal – while financial regulation does not.

Indeed, international financial regulation has pursued some similar goals as has international trade, but the means that are different. For example, there has been a process to ensure that domestic financial institutions are treated with no more laxity than international financial institutions in the various important financial markets across the world – a cognate to international trade’s national treatment principle. As with trade (particularly regarding the health and safety regulations that affect trade), there has been an effort to harmonize the more technical rules for regulating global financial institutions across borders.

But trade and finance perform different functions of international administration based largely on the different way they are structured. The trade regime resolves disputes largely through adjudication, though scholars like Dunoff and others have noted that there is increasingly active harmonization effort throughout the trade process. International finance has proceeded via rulemaking. This choice of policymaking form has important, but often overlooked, procedural consequences. Choice of form affects the effectiveness, flexibility, accountability, and transparency of an international regulatory regime. The rulemaking model of finance, when contrasted with the tribunal model of the WTO may explain a great deal of the difference between the two institutions, as well as, perhaps, the different amounts of attention paid to them both. Emerging Norms of Sovereignty in International Debt – Odette Lienau

Despite extensive discussions of revising the sovereign debt regime following the recent financial crisis, little attention has been paid to changes in the public law concept of sovereignty that implicitly undergirds this international financial arena. While the basic norms of sovereign lending have remained relatively constant since the 1980s debt crisis, public international law has witnessed increasing contestation over the relevance of domestic sovereign legitimacy for international governance. This paper analyzes competing concepts of sovereignty embedded in the debt regime today and the possible consequences of adopting these alternative visions for future sovereign lending.

Perhaps unwittingly, a distinct theory of sovereignty supports the lending system’s dominant norm of sovereign debt continuity – that is, the general rule that states should repay debt even after a major crisis or regime change and the related expectation that they will otherwise suffer reputational consequences. Sovereign continuity effectively derives from what I call a strictly statist conception of sovereignty – the idea that the content of and changes in a state’s internal structure, interests, and popular legitimacy are irrelevant to its status as ‘sovereign’ and thus to its external relations and obligations. However, adherence to alternative visions of sovereignty that have gained prominence in recent decades – whether grounded in democratic ideals or basic constitutionalism – results in different expectations of appropriate action in international debt law.

This disconnect raises an important range of inquiry. Should assumptions about sovereignty in international debt be questioned to the same degree as in other areas? Is it desirable to encourage coherence between the concepts of sovereignty at work in international finance and in political or human rights areas? If there is an emerging norm of democratic governance in international law, should this norm be transferred into international financial regimes? Answering these questions should help to clarify international economic law issues that I believe will only become more pressing in coming years. Regulatory Reforms: Flawed Ratings and Regulatory Arbitrage – Sarah Woo

The United States and Europe have both enacted respective regulatory reforms to deal with problems arising from the role of credit rating agencies (“CRAs”) in the financial crisis that started in 2007. In particular, while CRAs played a central role in investor decisions and financial stability, it is clear that their ratings failed to reflect early enough the risks posed by worsening market conditions. In their responses to this problem, the United States and European countries have, however, moved in different directions. This poses a complicated problem as CRAs are international economic institutions whose actions have global impact. Moreover, it can be argued that the reforms do not sufficiently address fundamental philosophies behind the rating process that increase pro-cyclicality and contribute to the build- up of global systemic risk. It seems that the reforms are being based on ideas from the Information Flow Model (i.e., focusing on the extent and quality of disclosure), rather than the Direct Oversight Model (i.e., the appropriate standards of due diligence in performing rating analysis).

This paper explores three main issues: firstly, the potential problems, including regulatory arbitrage, resulting from the lack of coordination in international regulatory reforms, and secondly, whether the level of regulatory intervention corresponds well to the precise type of market failure in this area, and finally, whether the reforms can go further, e.g., by requiring CRAs to provide stressed ratings or mandating certain stress scenarios underlying the ratings. This paper argues that shying away from interfering with the content and methodology of ratings is likely to be a mistake. These issues will be discussed in light of an empirical analysis of agency ratings from two angles: firstly, an assessment of the institutional philosophy of “through-the-cycle” ratings and how the sensitivity of such an approach to downturns is seldom disclosed, and secondly, an examination of the respective performance of the quantitative versus qualitative components agency ratings which sheds light on the stability of ratings and why institutions are vulnerable to cascading rating downgrades once economic turmoil sets in.

19 November 14:00-15:30: Panel B

International Economic Law and Domestic Intersections

Moderator: Padideh Ala’i

Strategic Globalization: The Logic of Partisan Support and Opposition to International Law – Jide Nzelibe

Traditional accounts in both the international law and international relations literature largely assume that great powers like the United States enter into international legal commitments in order to resolve global cooperative problems or to advance objective state goals as defined by either interest group or majoritarian criteria. Contrary to these accounts, this Article suggests that an incumbent regime (or partisan elites within the regime) will often act to influence a state’s decision to embrace international legal commitments in order to overcome domestic obstacles to their ideological and electoral objectives. In this picture, an incumbent regime may strategically use international law to expand the geographical scope of political conflict across borders in order to isolate the domestic political opposition and increase the influence of foreign groups or governments sympathetic to the regime’s objectives. In the United States, however, the political opposition may in turn rely upon the fragmented system of domestic institutions to thwart the adoption and enforcement of international law that weakens its electoral and electoral objectives. Finally, this Article sketches a framework for predicting when distributive international legal commitments are likely to be sustainable across electoral cycles and when they are not. More specifically, the framework suggests that an international legal commitment is likely be more electorally sustainable when the veil of ignorance underlying the commitment is sufficiently thick; in other words, an international commitment has more staying power if it produces policy outcomes that also satisfy the preferences of some politically salient groups within the non-enacting coalition. The Article uses examples from the United States experience with international trade and human rights to illustrate how partisan dynamics between Republicans and Democrats has helped spawn and restrict the scope of international legal commitments. Supplying Compliance: Domestic Sources Trade Law and Policy in the United States – Rachel Brewster

Consider three examples of American actions to cure WTO violations:

1. In 2003, the WTO finds the American use of safeguard actions against imported steel to be a violation of the Safeguard Agreement. President George W. Bush complies by withdrawing a tariff through an executive order. 2. In 2000, the WTO finds the American tax treatment of domestic exports to be a prohibited subsidy. In 2004, Congress complies with this decision by repealing that part of the tax code. 3. In 1996, the WTO finds the U.S. ban on imported shrimp caught turtle-safe nets to be a violation of the GATT. From 1996 through 1998, the U.S. State Department cures the violation by engaging in extensive negotiations with the affected states and by revising regulation regarding traditional shrimping methods.

Questions of compliance with international law focus on the “state’s” decision to comply, yet (as the examples show) compliance often requires action from different parts of the domestic government. Although the United States – as a nation – is responsible for all violations of international law, who within the state needs to take action to cure a violation depends on the specific measure. This is particularly true with international trade law. Much attention has been given to the “demand side” – that is, how to increase the external pressure on the state to comply with WTO ruling, but less attention has been paid to the “supply side” – who within the state is responsible for the compliance. Yet this aspect is critical to understanding rates of compliance, the rate of pre-trial settlement, whether (and when) the trade retaliation is useful, and the efficacy of proposed reforms to the DSU. This work provides a framework that supplements our demand side understanding compliance with international trade law with a view from the supply side. Navigating the Maze of MFN obligations in Government Procurement Name – Kevin Gray

The international rules regarding government procurement are of contemporary interest as WTO members have increasingly introduced measures aimed at stimulating their economies. An attractive option, such as what has been used by the United States under the 2009 American Recovery Act, is to direct such spending earmarked for government contracts in a way that only suppliers who provide local goods and services can receive such contracts. Government procurement policies are also being adopted as a way to encourage domestic production, and create (government) markets for the goods and services of such producers. Despite the apparent benefits of stimulating economic growth, the discriminatory practices can run afoul of international trade obligations.

An assessment of potential violations of international government procurement obligations is complex. Government procurement commitments present a myriad of obligations set out in both the text of the agreements, as well as the annexes outlining its coverage. As the coverage varies, the result is a patchwork of obligations with some states receiving greater treatment than others.

International agreements on government procurement contain a MFN obligation. However, the reach of the MFN obligation depends on how much coverage is given by states in the agreements. Therefore, WTO members can discriminate against each other vis à vis how much access foreign suppliers can have to the government procurement market, often on the basis of reciprocity. Despite inconsistency with the trade liberalizing and non-discriminatory objectives underlining the MFN principle, the extent of how “equal” the treatment needs to be is circumscribed by the coverage a party provides in an agreement.

This paper explores the nature of the MFN obligation in bilateral and multilateral agreements. The apparent tension between what is covered procurement and the need to ensure equal treatment to all trading partners will be addressed. The unique characteristics of the MFN obligation will be explored in order to assess how WTO members can provide more favorable treatment through its market access coverage to some trading partners while still being in accordance with the MFN obligation. The Rights of Corporations under International Law – Julian Ku

In recent decades, scholars, activists, and attorneys have focused considerable attention on the duties and liabilities of business corporations imposed by public international law. In the United States, business corporations have increasingly been the targets of litigation under the Alien Tort Statute while the United Nations Secretariat has commissioned several important studies of corporate duties under international law. But while international legal duties of business corporations have drawn considerable attention, the international legal rights of those same corporations have been relatively ignored. This comparative lack of discussion is surprising because the rights and interests of business corporations are just as frequently raised in public international law disputes as their duties and liabilities. This has been especially true in the earliest investor-state arbitrations, but it has also become true in domestic litigation. Moreover, as international law increasingly treats non-state actors as subjects of international law, business corporations may also have acquired new international legal rights. For instance, business corporations as legal persons may have many if not all of the same rights enjoyed by natural persons under international human rights norms.

This article has two parts. First, it will provide a comprehensive study of the origins, development, and current status of business corporation rights under public international law. The study tentatively concludes that international tribunals have commonly assumed that business corporation rights are equivalent to natural person rights under public international law. They have thus typically recognized such equivalence under customary international law and in the context of treaties that protect individual rights. Second, the article takes issue with this assumption. It argues that this assumption of equivalence between natural and legal persons is wrong, or at least misguided, given the broader set of rights that natural persons may enjoy under public international law. Instead, business corporations should only have rights under international law when such rights are explicitly authorized through formal lawmaking processes such as international treaties or national statutes. Courts and international tribunals should therefore not grant business corporations rights under customary international law. They should also strictly interpret treaties to exclude legal persons unless the intent of the treaty’s drafters plainly indicates an intent to include them. 19 November 16:00-17:30: Panel A

International Trade, Economic Regulation and Interactions

Moderator: Mark Wu

International Trade Law Implications of the National Broadband Network – Tania Voon and Andrew Mitchell

In 2009, the Australian federal government announced plans to establish a company to build and operate a National Broadband Network (“NBN”) to deliver superfast broadband services to homes and businesses across Australia. The government will be the majority shareholder of the company, joining with private investors and ultimately selling down its interest five years after the NBN is operational. The objectives of the NBN include increasing competition and investment, improving communication speed and quality for businesses and rural Australians in particular, and raising Australia’s international ranking with respect to telecommunications indicators such as broadband take-up, accessibility of digital content, and competition in the Internet Service Provider sector. The NBN (which is in the process of implementation) and associated regulatory reforms have potentially far-reaching implications for Australia’s obligations under the World Trade Organization (“WTO”) agreements (in particular the General Agreement on Trade in Services (“GATS”)) and Australia’s free trade agreements (“FTAs”). Under GATS, Australia has made extensive national treatment and market access commitments in respect of basic telecommunications (such as mobile and fixed line voice communications) and value-added telecommunications services (such as internet content services), including incorporating in its GATS Schedule the “reference paper”. These obligations are mirrored in several of Australia’s FTAs. Australia’s NBN project has analogues in a number of other countries around the world, each at different stages of execution. This paper uses Australia’s project as a case study in assessing its compliance with WTO and FTA obligations, while reflecting on and drawing lessons from and for similar projects in other countries. Based on the various approaches to broadband worldwide, the paper also calls for a reassessment of the current GATS and FTA frameworks for imposing obligations with respect to services— particularly in classifying telecommunications—in the light of ongoing technological progress and regulatory reform. The Limits of WTO Adjudication: Is Compliance the Problem? – Juscelino F. Colares

Mainstream international trade law scholars have commented positively on the work of WTO adjudicators. This favorable view is both echoed and challenged by empirical scholarship that shows a high disparity between Complainant and Respondent success rates (Complainants win between 80 and 90 percent of the disputes). Regardless of how one interprets these results, mainstream theorists, especially legalists, believe more is to be done to strengthen the system, and they point to instances of member recalcitrance to implement rulings as a serious problem.

This article posits that such attempts to strengthen compliance are ill-advised. After discussing prior empirical analyses of WTO adjudication involving primary rights and obligations under the WTO agreements (i.e., substantive adjudication), this article expands the empirical study into compliance disputes. It finds that "enforcement" proceedings do protect the pro-free trade interests so overwhelmingly supported in substantive adjudication. Because that is the case, this article investigates the extent to which current levels of noncompliance might constitute a threat to this regime, and theorizes that the observed level is not only acceptable but a necessary feature of the system. I conclude by arguing that compliance-related issues must be viewed in a broader perspective that transcends narrow legalistic views and accounts for the multifaceted interests of, and differences among, WTO members. International Law and State Capitalism – Efraim Chaiamish

The world economy has experienced an increase in governments' participation in global markets over the past two decades. A growing amount of currency exchange reserves and profits resulting from the recent commodities boom have increased the level of participation of governments in their respective markets and abroad. The rising number of state-owned entities in many countries strengthens this phenomenon. This form of government's intervention can be implemented in many different ways. A government can subsidize its state- owned entities, provide liquidity to distressed local companies, manipulate its local currency to boost exports, or provide its national companies with a competitive advantage against foreign competitors in global markets. Governments' intervention in global private markets poses significant challenges to common practices in international law. It blurs the traditional distinction between public and private international law and between private entities as non- state actors and principles of state responsibility.

Last year's events exposed some of these dilemmas. The debt crisis in Dubai, driven by lack of transparency and government's holding of private companies, questions the ability of private banks to recover their investments in these circumstances. Also, many investments in the United States and Western Europe were made by state-owned entities from Asia and the Gulf. Several disputes between these entities and foreign corporations have raised the question what is the impact of state ownership on the ability of the state-linked entity to bring a claim against foreign entity and on dispute management and its outcome.

This paper will consider intersections between international law and state-owned entities including whether existing legal instruments, such as the International Law Commission Rules, can be effectively applied to current dilemmas with respect to sovereign commercial entities, legal procedures initiated by and against state-owned entities in international tribunals, and the potential need to adopt new rules based on recent experience with international law conventions, such as the NY Convention. The audience will gain a better understanding of the role of international law and its limitations in the state capitalism era. Law Talk v. Science Talk: The Languages of Law and Science in WTO Proceedings – Markus Wagner

The languages of law and science differ considerably in their analysis of scientific evidence. Scientific claims are by their nature tied to the conditions under which a given experiment was carried out and the protocol adhered to. In theory at least, science-based discovery processes do not lead to claims regarding a different set of circumstances from those under which a particular problem was analyzed, but rather are open-ended and progressive.

Law on the other hand operates in a binary fashion (legal v. illegal) and has—within a confined period of time—to come to a definite conclusion. This either / or result is sometimes ameliorated by the principle of proportionality or other forms of balancing. WTO law is no exception in this regard. In a considerable number of cases, panels and the AB have had to deal with the question of how to evaluate (oftentimes conflicting) scientific evidence brought forth by the parties, such as EC—Asbestos, Japan—Apples and, most recently, in EC—Biotech. The interplay between law and science is not confined to dispute settlement. The very inclusion of the SPS Agreement recognizes the interplay between scientific evidence to be taken account in the dispute settlement process of the WTO.

The question of how the two differing languages of law and science can be reconciled and how scientific uncertainty can genuinely be taken into account by the dispute settlement organs remains an open question. So far neither panels nor the AB have formulated a coherent approach to this question. In an attempt to move the debate on this question forward, a variety of approaches are examined in light of existing decisions and their respective advantages and disadvantages: this will include, inter alia, rational choice theory, precaution and process-based jurisprudence. 19 November 16:00-17:30: Panel B

Roundtable:

Fostering Collaboration in International Economic Law through Web 2.0

Moderator: Chiedhu Osakwe

Innovations in technology create a "flatworld" platform that greatly enhances the capacity of lawyers, law professors and law students to communicate globally. Interaction via Skype, Facebook, Twitter, video conference streams, wikis (such as Wetpaint or Yammer), cloud-based document-sharing facilities (such as Dropbox or Googledocs), and bespoke websites facilitate the collaborative exchange. Scholars of international economic law, researchers and policymakers have identified effective ways to use such "Web 2.0" technology to explore international economic issues while simultaneously minimizing the carbon footprint of those activities. This panel will feature presentations by persons who have used technology to promote learning in the classroom, to enable collaborative exchanges before and after conferences, to permit interactive participation during conferences for those in geographically diverse locations, and to foster international educational collaborations throughout the world. The focus of the panel will be on educational opportunities, although applications for professional interactions generally will be apparent as well.

Discussants include: Stephen Zamora, Anthony Van Duzer, Ricardo Ramirez, Thomas McDonnell, Susan Franck and Mary Rumsey. 20 November 9:00-10:30: Panel A

International Economic Law and Development

Moderator: Mariana Hernandez Crespo

South-South Trade and Investment: The Good, The Bad and The Ugly - African Perspectives – Uche Ewelukwa

South-South trade and investment is on the increase. In many quarters, south-south economic cooperation is celebrated. For Africa, experts believe that South–South cooperation can increase and diversify the continent’s sources of development finance needed to meet the 2015 Millennium Development Goals (MDGs). But, do South-South trade and investment arrangements necessary lead to win-win outcomes? Can African countries effectively maximize the benefits of South-South cooperation while minimizing potential risks? Do South-South arrangements mirror North-South arrangements and in what respects? Is the formation of trade and investment alliances with other developing countries ultimately beneficial for Africa and in what respect? This paper will engage in a critique of the initiatives, platforms, processes, institutions and arrangements designed to promote Africa-South economic cooperation. Examples will be drawn from the unfolding Sino-Africa trade and investment relations. First, the paper will examine the current patterns, scale and trends in trade and FDI between Africa and key developing countries. Second, the paper will evaluate the importance to Africa of the new South-South partnership arrangements focusing particularly on the development implications of these arrangements and the gap between projected benefits to Africa of these arrangements and the actual situation on the ground. Third, the paper will evaluate the ways African countries, individually and collectively, are struggling to manage their relationships with developing country partners. Overall, emphasis will be on the legal and development implications for Africa of the growing number of the new South-South bilateral, intraregional and interregional trade and investment arrangements that policy makers hope will yield huge development dividends and enhance the continent’s participation and integration in the world economy. The paper argues that the potential benefit to Africa of South-South cooperation may be exaggerated. As with the North-South arrangements, the new South-South trade and investment arrangements present major challenges for the African continent. Challenges such as possible deterioration of governance, human rights and environmental quality and debt unsustainability must be taken seriously and effectively addressed. The BIT Gold Rush: Emerging Voices of Dissent from the South with specific reference to the Experience of South Africa – John Baloro

This paper examines important policy questions which now confront many developing countries which for very reasons embarked on what was believed to be a “ gold rush” to attract substantial inflow of foreign investors and investments into their economies by concluding Bilateral Investment Treaties (BITS) with various capital exporting countries. On various fronts, the success of these policy choices and strategies has proved to be a mixed bag.

This has led many countries in the south to commence a process of a critical questioning of not just the processes of concluding these treaties but also their substantive content. On this basis, policy makers in some of these countries have called for a systemic and well thought through programs of review—not only for concluded BITS but also for future agreements. On the African continent, the Republic of South Africa has taken the lead in this regard. The main thrust of this paper is to critically examine the reasons for this apparent policy shift and to what extent it is desirable. It is proposed to assess its likely success and impact on the rest of the African continent and the developing world. A substantial portion of the analysis in the paper will draw on the discussion document which has been put out by the South African government through the Department of Trade and industry. The Roadmap for an ASEAN-US FTA: Legal and Geopolitical Considerations – Pasha L. Hsieh

The Association of Southeast Asian Nations (ASEAN) has become a hub of Asian regionalism because of its free trade agreements (FTAs) with major economies in the Asia-Pacific. The United States is the only power in the region that has not initiated any form of formal FTA with ASEAN. This article argues that the legal framework governing ASEAN-US trade ties should be reinvigorated and examines a roadmap for concluding an ASEAN-US FTA from legal and geopolitical perspectives.

Firstly, the article assesses the US-Singapore FTA, the ASEAN-US Trade and Investment Framework Agreement (TIFA) and US TIFAs with other ASEAN countries. It evaluates whether these agreements can serve as building blocks for an ASEAN-US FTA. To better understand obstacles to ASEAN-US trade relations, recent WTO disputes between ASEAN countries and the United States will also be examined. Secondly, the article indentifies issues that have prevented both sides from developing a regional FTA. These issues include US economic sanctions against Myanmar, the absence of the US president’s fast-track authority, and political turmoil in and between ASEAN states. Thirdly, the article proposes “Plan B” to salvage stalled ASEAN-US trade negotiations and to build a more solid foundation for a future FTA. Plan B aims to conclude an “enhanced TIFA,” modeled on ASEAN’s framework agreements with its trading partners. The article analyzes existing framework agreements and explores how this TIFA can be complementary to the Trans-Pacific Strategic Economic Partnership Agreement. Fourthly, the article discusses commercial and political interests of US economic integration with ASEAN. For instance, active US engagement would help ASEAN achieve its objectives of the ASEAN Economic Community, increase ASEAN’s leverage over Myanmar and maintain US regional influence in the backdrop of China’s rise. The article concludes by outlining legal and policy recommendations for the United States and ASEAN. Liberalizing Labour Mobility through Regional Trade Agreements: the Experience of China – Chunbao Liu

This paper seeks to analyze the approaches employed to liberalize international labor mobility under regional trade agreements (RTAs) based on the experience of China. In a globalizing world, we see dramatic improvement in the construction of multilateral regimes to promote international movement of goods, services and capital, but little progress on liberalization of labor mobility. GATS is currently the only multilateral framework providing a structure that states may use to negotiate commitments on movement of natural persons. However, the commitments under GATS have so far been quite limited, partly due to political and conceptual barriers.

We also witnessed a proliferation of RTAs with the primary purpose of advancing trade liberalization in the past two decades. Countries with a strong comparative advantage in labor resource, such as China, are provided with an excellent opportunity to request liberalization of labor with offers of liberalization in other fields in the more controlled context of RTA negotiations.

The study found that labor mobility provisions in Chinese RTAs are formulated in a wide variety of ways. Some are closely modeled after GATS and confined to temporary move of people though whose presence services are provided. Some extend to disciplines on domestic immigration regulations. There are also RTAs covering the temporary entry of employment market and licensing and qualification systems. The differing approaches adopted by China to labor mobility reflect a range of factors, including the degree of geographical proximity of the parties, as well as economic and political ties. These findings suggest that RTAs are unlikely to provide a stepping-stone towards a multilateral system for labor mobility. They also shed some light on the ongoing debate of how the rise of China will influence the governance of international economy. 20 November 9:00-10:30: Panel B

International Standard Setting

Moderator: Brad Karkainnen

Competition and Coordination Among Transnational Non-Governmental Regulatory Programs – Errol Meidinger

“ Private” regulatory programs are playing a growing role in transnational governance across many sectors and problems, including carbon control, green building, finance, food, forestry, labor rights, mining, and many others. This appears to be occurring in part because of the advantages non-governmental organizations have in initially negotiating and implementing transnational standards. Less noticed and analyzed is the tendency for multiple programs to be active in individual regulatory arenas. These programs tend to compete vigorously with each other, and sometimes with government agencies, but also to imitate and coordinate with each other to a remarkable degree.

Understanding the dynamics of these inter-program relationships will be crucial to assessing the current and potential roles of non-governmental regulatory organizations in emerging transnational governance institutions. This paper describes competition and coordination processes in forest sustainability and food safety regulation and then reviews a variety of theoretical approaches to understanding those dynamics. Consultation and Legitimacy in Transnational Standard-Setting – Caroline Bradley

The recent financial crisis has generated agreement on the need for new transnational standards for financial regulation. When governments work together to develop transnational standards and rules they do so using processes which are not uniform, which often seem to develop in an ad hoc manner, and which do not necessarily reflect any particular conception of good government. Transnational standard setters have responded to critiques of the legitimacy of their role by emphasizing consultation of stakeholders.

The article will compare the uses of consultation in the development of policy at the national and supranational levels. It will examine the weaknesses in the construction of transnational consultations that undermine their value as mechanisms of legitimation. For example, transnational consultations lack visibility, they are usually carried out in a limited number of languages, or even only in English. More fundamentally, the article will critique the stakeholder focus of transnational consultations. In practice the identification of stakeholders who are potential respondents to consultations seems to imply that there may be others (non- stakeholders) whose views are less important. As the financial crisis has shown, it is not only those who consider themselves to be stakeholders in financial regulation who are affected by its failures. The interaction of private international standards regimes with public law – Janelle Diller

By September 2010, the result of the world-wide vote on a proposed ISO Standard on social responsibility will be announced and is expected to be affirmative. The five-year process leading to the vote represents a first-time experiment for ISO, an organization better known for its technical standards and its 9000 series on quality assurance. ISO’s avowed aim is to develop standards, many of which are intended for certification, as an engine to facilitate trade and business initiatives worldwide. ISO’s non-governmental network of standards institutes rivals the UN’s own membership in scope and operates as an autonomous system for industry self- regulation. The wide swath of ISO standards affect issues within public governance domains, from trade and investment policies to human rights and development efforts.

While the actors and processes of public institutions must heed, to some public satisfaction, criteria for legitimacy of representation and accountability for due process and results, ISO’s global standards operations have already faced criticism for deficiencies in this regard, particularly as more recently developed standards tackle issues at the intersection of social and economic governance, such as ISO 13000 series on environmental management.

This paper sets forth an account of the search for legitimacy and accountability in the processes leading to the proposed 26000 standard which cross-cuts established areas of public international law. The interaction of the private regime with the public mandates of international institutions in social and economic governance is highlighted, with a special focus on international labor standards and ongoing cooperation with the International Labour Organization (ILO). Analyzing the process and results thus far, the paper draws lessons for the future, marking potential for conflict between public and private regimes, and possible policy and regulatory responses at national and international levels that could encourage complementarity while minimizing the difficulties presented. The ICN at 10: What’s Next? – William E. Kovacic & Hugh M. Hollman

The International Competition Network (“ICN”) was formed in 2001 by twelve competition agencies. Today, 112 competition enforcement agencies in 99 jurisdictions are members of the ICN, and next year will be the start of the network’s second decade. This offers an appropriate juncture to look back at the ICN’s achievements, consider why the ICN is successful, and to ask the question: What’s next?

The ICN’s core strategy is convergence. The underlying concept is that as competition systems around the world become more similar and more effective in addressing anti-competitive effects, the result will be the dissolution of competitive restraints within and between countries and global markets. The ICN has successfully followed this strategy and there is a demonstrable increase in competition law convergence. But the fact that two or more countries have similar competition law systems does not necessarily reduce the probability that each will take into account different policy factors despite the substantial similarity of their laws. For example, competition officials may consider policy considerations that do not necessarily lead to the maximizing of competition such as the protection of what are perceived to be strategic industries.

Multinational and regional agreements may address shortcomings associated with a policy of convergence. The paper considers past attempts to form a multinational competition agreement, as well as existing regional and bilateral agreements with competition provisions. Such agreements may create shared interests and lead to greater incentives for states to clarify the meaning of their obligations to cooperate. In addition, regional or multinational agreements could provide a mechanism for reducing and resolving conflicts.

We plan to analyze whether laying the groundwork for multinational or regional agreements is the appropriate strategic direction for the ICN. We will examine why the ICN has a comparative advantage over other networks and could facilitate the formation of such agreements. By providing this analysis, it is our hope that our paper could serve as a possible roadmap for the development of these objectives within the ICN and offer strategic direction for the ICN’s second decade. 20 November 10:45-12:15: Panel A

International Investment Law: Investment Treaties and Dispute Resolution

Moderator: Michael Tracton

Do Bilateral Investment Treaties Promote Foreign Direct Investment? Some Hints from Alternative Evidence – Jason Yackee

This paper presents a multi-method examination of whether bilateral investment treaties, or BITs, are likely to promote inflows of foreign direct investment. Using regression analysis, the paper shows that BITs are not meaningfully correlated with measures of political risk. Using survey evidence, I show that providers of political risk insurance do not reliably take BITs into account when deciding the terms of insurance. Nor do in-house counsel in large U.S. corporations view BITs as playing a major role in their companies’ foreign investment decisions. In contrast to existing empirical studies, which claim to prove that BITs can have massive positive impacts on FDI, my results suggest that such results may be spurious. BITs seem unlikely to be a significant driver of foreign investment. My results have implications for the important academic debate concerning the ability of legal reforms to promote economic growth and development. The article’s conclusion is relatively pessimistic: BITs don’t appear to provide developing countries with an easy way of promoting foreign investment, in large part because investors don’t seem to pay much attention to the treaties. This conclusion is in line with an earlier generation of “law and society” research that finds that legal considerations are often of surprisingly little importance to foreign investment decisions. Dispute Systems and Procedural Justice – Andrea Schneider and Nancy Welsh

In international investment treaty disputes, there can be an uncomfortable intersection among international economic law, domestic law (both public and private) and domestic politics. In the past, these sorts of disputes led to clashes between nations, known euphemistically as “gunboat diplomacy.” Today, states and investors rely on the peaceful method of arbitration to resolves disputes. But both states and investors are now raising concerns about the costs, delay and political challenges associated with relying on the rights-based arbitral process and its outcomes. Commentators and stakeholders thus are now beginning to urge a focus on various measures to prevent disputes and, once disputes arise, greater use of consensual, interest- based procedures such as mediation. Some stakeholders and commentators have even begun advocating for a requirement of good-faith participation in mediation prior to the commencement of arbitration. On the other hand, some commentators criticize mediation as unworkable politically or legally in the investment treaty context.

This paper will examine the current proposal to use mediation in international investment treaty disputes from two, related perspectives—applying the theoretical framework of dispute system design and considering the empirical evidence that has emerged from domestic courts’ and agencies’ experience in the U.S. and Canada. Ultimately, we hope to make recommendations to guide stakeholders’ considerations. Foreign Investors’ Right of Access to International Justice vs. State Immunity From Execution – Alexandra Koutoglidou

Individual access to justice as a human right remains problematic in almost all fields of international law with the exception of international investment law. Bilateral and multilateral investment treaties enshrine the foreign investor’s right to adjudicate claims against the host State before an international arbitral tribunal, which has the authority to pronounce the liability of the State under international law, as well as its obligation to compensate the foreign investor. In addition, the current network of multilateral treaties and national laws render the arbitral award enforceable and executable in multiple national jurisdictions. Therefore, the foreign investor, being the prevailing party, is entitled to collect on his award and, when he cannot, to bring judicial pressure in order to compel compensation. It is the promise of such award that renders investment treaty arbitration so appealing.

Nevertheless, a State’s consent to arbitration waives jurisdictional immunity but it does not waive immunity from execution proceedings. In this sense, State immunity defense has the potential to significantly undermine the rationale that underpins the inclusion of arbitration clauses in investment treaties. Even more so since the actual execution of an arbitral award is subject to the laws, including those on State immunity, of the State in which execution is sought. By looking into the often conflicting jurisprudence of national courts on the State immunity defense (I), the present study will explore whether a comprehensively established right of access to international justice for foreign investors actually exists or whether State immunity from execution as “the last fortress, the last bastion of State immunity” hinders the enforcement of arbitral awards, thus canceling out the expectations of foreign investors for an effective and final satisfaction of their claims against a sovereign State (II). The Increasing Influence of Soft Law in International Disputes – R. Doak Bishop and Ben Love

Some years ago, the notion of soft law began its rise to prominence in the international legal lexicon. With the term, international lawyers and academics sought to describe the phenomenon of international norms that often perform the same function as legal norms while being devoid of one or more of the fundamental characteristics necessary to constitute an actual legal norm. Although the presence of what Professor Michael Reisman has labeled the “pathological phenomenon” of soft law has increased in the decisions of international courts and tribunals (as well as national courts) entertaining issues of international and transnational law, little has been done in legal scholarship to provide a current and accurate description of the use of soft law in international disputes.

In response to this gap in the literature, this paper examines the growing influence of soft law in international disputes through three different lenses: (i) the use of procedural soft law of international disputes (e.g., codes and guidelines on ethics, evidence, and procedure); (ii) international courts and tribunals’ use of soft law instruments as representative of substantive rules of public and private international law (e.g., ILC Articles on State Responsibility, UNIDROIT Principles of Contract Law, etc.); and (iii) soft law instruments influencing the practice of courts with respect to international law (e.g., commentaries and guidelines on the application of international treaties and agreements). In analyzing these three modes of applying soft law norms, the authors also attempt to convey a sense of how legal practitioners, as opposed to legal theorists, view and use soft law norms in actual cases. 20 November 10:45-12:15: Panel B

International Economic Law, Climate Change and Responsibility to Protect

Moderator: Oren Gross

The Perils of Incrementalism in Solving Climate Change – Anu Bradford & Travis Bradford

Over the past two decades, doubts about the seriousness and urgency of climate change have been replaced by discussions of the most effective mechanisms to respond to the challenge it presents. It is now broadly understood that climate change requires a swift, meaningful, and coordinated global response. Due the difficulty in achieving a post-Kyoto agreement that is both sufficiently broad (including most emitters) and deep (creating meaningful changes in behavior), most stakeholders have evoked the language of incrementalism. Their argument relies on a notion that even a weak agreement is better than no agreement; and that small advances made today could gradually evolve into a comprehensive treaty regime over time.

This paper challenges whether the incrementalist approach is the most effective method of solving the problem of global climate change. We argue that most observers perceive a lack of an explicit price for carbon today and fail to recognize a very real and compelling implicit carbon price facing economic agents when making long-dated production and capital allocation decisions. The mistaken belief that buyers and funders of polluting capital assets are ignorant of the probability-weighted future price of carbon leads to the conclusion that any certain price today is better than no price. We further argue that any politically feasible price for carbon that could be locked in today through binding international treaty would inevitably be lower than the expected (implicit) carbon price perceived by corporations acting under uncertainty. International treaty-making is undermined by deep distributional tensions and concerns over the cost of action. As such, today's negotiations would unavoidably produce a treaty that would reflect a watered-down compromise where the price of carbon would be a function of the lowest common denominator among parties. This would move efforts backwards rather than forward (i.e. reducing the expected price of carbon) from the status quo. Instead, we assert that until an optimal treaty can be negotiated, our faith in international law and institutions is likely misplaced, and that relying on agents’ self-interest would be a more effective choice. Resurrecting the Dead? The Expired Non-Actionable Subsidies and the Lingering Question of "Green Space" – Sadeq Z. Bigdeli

Numerous commentators have called for reinstating such provisions as the ones envisaged in Part IV of the SCM Agreement (“Non-actionable subsidies”) to provide a safe haven for certain environmental subsidies such as those for renewable energy or for climate change mitigation or adaptation. Current proposals in Doha (such as the one put forward by Venezuela) do not seem to have a prospect of reviving this so-called green light category. In light of the negotiation history and the untold stories of birth and the premature lapse of the Non-actionable subsidies, the paper argues that pursuing the existing approaches in this expired category will hardly bear any fruits for countries who may wish to seek exemption for their alleged “climate subsidies.” Rather than reviving the green light, the paper explores two solutions for the current problem of the vulnerability of climate subsidies in the WTO.

First, the judicial solution may lead to a finding of the applicability of GATT Art. XX to the SCM Agreement. Although the paper does not advocate for such an approach due to the implicit intent of negotiators to keep out GATT XX exceptions in respect of subsidy disputes, it traces relevant WTO jurisprudence in which such a finding may realistically be made. Assuming arguendo that GATT Art. XX applies to the ASCM, the paper examines the extent to which GATT Art. (b) and/or (g) could save subsidies the granting of which leads to reduction of greenhouse gases (allegedly “green” subsidies) as well as the extent to which GATT XX chapeau could prevent abuse. Second, the paper explores political solutions as a preferred venue for resolving the trade-climate conflict in the area of subsidies. The pros and cons of each venue will be analyzed critically. Reassessing International Economic Law in Light of the Responsibility to Project – Krista Nadakavukaren Schefer

This paper examines the implications of a Responsibility to Protect on the international economic law (IEL) system to explore how IEL interacts with other legal systems and investigating how changing ideas of international community might influence what is expected of economic policies.

The concept of a Responsibility to Protect (R2P) set out in the UN Secretary- General’s “A More Secure World” report is a programmatic statement to end gross violations of human rights and humanitarian law. Beyond a mere right to intervene, R2P is characterized by an imposition of a duty on states to protect all populations from harm. Several aspects of R2P make it evolutionary for international law: first, R2P ignores traditional ideas about jurisdiction, demanding the protection of populations both at home and abroad; second, R2P emphasizes state action rather than restraint; and finally, R2P aims to ensure “human security” rather than limiting itself to the physical safety of communities. While explicit support for R2P remains soft law, international law reveals several areas where R2P-like duties exist. The potential for R2P to change how states view their relationship to the international community is therefore already being realized.

Beyond the obvious implications of R2P for the humanitarian and human rights legal regimes, the concept has significant potential for altering the international economic law system. This paper would discuss the scope and development of R2P as well as its potentials for altering the IEL system, including suggesting that the call to ensure “human security” through positive duties may require trade and investment relations between countries to take extra-economic considerations into account and could even require the use of economic sanctions against states that refuse to protect their populations. Extraterritorial social and environmental concerns and trade: pathways to conflict between the WTO and EU – Jessica Lawrence, Gareth Davies and Laurens Ankersmit

Jurisdictions are increasingly concerned to incorporate concerns about extra-jurisdictional environmental and social harm into their economic and trade policy. The way they do this, and the extent to which they do this, are steered by the way concerns are framed and presented in legal debate, and also by the allocation of powers and competences within the jurisdiction. We see within the institutions and legal texts of the EU an increasing trend towards the integration of economic and non-economic policy, and the framing of global problems in the language of universality, and therefore as legitimate local concerns. Correspondingly, the European trend is towards using production-harm arguments in an ever more explicit and developed way to set constraints on trade. The EU’s recent decision to outlaw the import into Europe of illegally cut wood is an example, as are the socio-environmental procurement and tax policies applied or under development in several Member States.

The WTO, by contrast, with a different and narrower remit than the EU, and a lack of legislative power, has shown no enthusiasm for the presentation of extra-jurisdictional harm as fundamentally different from local harm. This leaves the legal door unclosed, but nevertheless hints at a narrower view of the legitimate concerns of individual Member States, a reluctance to expand the conceptual basis for restrictions on trade, and a greater skepticism about trade- based global socio-environmental intervention.

This paper asks whether the diverging conceptual frameworks of the EU and WTO, one emphasizing both the specialness and the importance of extraterritorial measures, one avoiding this, will lead to conflict, either in a narrowly legal sense, or a broader ideational one. It looks at the development of PPM, global environmental, and extraterritorial rhetoric in both contexts, and the legal results of these debates. 20 November 14:15-16:00: Panel A

International Economic Law and Climate Change

Moderator: Petros C. Mavroidis

Tuna-Dolphin Revisited: Transnational Governance Implications for Trade Regulation in the Context of Climate Change Policy – Elizabeth Trujillo

The relationship between trade and the environment is a tenuous one. Supporters of free trade and environmentalists seem to regard each other as the obstacle to development, and both sides have very different views as to what constitutes development. This paper resurrects the trade and environment dialogue through the recent United States—Tuna/Dolphin case brought by Mexico against the United States. It revisits the issues raised in Tuna-Dolphin I & II as well as the United States—Shrimp case and proposes that Tuna-Dolphin III provides an opportunity to highlight the intersection of trade and climate change in the context of eco- labeling schemes.

The objective of this piece is to consider whether the WTO can be a tool to facilitate environmental policy on the ground. By reconceptualizing the WTO from a regulatory (top- down) model of governance to a hybrid model (that is both top-down and bottom up), international trade adjudication is better positioned to deal with regulatory policy. This hybrid model better comports with the private and public partnerships in regulation being formed on the ground and offers a more dialogical approach to adjudicating trade matters concerning environmental policy. In this way, the WTO may be seen as part of a system of transnational governance rather than an independent (and omniscient) adjudicator of trade that is part of an international system separate from the domestic. More specifically, this paper will consider whether the most recent Tuna Dolphin III case provides insights into a this more dialogical approach of the WTO adjudicatory system which in turn, could contribute to more cohesiveness among multilateral and regional trade regimes and enhanced discourse among regulators and free traders. The Unbreakable Heaviness of Economic Interests in Shaping Climate Law: The Case of India's Civilian Nuclear Program – Deepa Badrinarayana

Economic liberalization and multilateral investment has reinvigorated global economic growth. Consequently, it has also contributed to increased environmental risks such as climate change, which cannot be resolved unless states device a mitigation strategy that does not compromise their economic ambitions. This resulting Gordian knot is formed primarily because of the economic disparity among nations, which not only affects a state’s ability to cater to its domestic welfare, but also its international political clout. Divestment from energy-related industries could paralyze major economies and inhibit returns on investment in short-term alternative energies. Nuclear energy is a case in point as an energy alternative that does not necessarily promote better environmental policy or mitigate climate change as it may instead increase the risk of environmental and social welfare harms. Neither current international economic regulation nor the international environmental regime addresses the increased environmental and social welfare risk. This problem is exacerbated by the absence of a coherent international governance mechanism for assessing the environmental consequences of alternative energy in a holistic, long-term manner. Rather than measuring environmental and health risks, nuclear liability law focuses on promoting investments in nuclear energy and demonstrates how fragmented legal and policy can widen the chasm between economic and environmental interest.

This paper focuses on these issues by considering international and domestic forces shaping India’s civilian nuclear energy policy. It considers the international and U.S. nuclear liability regime that has influenced India’s proposed nuclear liability law and also examines how economic and environmental welfare factors have influenced the discussion. Without providing a unitary solution to the fragmented problem, the paper suggests that identifying environmental and social welfare mechanisms can narrow the chasm and integrate critical factors in the debate about the proper regulatory framework for energy alternatives and general environmental issues. Finally, the paper considers whether less formal efforts such as the Calvert principles on social investment, can serve as the basis for formulating an authoritative framework for informing the de-fragmentation of international economic and environmental laws. Priability Rules: Using the WTO Framework to enhance U.S.-India Cooperation on Clean Energy Technology – Jonathan Zasloff

This paper explores the future of U.S.-India climate diplomacy and proposes a form of compulsory licensing under TRIPS for Climate Friendly Technology, in which western patent rights are protected through a liability rule rather than a property rule. Scholars have fiercely debated whether protecting patents through property or liability rules best satisfied the goals of any intellectual property regime, and I hardly claim to settle the controversy. The paper argues that liability rules can, in many circumstances, best satisfy our goals for climate policy, given the political constraints facing the area.

The paper proposes an institutional mechanism for achieving this sort of intellectual property protection: the US-India Climate Dialogue, an informal institution announced by President Obama and Prime Minister Singh on the eve of the Copenhagen parlay but which has remained essentially dormant since then. It is not simply that the Dialogue provides a convenient venue. Rather, the presence of American governmental negotiating can offer India a crucial incentive in the pricing and administration of any compulsory license. Because only states can bring cases under WTO law, the United States can offer to refrain from bringing a trade violation case if India agrees to reasonable royalties. I discuss why this results will not likely arise from bargaining between private parties, and propose that this new framework gives rise to what I call a "priability rule" - a rule that combines elements of traditional property and liability rules. The BP Deepwater Horizon Oil Spill and Transnational Governance: Addressing Fragmentation and Overlap at the Intersection of Economic and Environmental Law – Hari M. Osofsky

The BP Deepwater Horizon Oil Spill raises complex, multiscalar issues at the intersection of economic and environmental law. The push to drill ever deeper arises from an economy that depends deeply on oil and a desire to move away from a reliance on foreign oil. Although concerns about climate change have created pressure to rely less upon fossil fuels, that transition is not likely in the near-term. Even as the spill revealed the extent to which deepwater drilling pushes the limits of our technological capabilities, the push to end the moratorium and resume deepwater drilling was strong, especially from Louisiana, a state deeply dependent on oil for its economy but facing some of the most significant environmental impacts from the spill. When the Obama administration ended the moratorium, but still limited drilling through a more stringent regulatory regime, both environmentalists and oil industry advocates complained.

Substantively, two primary legal regimes apply to the BP Deepwater Horizon disaster: the one governing offshore activities and the one governing oil spills. Both of these have transnational dimensions and intersect with regulatory regimes at multiple levels of governance. This paper explores the simultaneous difficulties of overlap and fragmentation raised by the spill and initial regulatory response to consider how economics and environmental protection can be reconciled more effectively and fairly. It engages the environmental injustice highlighted by the spill and response, and the limits of international economic and trade law’s ability to prevent this spill or others in the future. The paper argues that these aspects of the BP Deepwater Horizon Oil Spill provide opportunities for creative, multidimensional regulatory approaches that incorporate both the economics of oil production and the need for better protection of the environment and vulnerable populations. 20 November 14:15-16:00: Panel B

Trade, Human Rights, Technology and Jurisdiction

Moderator: Ruth Okediji

Unity in Diversity? Cultural Diversity Disputes and the Judicial Function in International Economic Law – Valentina S. Vadi

In recent years, cultural heritage law and international economic law have increasingly intersected. The disparity between the two fields of law has made their interaction particularly uneven. Cultural heritage law only emerged after WWII in a piecemeal fashion, through a series of international conventions and the formation of customs. Because this branch of law is still in its infancy, it presents embryonic features and lacks a dispute settlement mechanism. By contrast, international economic law constitutes an ancient part of public international law and a highly regulated area of international relations and offers a sophisticated means of dispute settlement that have produced a growing body of case law.

This paper explores and critically assesses the recent case law adjudicated by arbitral tribunals on the interplay between cultural diversity and international investment law. While other studies have analyzed the interplay between international trade law and cultural diversity protection from an institutional perspective, by focusing on treaty law and/or the historical articulation of the dichotomy between trade and culture, this paper adopts a socio-legal approach, by focusing on the role that adjudicators have played in mapping the interactions between two different sets of norms. This scrutiny may contribute to the current debate on the unity or fragmentation of international law.

This study will proceed as follows. First, the multifaceted concept of cultural diversity will be defined and the main tenets of the relevant UNESCO instruments will be scrutinized. Second, the main characteristics of investor-state arbitration shall be scrutinized. Third, the conflict areas between international investment law and cultural heritage law will be investigated through the analysis of some relevant case studies. Fourth, this contribution critically assesses the role that arbitrators play in adjudicating interdisciplinary disputes. Finally, some conclusions will be drawn. Searching for the Missing Link: Trade, Censorship and Human Rights in the Digital Era – Henry Gao

For a long time trade law and human rights scholars have debated the relationship between the two, and the latest Google episode in China provided yet another chance to revisit the debate. Compared to previous cases, this case is even more intriguing for the following reasons: First, unlike previous cases, which are mostly about the WTO-consistency of trade sanctions adopted in response to alleged human rights violations, the current one is a rare case in which the possibility of directly using trade law to challenge the legality of national measures which are regarded as much as a trade law issue as a human rights issue. Second, in most of the previous cases the alleged human rights violations affect almost exclusively only domestic individuals or firms, but in the current case the foreign firms are affected as much as, if not more than, the domestic firms. Third, most of the potential legal claims in the current case arise under the GATS, rather than the GATT as in most previous cases. Fourth, the main services at issue are those that start to be supplied only since the dawn of the digital age, and it is highly unlikely that these services were even contemplated when the GATS rules were negotiated. All in all, these unique features make this case an interesting and challenging case study on the relationship between trade and human rights in the digital era. This paper considers the implications of this intersection for the WTO system.

Considering how the Chinese government employs control over both domestic and foreign internet service providers, the article addresses the merits of a WTO challenge. First, it ascertains the service sector or subsectors that might be at issue. Second, the paper explores the scope of China’s commitments in identified sectors, as well limitations or restrictions inscribed on such commitments. Third, it explores whether Goggle and other foreign service suppliers provide “like services” as those of their domestic counterparts, and whether the Chinese measures would result in breaches of these commitments. Fourth, the paper discusses any exceptions (such as public morals) that China could invoke and the potential use of human rights norms in WTO litigation. The paper concludes by suggesting practical actions and the systemic implications for the WTO as a whole. Pushing the Limit of Global Governance: Trading Rights and Political Censorship – A Commentary on the China-Publications Case – Julia Quin

In January 2010, the WTO Dispute Settlement Body adopted the Panel report, as modified by the Appellate Body report, in China – Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products (DS363). The reports found, inter alia, that China’s measures prohibiting private and foreign entities from engaging in the importation of cultural products is inconsistent with China’s trading rights commitments under its Accession Protocol, and cannot be justified by the public moral exception under the GATT.

The result of this WTO decision is no small matter for China. Although the decision does not ask China to change its censorship criteria substantively, it nonetheless requires China to restructure its censorship regime concerning the importation of cultural products. Currently, censorship for imports is conducted primarily through trusted state-owned enterprises (SOEs). Inherently nontransparent, the SOE operations ensure that concrete censorship criteria are kept secretive and unpredictable, which is deemed essential for preserving the maximum level of flexibility and efficacy in censorship desired by the Communist Party. Now that the WTO has declared this practice WTO-illegal, it has effectively challenged the Communist Party to change its decades-old strategy and replace it with a more market-oriented and less opaque censorship regime.

By rendering such a decision in the sensitive political domain, the WTO judiciary has pushed global governance to a new level. In this sense, the decision reinforces the paradigm shift in WTO governance from the traditional model that focuses on protectionism to a new one that mandates convergence in domestic governance norms. This paper will provide a commentary on this landmark decision. It will discuss the potential implications of this decision for China, as well as for WTO governance. Furthermore, it will provide a critical review of the Panel and AB reports, which have broken new ground in WTO jurisprudence.

Extraterritoriality of Intellectual Property Law in an Era of Globalization: The Doctrine of Manufacturing Fiction” and Goods in Transit – Shashank P. Kumar & Meghana Sharafudeen

As the dominance of industrialized nations in innovation and technological advantage has come to be challenged by emerging economic powers, higher levels of intellectual property (IP) protection have been seen by them as an important means to maintain their competitive advantage. The national laws of several industrialized nations have moved towards explicitly recognizing the provision of the highest level of IP protection as an end in itself. At the international level, such nations have actively promoted the “maximalist” agenda through multilateral and bilateral means of harmonizing IP protection, and by applying their national IP laws (containing greater protection) extraterritorially. This work seeks to study the latter instance of unilateral efforts at promoting “IP maximalism” by looking at the specific case of application of national IP laws to goods in transit.

After noting the instances of such application, we seek to analyze the doctrine of “manufacturing fiction” as the legal justification for such action. Under this doctrine, goods in transit are deemed to have been produced in the country of transit for the purposes of establishing infringement. The analysis begins with a survey on the adoption of this doctrine by various national jurisdictions and international organizations, highlighting its contemporary relevance. It then discusses the mechanism by which such a doctrine operates and is effectuated, and its consistency with principles of IP law (including, inter alia, the territoriality of rights, and the bundle of rights), and international law (including, inter alia, WTO law). The work concludes by noting: (i) the effects of the doctrine of “manufacturing fiction” specifically, and the extraterritorial application of IP laws generally, on international trade and economic relations in a globalizing world; (ii) the implications of such application for the international IP regime, and; (iii) a caveat against the use of such unilateral measures. Law in the Cloud – Anupam Chander

Is there law in the cloud? Does the move to cloud computing, with our data and the programs in undisclosed remote locations, spell the death of law? Following up on concepts introduced in “Trade 2.0”, I will investigate whether the cloud should be divested of law, and then turn to the question of what law should apply. I will review a variety of possible approaches to choosing law for the cloud.

Is there law in the cloud? Does the move to cloud computing, with our data and the programs in undisclosed remote locations, spell the death of law? Should we cheer that possibility, replacing law with the contract supplied by a chosen cloud service provider? Providers of cloud services often seek to avoid the application of any foreign law, purporting to restrict the consumer to the law of the service provider's home jurisdiction. I will argue to the contrary-- that the move to the cloud should not require us to yield our passports. Distant system operators should be subject to law. Any other approach would sacrifice consumer protection at the altar of corporate freedom.

But what law should govern? Should it be the law where the server is located, the law where the cloud business is headquartered, the law where the cloud business is incorporated, or the law where the consumer is located? Or some combination of the above? I will consider a number of early cases involving cloud computing (though they have not been understood as such) and work both inductively and deductively towards an answer to the prescriptive jurisdiction question. I will review a variety of possible approaches to choosing law for the cloud, considering both European and American initiatives. Finding the proper regulator or regulators will require a balance between the demands of efficiency and the demands of justice.

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