Tag Archive | "international trade"

NAFTA’s failure could create an immigration crisis in the United States

Source: Farm Futures

Source: Farm Futures

Although the controversy surrounding the North Atlantic Free Trade Agreement (NAFTA) typically revolves around jobs and trade, NAFTA impacts more than just trade relations; it also has a major influence on immigration patterns in the United States. President Trump threatened to include immigration control as part of NAFTA re-negotiations when he recently tweeted “[t]hey must stop the big drug and people flows, or I will stop their cash cow, NAFTA.”[1] Although Trump’s statements on NAFTA and immigration are making headlines, relying on Mexico to help curb immigration flow is nothing new. Mexico has been assisting the United States’ for decades and assistance only increased after NAFTA entered into force in 1994. In the past, the U.S. often seemed to have the upper hand in its immigration agreements with Mexico, however, with the recent developments over NAFTA, this may be changing.

Though its effectiveness is hotly debated, NAFTA did improve the economies of the United States, Canada, and Mexico; Mexico’s economy was particularly boosted.[2] From this arose a relationship of mutual reliance on the part of both Mexico and the United States. Mexico’s economic reliance on the United States put it in a position where it is often expected to alter its immigration laws and border policies at the request of the United States. In turn, as the United States has continued to ask for Mexico’s cooperation; it has become increasingly reliant on Mexico to assist in reducing the number of migrants coming to the United States’ southern border. In particular, the recent mass migration of Central American migrants exemplifies how the United States’ role as the dominant economic power in the region impacts Mexico’s immigration laws and policies.

Past Mexico – United States relations

The passage of NAFTA liberalized Mexico’s trade with the United States and Canada, and provided a significant boost to its economy.[3] In addition to opening its borders to trade, Mexico began cooperating with the United States more on border security.[4] For example, in 1997, in exchange for economic aid, Mexico worked with the United States to warn migrants of the dangers of smuggling and border crossing in Operation Gatekeeper III.[5] In 2007, another joint operation, La Merída, focused efforts on drug trafficking rather than on human smuggling.[6]

In 2014, the number of unaccompanied minors and families arriving at the United States’ southern border surged, the majority of whom were from El Salvador, Guatemala, and Honduras.[7] Fleeing extreme poverty or gang violence, the number of unaccompanied minors increased by 77% with 38,759 arrivals in 2013 compared to 68,541 in 2014.[8] For families, the number surged 361%, with 14,855 apprehended in 2013 to 68,445 in 2014.[9] For the most part, those arriving were fleeing from extreme poverty or gang violence.[10] President Barack Obama described the event as a humanitarian crisis.[11]

In response to this crisis, President Obama negotiated a deal with the Mexican government to help strengthen its border in an attempt to prevent migrants from reaching the United States. The result was the implementation of Programa Fontera Sur (Southern Border Program), which is in part financed by the United States.[12] Prior to the program’s implementation, security was uneven along Mexico’s southern border.[13] Along some parts of the border there was a high tolerance for those crossing into Mexico, both temporary visitors, but also for those passing through on their way to the United States; other sections, however, were significantly more secure.[14] With the implementation of Programa Frontera Sur, Mexico’s southern border security radically changed. Mexico became an immigration “enforcer” for the United States, stepping up detentions and deportations significantly.[15] For example, Mexico increased its deportation of migrants by 35% from 2013 to 2014.[16] This included 18,169 children in 2014, a 117% increase from the number of children deported in 2013.[17] Meanwhile, the number of apprehensions and deportations at the United States’ border substantially decreased.[18]

The program is unpopular in Mexico and has been condemned internationally. Mexican scholar and activist Sergio Aguayo, told NPR that “We are now the servants of the U.S. in this role.”[19] Mexico’s significant increase in deportations is also criticized as being hypocritical.[20] Further, the program has also been criticized for human rights abuses, as well as the criminalization of migrants.[21]

Outsourcing border control is not uncommon and developed countries are increasingly relying on less developed, transit states for border control.[22] However, the relationship between the United States and Mexico is distrustful, and should not be equated to similar a structure within the European Union, which has moved beyond using merely economic interests.[23]

Power dynamics and the liberal paradox

But why is Mexico helping the United States given the controversy and criticism? The answer is multifaceted. First, the United States has been the dominant power in the region, if not the world, for years.[24] As such, it typically enjoys a fairly high level of power over other states, as is the case with Mexico. Part of the United States’ strength is its stability, predictability, and involvement in multilateral agreements.[25] The United States’ stability and reliability as the dominant power, combined with the economic growth that Mexico enjoyed under NAFTA meant that it was in Mexico’s best interest to the United States “dirty work.”[26]

Further, Mexico’s economic reliance on its more powerful neighbor makes Mexico more likely to cooperate, even when it is not in full agreement. Of particular importance is the improvement in Mexico’s economy due to NAFTA as well as Mexico’s heavy reliance on remittances. Nearly 12 million Mexican immigrants were living in the United States in 2014.[27] That year, remittances from the United States brought in 24 billion USD, 2% percent of Mexico’s GDP.[28] James Hollifield points out that developing states are reluctant to “provoke a conflict with a receiving state . . . for fear of losing remittances.”[29] Not cooperating with the United States could risk not only Mexico’s economic ties with the United States, but also the ability of Mexico’s citizens to stay in the United States and send back remittances.

This economic reliance requires that Mexico cooperate due to the existence of a “liberal paradox” within the United States.  Hollifield describes the liberal paradox: “the economic logic of liberalism is one of openness, but the political and legal logic is one of closure.”[30] In part, this is because migration poses a risk to a state’s sovereignty.[31] Thus, a migration state, caught in this liberal paradox, is one that opens or closes its borders for the benefit of the state, rather than to benefit the migrant.[32]

This fear over loss of sovereignty was readily apparent during the 2014 migrant crisis, and continues to exist today. The rhetoric since 2014 has been largely anti-immigrant with fears that migrants will accompany job loss or an increase in crime.[33] Therefore, when the number of migrants arriving overwhelmed the United States border, the US looked to Mexico and Mexico was in little position to object.

United States – Mexico Relations Today

The ability of the United States to rely on Mexico for its border security needs may be changing. The election of President Trump has called into question the predictability of the United States. As President Trump has implied on multiple occasions, Mexico can no longer definitively rely on the United States to uphold NAFTA.[34] Additionally, the new administration, rather than offering economic aid to Mexico for southern border security, has called for Mexico to pay for a wall to be built along the United States – Mexico border.[35] Unsurprisingly, Mexico objected to this.[36] The United States has also increased the deportation of immigrants living in the interior of the country, which will likely affect the amount of remittances sent back to Mexico.[37]

This is a sign that the United States may be losing influence and control over the region. Although President Trump has threatened to make NAFTA contingent on Mexico’s immigration enforcement,[38] the United States likely needs NAFTA to remain dominant. Without the stability, predictability, and participation in multilateral agreements such as NAFTA, its less likely the United States can insist that Mexico continue to protect its southern border for the United States. Without the assurance of an economic benefit, Mexico is rethinking its interest in continuing to cooperate with the United States on border security and has begun using migration as a tool.[39] As Mexico’s economic minister stated, without NAFTA “[t]here would be no incentive to continue collaborating on important issues for North American security such as migration issues.”[40]

For now, NAFTA and Mexico’s border security program remain in place. NAFTA may be re-negotiated, which would give the United States the chance to once again solidify its place as the region. However, the continual shifts in the United States’ support for NATO, NAFTA, and the Worth Trade Organization, as well as the generally decreasing stability and predictability of the current administration, demonstrates that the United States can no longer be counted on as the dominant power. One part of ensuring stability is the ability to properly regulate migration.[41] That is, the United States’ stability relies in part on its ability to regulate migration. For Mexico, that means that a somewhat unstable United States is in greater need of regulating migration, which is clear based on President Trump’s call to include immigration in NAFTA. This gives Mexico an opportunity to impact United States’ policy through the creation of a migration state, where it opens or closes its borders based on the how Mexico will benefit from a decrease in power of the United States.

Alison Sheets is a Staff Editor with the Denver Journal of International Law & Policy, and a 1L at the Sturm College of Law.

______________________________

[1] Trump Says May Tie Mexican Immigration Control to NAFTA, Reuters (last visited April 23, 2018), https://www.reuters.com/article/us-trade-nafta-trump/trump-says-may-tie-mexican-immigration-control-to-nafta-idUSKBN1HU1ZE.

[2] Lorenzo Caliendo and Fernando Parro, Estimates of the Trade and Welfare Effects of NAFTA, 1 The Review of Economic Studies 3 (2015).

[3] Id.

[4] Ann Kimball, The Transit State: A Comparative Analysis of Mexican and Moroccan Immigration Policies 12 (Univ. of San Diego Ctr. for Iberian and Latin American Studies and Ctr. for Comparative Immigration Studies Working Paper No. 150, 2007),  https://ccis.ucsd.edu/_files/wp150.pdf.

[5] The Wall Around the West: State Borders and Immigration Controls in North America and Europe 62 (Peter Andreas and Timothy Synder, eds., 2000).

[6] Raquel Aldana, Won Kidane, Beth Lyon, and Karla McKanders, Global Issues in Migration Law 103 (2013).

[7]  U.S. Customs and Border Protection, Southwest Border Unaccompanied Alien Children FY 2014 (2015).

[8]  Id.

[9] Id.

[10] Tom Dart, Child migrants at Texas border: an immigration crisis that’s hardly new, The Guardian (July 9, 2014), https://www.theguardian.com/world/2014/jul/09/us-immigration-undocumented-children-texas.

[11] Id.

[12] Aaron Korthuis, Outsourcing Refoulement: The United States and the Central American Refugee Crisis, Yale Journal of International Law (2016).

[13] Mexico’s Other Border Security, Migration, and the Humanitarian Crisis at the Line with Central America, The Washington Office on Latin America (2014).

[14] Id.

[15] Border Statistics Update: Mexico’s Increased Enforcement Matches U.S. Border Efforts, The Washington Office on Latin America (May 20, 2015), https://www.wola.org/2(015/05/border-statistics-update-mexicos-increased-enforcement-matches-us-border-efforts/.

[16] Clay Boggs, Mexico’s Southern Border Plan: More Deportations and Widespread Human Rights Violations, The Washington Office on Latin America (Mar. 19, 2015).

[17] Id.

[18] Carrie Kahn, Mexican Crackdown Slows Central American Immigration To U.S., NPR (Sept. 12, 2014), https://www.npr.org/sections/parallels/2014/09/12/347747148/mexican-crackdown-slows-central-american-immigration-to-u-s.

[19] Id.

[20] John Holman, Mexico’s ‘invisible wall’, a Migrant Double Standard, Aljazeera (Feb. 16, 2107), https://www.aljazeera.com/indepth/features/2017/02/mexico-invisible-wall-migrant-double-standard-170214213612822.html.

[21] Boggs, supra note 16.

[22] The Wall Around the West: State Borders and Immigration Controls in North America and Europe 63 (Peter Andreas and Timothy Synder, eds. 2000).

[23] Id.

[24] G. John Ikenberry, Getting hegemony right, The National Interest 18 (2001).

[25] Id. at 20-21.

[26] Kahn, supra note 19.

[27]Jie Zong and Jeanna Batalova, Jeanna, Mexican Immigrants in the United States, Migration Policy Institute (Mar. 17, 2016), https://www.migrationpolicy.org/article/mexican-immigrants-united-states.

[28] Id.

[29] James F. Hollifield, The Emerging Migration State, 38 The International Migration

Review 885, 893 (2004).

[30] Id. at 887.

[31] Id.

[32] See Id. at 893.

[33] Emily Stewart, Trump campaign ad says Democrats are “complicit” in murders committed by undocumented immigrants, Vox (Jan. 21, 2018), https://www.vox.com/platform/amp/policy-and-politics/2018/1/21/16916480/trump-complicit-ad.

[34] Jessica Trisko Darden, A NAFTA renegotiation may have some unexpected consequences on US immigration and border security, Business Insider (May 5, 2017), http://www.businessinsider.com/nafta-renegotiation-trump-mexico-implications-2017-5?r=UK&IR=T.

[35] Donald Trump’s Mexico wall: Who is going to pay for it?, BBC News (Feb. 6, 2017), http://www.bbc.com/news/world-us-canada-37243269.

[36] Mexican opposition candidates slam Trump wall ahead of campaign, Reuters (Feb. 18, 2018), https://www.reuters.com/article/us-mexico-election/mexican-opposition-candidates-slam-trump-wall-ahead-of-campaign-idUSKCN1G2061.

[37] Miriam Valverde, Have deportations increased under Donald Trump? Here’s what the data shows, Politifact (Dec. 19, 2017), http://www.politifact.com/truth-o-meter/article/2017/dec/19/have-deportations-increased-under-donald-trump-her/.

[38] Trump Says May Tie Mexican Immigration Control to NAFTA, Reuters (last visited April 23, 2018), https://www.reuters.com/article/us-trade-nafta-trump/trump-says-may-tie-mexican-immigration-control-to-nafta-idUSKBN1HU1ZE

[39] Darden, supra note 35.

[40] Julian Borger and David Argen, Mexico will not accept Trump’s immigration plans, says foreign minister, The Guardian (Feb. 22, 2017), https://www.theguardian.com/world/2017/feb/22/mexico-trump-immigration-foreign-minister-luis-videgaray.

[41] Hollifield, supra note 30 at 903.

Posted in 1TVFA Posts, 2Featured Articles, Alison Sheets, DJILP StaffComments (0)

Trouble in the Arctic?

Source: CNBC

Source: CNBC

The Arctic, a region that proved elusive to explorers for centuries, is now more important than ever. As ice thaws and the Arctic warms at a rate twice that of the global average,[1] international interest and attention in the region has piqued. The combination of natural resources, potential new trade routes, and strategic interests holds the possibility of shifting international dynamics, for better or worse.

Though relations in the region have been peaceful thus far, the prospect of resource and territorial disputes could turn contentious. In order to avoid conflict in the Arctic, the international community must continue to work as a whole, reaffirming the conventions and treaties that have been largely responsible for facilitation of peace in the region thus far. However, even if the Arctic remains emblematic of accord and international cooperation, continued development of the region may still serve to perpetuate power discrepancies worldwide, as nations with deep pockets buy influence.

This paper will address the increasing importance of the Arctic, beginning with the history of exploration and the role of climate change in current exploration. It will then outline the various international doctrines and agencies responsible for establishing guidelines concerning Arctic governance. Next, primary motivations for exploration will be outlined. These include the presence of natural resources, improved trading opportunities, and advanced strategic interests. The paper will consider the various implications that could result from increased Arctic development, both good and bad. It concludes by presenting policy considerations, arguing for the creation of oversight bodies and inclusive platforms for discussion.

I. The Arctic in Context

A. Historical Background

The Arctic has an extensive exploratory past. By the 16th century, European exploration of the region was well underway.[2] Finding a Northwest Passage that could allow for more efficient trade between Europe and Asia was the driving force behind Arctic exploration.[3] Though expeditions through the Arctic proved dangerous, exploration persisted.[4] By the end of the 19th century, as a result of this continued exploration and warming temperatures, the Northwest Passage was revealed.[5] As polar ice continues to melt, the Northwest Passage and the Arctic itself have become increasingly accessible.

B. The Role of Climate Change

Since 1979, the length of the melt season for Arctic sea ice has grown by 37 days, with ice now beginning to melt 11 days earlier and refreezing 26 days later than it used to, on average.[6] In August 2012, sea ice extent[7] reached its lowest level since satellite observations began in 1979.[8] It is estimated that within the next 25 years, the Arctic will have iceless summers.[9] As the ice continues to thaw at an accelerated rate, access to new trading routes, fishing grounds, and significant deposits of oil, gas, and minerals will become available. The irony of this is that climate change has played an integral role in opening the Arctic up for business opportunities capable of furthering climate change.

II. International Law and the Arctic

Currently, various international conventions and councils determine the ways in which countries interact with one another and the Arctic. The Arctic Council is the preeminent intergovernmental forum used to address Arctic issues.[10] The council is consensus-based and addresses issues pertaining to sustainable development, the environment, and scientific cooperation in the Arctic Region.[11] It is comprised of 14 members who possess Arctic territory: Canada, Russia, Denmark, Norway, the U.S., Sweden, Finland, Iceland, and six permanent groups that represent the indigenous peoples of the Arctic.[12] States and entities that lack Arctic territory but have interests in the region are able to gain a limited observer status within the council.[13]

The United Nations Convention on the Law of the Sea (UNCLOS) is also important in providing a framework for Arctic relations.[14] UNCLOS is an international agreement, which 167 parties have signed onto.[15] It establishes guidelines and a “legal framework within which all activities in the oceans and seas must be carried out.”[16] While the U.S. recognizes UNCLOS as customary international law, it is not a party to the convention.[17]

In addition to the Arctic Council and UNCLOS, there are various other sources that contribute to the framework of governance in the Arctic Region, including the Svalbard Treaty, the North Atlantic Coastguard Forum, and the Conference of the Parliamentarians of the Arctic Region.[18] Each addresses maritime relations or the development of the Arctic more specifically.[19]

III. Why is Exploring the Arctic So Important?

A. Natural Resources

The abundance of natural resources is a primary factor contributing to increased international interest in the region. It is estimated that as much as 30% of the world’s undiscovered gas and 13% of the world’s undiscovered oil is located in the Arctic Circle.[20] UNCLOS gives members exclusive rights to natural resources found within 200 miles of their coastlines.[21] If a country wishes to make any additional claims that fall outside of this 200-mile demarcation, they must prove the seabed is physically connected to their country, thereby ensuring that the only nations able to extract Arctic resources are those who possess Arctic territory.[22] In this way, UNCLOS plays a role in limiting potential resource exploitation. However, because UNCLOS grants exclusive rights to the member states, member states are fairly unrestricted in the ways they can develop their Arctic territory, potentially creating room for harmful environmental practices. Many Arctic countries have begun planning initiatives relating to natural resource exploration, and Russia leads with the proposal of nearly 250 potential Arctic projects.[23]

Although non-Arctic countries are prevented from physically claiming territory in the region, countries with deep pockets and ambition can assert influence in other ways. China’s ambition is being pursued in exactly this way, as the nation finances Arctic scientific research, projects, and negotiating free-trade agreements with Arctic countries.[24] The problem is that much of the world lacks the capital to fund Arctic development in the way China has begun to. This prevents many nations from asserting any influence in the region, despite the ways in which such development will impact the global environment and economy.

B. New Trade Routes

The prospect of shorter shipping routes is key to understanding the increase in Arctic interest, largely because of the effect such routes would have on global trade. The Arctic could provide faster and more direct routes between Asia, Europe, and America.[25] Three trading routes are key to this prospect: the Transpolar Sea Route, the Northwest Passage, and the Northern Sea Route.[26] While each of these routes is only accessible seasonally without the use of an icebreaker,[27] the rapidly changing climate in the Arctic means it is only a matter of time until the routes become viable for longer periods. Most recently, on January 26, 2018, China announced its intention to work cooperatively with other nations to develop shipping routes through the Arctic.[28] China vocalized the importance of ensuring that every country has rights to use the potential shipping routes.[29]

C. Strategic Positioning

A third reason for the increased interest in the region is the potential for utilizing Arctic terrain as a means of advancing strategic interests. As a result of escalating anxieties with Russia, Finland is currently considering joining NATO[30] and in 2017 Sweden reintroduced a military draft.[31] This increasing tension and the possibility that Russia could become surrounded by NATO member nations is one potential explanation for Russia’s involvement in Arctic activities. Russia is a unique state, possessing an Arctic border that spans a whopping 4,000 miles.[32] Russia could be playing defensive geopolitics in the Arctic, rather than offensive in an attempt to protect its borders. Likewise, U.S. Arctic strategy could be a prioritization of the same goals. In January 2017, Defense Secretary James Mattis described the Arctic as “key strategic terrain,” encouraging the development of a comprehensive strategy, especially in light of Russia’s increased activity in the region.[33]

IV. The Future of Arctic Impact on the Globe

The effect that Arctic development will have on the future of international relations is anything but clear. The multiple motivations for getting involved in the region contribute to a plentitude of potential outcomes.

A. The Good

The best-case scenario is that future relations in the Arctic remain emblematic of peaceful international cooperation, largely as they are now. The possibility of nations working together to further develop efficient Arctic trade routes could help facilitate unprecedented international partnership. This could help improve diplomatic relations and further the advancement of the global economy.

B. The Bad

The worst-case scenario is that Arctic development contributes to escalating global tensions. The fast-paced nature of today’s world leaves room for dramatic shifts in international relations to occur overnight. As countries assert territorial claims and extract natural resources, nations’ interests may run counter to each other. This type of contention has already presented itself. Take the Northwest Passage, for example. Canada claims the passage constitutes internal waters, while the U.S. asserts the water is an international strait.[34] Beyond just internal disputes, the amount of natural resources available in the Arctic region may lead to resource extraction that further denigrates the environment at the will of a small handful of countries. An increased volume of shipping through new passages and pipeline installation for oil extraction will increase the likelihood of accidents and spills.[35] The possibility for this outcome is only further exacerbated by the remoteness of the region, potentially preventing adequate monitoring of economic and geopolitical activity.

Perhaps most concerning is the fact that, even under the most optimal outcomes, conversations concerning the future of the Arctic center on only a few global players. Huge portions of the world will find themselves unable to participate or compete in this new emerging market. Lacking an authoritative voice in this debate, many nations will not have their interests adequately represented in a region that will certainly affect the world as a whole. In this way, the future of the Arctic will unavoidably contribute to even more obvious and detrimental global power imbalances. This limiting nature of the Arctic is a problem, as nations with Arctic territory and nations with big money are the only ones able to claim a stake in the region. In this way, the Arctic may play a crucial role in cementing harmful power dynamics, speaking loudly to the aphorism, “the rich get richer and the poor get poorer.”

C. What Now?

There is an opportunity to develop additional policy and law that address Arctic development and promotes positive outcomes for the global community. For one, Arctic Council members should explore the possibility of creating a watchdog body for the council, tasked with observing and monitoring action in the region in order to spot harmful activity. Additionally, the formation of such a body could play a beneficial role in facilitating constructive relationships and alleviating tensions among member states.

The international community should also work more purposefully at taking into consideration the voices and concerns of non-Arctic nations, lacking the ability to assert monetary or political influence in the region, yet likely to be impacted by Arctic development. One potential way of accomplishing this would be to work within the confines of UNCLOS by creating a separate committee represented by UNCLOS member states. This would provide a platform for discussion, where member states could express their concerns with Arctic development and articulate changes they would like to see. Because so many countries have signed onto UNCLOS, working within its constraints is an efficient way to have the voices of many nations heard and potentially propel future policy initiatives that are more reflective of all member states.

V. Conclusion

The Arctic is a dynamic region of critical importance. It has the potential to affect both the present and future of the globe, in positive and negative ways. The combination of regional exploration and climate change has culminated in the high stakes environment we see today—one where the prospect of abundant natural resources, more efficient trading routes, and the ability to advance strategic goals has piqued the interests of many. In continuing to develop the Arctic, measures should be taken to guarantee that the environment and international relations are supported. In order to ensure future international cooperation and inclusion of all concerned, the Arctic must be developed in strategic and tempered ways.

Payton Martinez is a Staff Editor with the Denver Journal of International Law & Policy, and a 1L at the Sturm College of Law.

___________________________________________________________________________________________________________________

[1] Tim Koivurova, The Dialectic of Understanding Progress in Arctic Governance, 22 Mich. St.  Int’l L. Rev. 1, 1-21 (2013).

[2] Woods Hole Oceanographic Inst., The Arctic: Exploration Timeline, Polar Discovery (2006), http://polardiscovery.whoi.edu/arctic/1594.html.

[3] Id.

[4] Greg Miller, These Maps Show the Epic Quest for a Northwest Passage, Nat’l Geographic (Oct. 20, 2016), https://news.nationalgeographic.com/2016/10/northwest-passage-map-history/.

[5] Id.

[6] Climate Change Indicators: Arctic Sea Ice, U.S. Env’t Prot. Agency (2016), https://www.epa.gov/climate-indicators/climate-change-indicators-arctic-sea-ice.

[7] See generally Nat’l Snow & Ice Data Center, https://nsidc.org/cryosphere/quickfacts/seaice.html (last visited Jan. 27, 2018) (defining extent as a measurement of the area of ocean where there is at least some sea ice).

[8] Nat’l Snow & Ice Data Center, http://nsidc.org/arcticseaicenews/2012/09/arctic-sea-ice-extent-settles-at-record-seasonal-minimum/ (last visited Jan. 27, 2018)

[9] Eric Roston, How a Melting Arctic Changes Everything, Bloomberg (Dec. 29, 2017), https://www.bloomberg.com/graphics/2017-arctic/the-economic-arctic/.

[10] Evan Bloom, Establishment of the Arctic Council, 93 Am. J. Int’l Law 712, 712 (1999), https://2009-2017.state.gov/documents/organization/212368.pdf.

[11] Id.

[12] Id.

[13] Joseph F.C. DiMento, Environmental Governance of the Arctic: Law, Effect, Now Implementation, 6 U.C. Irvine L. Rev. 23, 23-60 (2016).

[14] See generally U.N. Convention on the Law of the Sea, opened for signature Dec. 10, 1982, 1833 U.N.T.S. 397 (entered into force Nov. 16, 1994), available at http://treaties.un.org/doc/publication/UNTS/Volume%201833/v1833.pdf.

[15] The U.N., United Nations Convention on the Law of the Sea, Sustainable Development Knowledge Platform – the United Nations, https://sustainabledevelopment.un.org/topics/oceans/unclos (last visited Jan. 27, 2018).

[16] Id.

[17] DiMento, supra note 13, at 33.

[18] Id. at 42.

[19] Id. at 42-44.

[20] Donald L. Gautier et al., Assessment of Undiscovered Oil and Gas in the Arctic, 324 Science 1175, 1175-79 (2009).

[21] Koivurova, supra note 1, at 11.

[22] Id.

[23] Roston, supra note 9.

[24] Id.

[25] China to Develop Arctic Shipping Routes Opened Up by Global Warming, BBC News (Jan. 26 2018), http://www.bbc.com/news/world-asia-china-42833178 [hereinafter China to Develop Arctic].

[26] Shane C. Tayloe, Projecting Power In The Arctic: The Russian Scramble for Energy, Power, and Prestige In The High North, 8 Pepperdine Pol’y Rev. 1, 1-19 (2015).

[27] Id. at 8.

[28] China to Develop Arctic, supra note 25.

[29] Id.

[30] Reid Standish, Wary of Russia, Finns take another look at NATO, Politico (Oct. 30, 2017), https://www.politico.eu/article/finland-russia-nato-wary-finns-take-another-look/.

[31] Colin Dwyer, Sweden Brings Back the Draft, Alarmed by Russian Activities, NPR (Mar. 2, 2017), https://www.npr.org/sections/thetwo-way/2017/03/02/518116191/sweden-brings-back-the-draft-alarmed-by-russian-activities.

[32] Tayloe, supra note 26 at 6.

[33] Paul Watson, A Melting Arctic Could Spark a New Cold War, Time (May 12, 2017) http://time.com/4773238/russia-cold-war-united-states-artic-donald-trump-barack-obama-vladimir-putin/.

[34]William Y. Kim, Global Warming Heats up the American-Canadian Relationship: Resolving the Status of the Northwest Passage under International Law, 38 Canada-U.S. L.J. 168 (2013).

[35] DiMento, supra note 13, at 26.

Posted in 1TVFA Posts, 2Featured Articles, DJILP Staff, Payton MartinezComments (0)

The Trans-Pacific Partnership: Where Do You Stand?

Photo Credit: Saigoneer

On February 4, 2016, the Trans-Pacific Partnership, or “TPP”, was signed by the United States and eleven other countries as one of the most ambitious international trade deals in world history. Through its seven years of grueling negotiations, the criticism of this deal has been, for the lack of a better term, loud.  The TPP is a gargantuan, multi-national trade agreement with a lot of complicated international trade jargon; and as such, there have been a lot of choice words tossed around relating to it, not all of which is credible. Thus, what I am going to try to do is break down the pros and cons of the agreement:

 

Pro:

It will create jobs in the United States and improve the economy.

Economists forecast that the TPP will increase exports by 5 billion dollars, money that will be used to both create business, jobs, and wealth in the United States. It will accomplish this by removing roughly 18,000 tariffs in the Pacific, reducing costs and allowing American businesses to generate higher returns on their sales. While this may seem like a benefit we cannot afford, consider the fact that roughly 80% of tariffs with these 12 countries have been withdrawn prior to the implementation of the TPP. This will prove fairer to American business and make it easier for them to compete. US workers are expected to see a raise in income of about 77 billion dollars.It will help the American automotive industry by reducing the protective tariffs on automobiles in countries like Japan, making it easier to sell American cars to them and further aiding the American automobile industry.

It has strategic value against China.

If you haven’t notice, China is the elephant in the room of this deal. More specifically, they are the elephant outside of the room, as they were purposefully left out of the deal. This economic push has been a part of the Obama administration’s pivot to the Pacific, finding that China’s leverage over the United States has been increasing every day. This deal forms a unified front to compete against China economically in the region, led by the United States. It will create allies, and it will isolate China, preventing them from throwing their weight around during negotiations, and making it more likely that they will be careful not to rock any boats in the foreseeable future. China’s strength comes from its economic girth, and the threat of replacing the Chinese market with others will force it to negotiate from a weaker position in the international arena. These benefits are almost unknown, but it is agreed that it will mostly be positive for the United States.

It helps poor people in poor countries.

State-owned enterprises must comply with trade standards that mandate protecting their workers. Effectively, many countries that did not observe or allow unions to form before, must allow unionization now in order to comply with the TPP. Furthermore, most of these countries will observe benefits to poorest people, allowing them to find suitable, better paying jobs than before the TPP’s implementation. While NAFTA did hurt a considerable amount of people in Mexico, it paled in comparison to the kind of employment requirements the TPP will mandate of its parties. The truth is, measuring NAFTA’s effects on Mexico as an example of what the TPP will do won’t do the ambitious agreement justice. This is truly a whole other animal. For more information on human rights under the TPP, click here for another article written by one of our staffers, Jeremy Goldstein.

It is environmentally friendly.

All countries have agreed to cut down on wildlife trafficking, both marine and on land. It prevents environmental abuses. If a country does not comply with its duties under the TPP, they will be subject to “trade retaliation”, which is fancy word for voiding the parties’ trade responsibilities to the injuring country until they comply with the TPP. So effectively, countries that aren’t doing their fair share to save the Earth among the TPP will be subject to losing their privileges under the agreement. While it might be hard to imagine countries bring claims against others for these environmental violations, it would allow the party to implement trade barriers against the violating country, scoring points with local interest groups. There are reasons to do it, and rest assured it will happen. The frequency is the only real question on everybody’s minds, let alone how often violations will even occur.

Con:

It will kill jobs in the United States, and most of the benefits will be felt by the richest.

While there will be gains for workers across the board in the United States, most of that gain will go to workers making more than 88,000 dollars a year. This is partly because of the stronger international protections being offered to intangible property rights, making it even easier for the owners of that property to reap larger gains. Moreover, just like with NAFTA, there will be US jobs that will ship overseas, it is a major sacrifice of any trade deal. Particularly, manufacturing and textiles will feel the brunt of the move, but no industry will be free either. Even the service industry will send some jobs overseas. Overall, trickle-down economics is the major argument in favor of the TPP, but its application in reality has been brought to question by major economists including Robert Reich and Jeffery Sachs.

Foreign businesses will be able to sue the United States outside American courts.

It might surprise many to learn that this particular provision was implemented by American companies specifically. The primary reason behind investor-state arbitration provisions in trade agreements is to circumvent corruption. Corrupt governments make lawsuits practically impossible to sustain, forcing foreign companies trying to enter those markets to incur immeasurable costs. These provisions allow businesses to circumvent corrupt government practices and try laws under fairer arbitration tribunals. The arbitration award is granted to the business if the country was found to be in violation of the TPP, and the award is enforced by allowing all signatories of the treaty to implement trade restrictions as “trade retaliation” for not paying damages, along with measures under the New York Convention. This may seem like a huge win for big business, but it makes it easier for smaller businesses to enter foreign markets as well by reducing the costs of potential litigation in a corrupt country. While the United States will be suable by foreign businesses, it is worth noting that under NAFTA, the United States has never lost an investor-arbitration claimIf anything, the bigger potential for abuse will be against foreign governments who attempt to implement good policy in the name of public welfare, but they get attacked because of the heightened costs to foreign businesses. While that abuse remains, exceptions to investor-state arbitration were put into the TPP, such as in the tobacco industry. Foreign businesses will be allowed to use investor-state arbitration to challenge American laws that have damaged their businesses.

With that said, the only way to implement such a provision is to accept the standard ourselves. While the United States will be suable by foreign businesses, it is worth noting that under NAFTA, the United States has never lost an investor-arbitration claim. If anything, the bigger potential for abuse will be against foreign governments who attempt to implement good policy in the name of public welfare, but they get attacked because of the heightened costs to foreign businesses.

Intellectual property enforcement will prevent the poorer countries in the TPP from getting the drugs they need.

It should be noted however that this was a major obstacle that the US had to overcome with some of the poorer countries in the TPP. In order to surmount it, the US had to agree to shorter patent protection time periods, reducing the typically 12 year period to five to seven, depending on the patent. But that period could still prove to be too long, and many foreign governments simply cannot afford to pay for the exorbitant prices of some of these pharmaceutical drugs, even at discounted rates. While businesses under the TPP have agreed to continue to allow some creation or marketing of generic medicines using their patents, the intellectual property section of the TPP is one of the heftiest chapters and it remains to be seen how the interactions between all of these intellectual property rules will play out.

The deal will not protect the environment in practice.

Perhaps the most significant drawback to the TPP will be the environmental effects in practice. While each and every country will be required to comply with the environmental provisions of Chapter 20, the countries themselves will have to bring violations of the TPP’s provisions to a dispute resolution body. In fear of retaliatory or cross-claims, countries may be hesitant to actually bring violations of some of the provisions if the cost of adjudicating is simply too high in the short-run relative to the long-term damaging effects of environmental pollution. Essentially, this will also mean that businesses will find more pressure to compete internationally, forcing them to lower their costs. Environmental regulation can be costly to comply with, and many businesses will likely try to skirt around the rules as much as possible to lower costs.

To read the entire text of the TPP in full, click here. For a summary of each chapter, click here. Now that you have all the information, decide which side of the debate you stand on and feel free to comment below.

 

 

 

James Harmoush is a 2L at the Sturm College of Law and the Online Managing Editor of the Denver Journal for International Law and Policy.

Posted in 1TVFA Posts, 2Featured Articles, DJILP Staff, James HarmoushComments (0)

The Hidden Cost of Shrimp: Forced Labor in Thailand’s Fishing Industry

1 Photo
A Thai fishing boat along Koh Samet, an island in the country’s eastern seaboard. Source: Mongabay, Lies, Deceit And Abduction Staff Thailand’s Fishing Industry. Photographer: Philippe Gabriel.

Imagine a pirate boat, surrounded by miles of unending water. Exhausted, scared people trapped aboard that floating prison, forced to work up to twenty-four hours nonstop for little or often no pay. They are living in inhumane conditions only on rice, parts of fish that no one else would touch, and unclean, unhealthy water. They are held in a cages, regularly beaten, forced to take methamphetamines to keep them working long hours, and sometimes killed for working not fast enough or for trying to escape. These execution-style killings are done in a variety of horrifying ways including electrocuting or tying the slave “by his limbs to the bows of four vessels, so that the ocean waves [will] tear the worker’s body apart.” Having no glimpse of hope to be ever free, they are desperate because even risky escapes are rarely successful: corrupt law enforcement officials often return fleeing slaves back to the ships for a fee. Imagine the dark and chilling refrigeration area on this pirate ship where caught fish are stored along with the corpses of killed slaves. Now imagine a shrimp farm in Thailand, where the farmers raise shrimp feeding them slave-caught fish that pirate ship supplied. Once the shrimp grow, they are exported to food manufacturers and retailers around the world, including the United States’ major food chain distributors such as Santa Monica Seafood, Stavis Seafoods, Thai Union and end up in supermarkets such as Costco, Wal-Mart, Kroger, Safeway, and Albertsons. Did you buy shrimp lately? The price for that “plate of seafood” on your table costs more than the dollar value you paid for it. The price is horror, the desperation of forced laborers, the tears of their mothers and children. As Hlaing Min, a runaway slave, one of a few who have successfully fled from a pirate boat, expressed: when Americans are eating seafood, “they should remember” the slaves, the slaves whose bones could easily form a mountain – “an island, it’s that many” – of bones of forced laborers that are under the sea.

It is not a fictional horror story. It is a reality, the reality of modern-form slavery in Thailand. Thailand, one of the world’s major seafood exporters and a key seafood supplier of United States, is remarkable in its forced labor practices. Human rights abuses in the Thai fishing sector are not a new phenomenon; deeply embedded in a commercial global supply chain, these abuses did not receive required attention up until recently. Unsurprisingly, Thailand is the only country in the world that voted against a U.N. international treaty intended to stop forced labor. Thailand’s current fishery laws, including the Fisheries Act, B.E. 2490 (1947); the Act Governing the Right to Fish in Thai Waters, B.E. 2482 (1939); and the Thai Vessel Act, B.E. 2481 (1938) are all woefully outdated.

Despite the Thai government’s numerous assurances to the international community to clean up its fishing industry from human rights abuses and its boosted legislative efforts in regards to protection of workers employed within the fishing industry (including Thai Anti-Trafficking in Persons Act, B.E. 2551 (2008); Labor Protection Act, B.E. 2541 (1998); the Recruitment and Job-Seekers Protection Act, B.E. 2528 (1985); the establishment of more strict labor regulations on fishing vessels; the requirement of national registry for illegal migrant workers; and the establishment of shelter facilities for victims of human trafficking), uninterrupted exploitation of forced laborers is still present in the fishing sector. “The reality is [that] the Thai government’s high-sounding rhetoric to stop human trafficking and clean up the fishing fleets still largely stops at the water’s edge,” Phil Robertson, deputy director of Human Rights Watch’s Asia division explained.

3 Photo

Former slaves on Thai-run ships wait processing after being rescued. Source: Mongabay. Photo courtesy of the Labour Rights Promotion Network.

Corruption that remains among government and law enforcement officials creates an environment of impunity, especially around human rights abuses of migrant laborers, discouraging the rare surviving victims from pursuing charges against their abusers. Due to virtually inexistent legal protection for undocumented workers and fear of arrest or deportation, most migrant fishers choose to be abused rather than seek out protection from the Thai authorities. Making human rights abuse even worse, there is a history of political and cultural conflict between Thailand and its neighboring countries and, as a result, people in Thailand have little or no concern for the lives of migrants; some of them even “see the abuse as justified.” The exploitation of laborers in the Thailand fishing industry already is “one of the worst examples of human rights abuse in the world today.” Yet the International Labor Organization stressed in its 2015 Report that countless cases of human trafficking and forced labor that were already uncovered are only “the tip of the iceberg in terms of the real prevalence of such abuses” in Thailand.

Abusive practices of overfishing have ravaged the marine ecosystems of Thailand, depleting fish stocks, and pushing fishing boats to move farther offshore, traveling as far as Eastern Indonesia and East Africa in search of a profitable fish catch. They often stay at sea for months or even years at a time. Not many Thai residents want to take these low-paid, dangerous jobs as fishermen; legal labor migration is limited through Thailand’s government policies, and it is not even economically viable for fishing companies to use a paid workforce. Yet Thailand seafood exports generate near $7 billion in annual earnings and to meet this demand a network of human traffickers and brokers has emerged. These brokers regularly recruit men and sometimes even children from poor neighboring countries, coercing, tricking and often drugging and kidnapping people to work in the fishing-related industry. When forced laborers become unable to work, die, or escape from sea slavery, the brokers can easily replace them with new recruits. Each slave, who is bought and sold like an animal, costs around $1,000, in some cases even less than $400 and is often subjected to forms of debt bondage, told to work off the “debt.”

As the U.S. State Department noted in its annual Trafficking in Persons Report (TIP), there are approximately three to four million migrant laborers in Thailand, most of them from Burma, Cambodia, Laos, Vietnam, India, China, and Uzbekistan. According to the Environmental Justice Foundation, more than ninety percent of people working in Thai fishing industry are migrant workers. Yet the total population of fishermen is unknown because most migrants do not go through a registration system. In its 2014 report, the U.S. Bureau of International Labor Affairs has reported that shrimp in Thailand is produced by both child and forced labor. TIP puts Thailand at Tier 3, the lowest level of its report, meaning that Thailand does not comply with the Trafficking Victims Protection Act’s minimum standards and is not making substantial efforts to comply.

Even though U.S. companies have become increasingly aware of slavery and human trafficking in the Thailand supply chain, as of 2015, United States shrimp demand has increased its production in Thailand by twenty percent from the last year, expecting to import at least 250,000 metric tons of shrimp. Though the United States has a large domestic shrimp industry in the Gulf of Mexico, U.S. shrimp are more expensive than the shrimp from Thailand. Thus, driven by the goal of keeping their prices for shrimp low and so to obtain more profits, U.S. retailers import shrimp. In fact, ninety four percent of the shrimp consumed in U.S. is imported farmed shrimp.

Some advocates of ending human rights abuses suggest that retailers should simply boycott suppliers who engage in slavery practices. Yet corporations have pointed out that this would not solve the problem because less-ethical buyers would line up to take their place or pointed to a lack of alternative sustainable seafood. Furthermore, because of the complicated nature of the global seafood chain, the use of trafficked labor is easily hidden in the process. As Huw Thomas, head of seafood procurement at Wm Morrison Supermarkets explains, tracking the source of seafood products is very difficult because the seafood industry is incredibly complicated and it may sometimes require tracing more than ten steps that separate the corporation, which bought the farmed seafood products, from the origins of fishmeal that go into the shrimp. Still some human rights organizations have already simplified that tracking for corporations: “[i]f you buy prawns or shrimp from Thailand, you will be buying the produce of slave labour,” Aidan McQuade, director of Anti-Slavery International, explains.

Only a few resources and programs currently exist that help to identify links in the seafood supply chain where slavery occurs. Humanity United (HU), a San Francisco-based foundation, recently designed a campaign to combat slavery and human trafficking. The campaign includes four aspects: (1) focusing on targeting a single industry in a single country (HU chose Thailand fishing industry as a target); (2) chartering a coordinated strategy by cultivating a network of partners (HU encourages its partners to engage in work and not just simply sign checks to the organization); (3) interacting with the corporate business interests (HU confronts human rights abuses and helps companies to improve labor conditions of Thai workers); and (4) monitoring and confirming whether labor conditions in the seafood industry are actually improving (HU plans to pursue certification platforms and incorporate its assessments of work conditions into the certification process).

4 Photo

On Costco shelves as of August 18, 2015. Source: Case3:15-cv-03783.

Everyone in Thailand and every corporation doing business with Thailand is keenly aware of slavery and human trafficking issues in the seafood industry supply chain. Indeed, all leading retailers “have factored these issues into their social responsibility approaches.” For example, in 2014, several corporations, including Costco and Tesco, announced publicly that they do not tolerate human trafficking and slavery and promised to scrutinize their supply chains, avoiding suppliers that engage in human rights abuses. Yet, violating its own public statements and its Supply Chain Disclosure, Costco continued to sell slavery-tainted shrimp to consumers until fall of 2015. Frozen shrimp and shrimp in wonton soup that Costco was selling were supplied to Costco by Thailand company Charoen Pokphand Foods Public Company Limited (Charoen Pokphand Foods) or C.P. Food Products, Inc. (C.P. Foods). Those Thailand-based companies, as Guardian reported in June, 2014 after its six-month investigation, bought processed fish from suppliers that operated or, in turn, bought from pirate fishing vessels manned with slaves; C.P. Foods fed that processed fish to the shrimp it farmed prior to selling it to Costco. Furthermore, in 2014, Bob Miller, C.P. Foods’ UK managing director, already admitted that the company knew “there’s issues with regard to the [raw] material that comes in [to port].” However, Costco’s corporate practice of dealing with bad actors remained intact.

While activists alone cannot eradicate human rights abuses in the seafood industry, when the local Thai authorities fail to rein them in and U.S. corporations remain passive in cleaning up or monitoring their supply chains, U.S. consumers, who are unwilling to support slave labor practices, can help. On August 19, 2015, Monica Sud, one of Costco’s customers, commenced a California consumers’ class action against Costco and its Thai shrimp suppliers. Sud filed three claims for relief. The first claim is against Costco, Charoen Pokphand Foods, and C.P. Foods for unlawful business acts and practices. In regards to Costco, the lawsuit alleges that Costco for several years knowingly sold shrimp from Thai suppliers that farmed those shrimp on fish obtained from slave laborers and Costco was aware that the shrimp were directly derived from a supply chain that depended upon human trafficking and slavery. The second claim is against Costco for misleading and deceptive advertising practices, such as despite Costco’s knowledge of human rights abuses in its supply chain, Costco did not advise its customers that its farmed shrimp was tainted by the use of forced labor. The third claim is against Costco for violation of the Consumer Legal Remedies Act, seeking an injunction to bar Costco from selling forced labor produced products, requiring Costco to disclose products in its supply chain that have been tainted by slave labor, and alleging that Costco’s use of forced labor is inconsistent with its California Transparency in Supply Chains Act disclosure. The lawsuit also seeks to compensate shrimp products’ purchasers. The complaint does not allege Costco’s corporate liability for complicity in human rights violations, yet it does so against C.P. Foods, stating that the corporation is directly complicit in the use of forced labor practices and has profited from those practices.

After the commencement of Sud lawsuit, Richard Galanti, a spokesman for Costco, responded that Costco is doing all it can “to address the issues that have surfaced,” working with the Thai retailers, the fishing industry, and the Thai government. Acknowledging the existence of slave labor in Thailand’s fishing industry, Galanti noted that unsatisfied customers “can return [Costco]’s item for a full refund.” As of November 15, 2015, Costco removed all seafood products made in Thailand from its Colorado stores and its website. Anne Marie Murphy of Cotchett, Pitre & McCarthy, LLP, one of the attorneys representing Sud, stated that the lawsuit pursues goals of corporate reform and publicity; it is aimed to raise consumers’ awareness as to the issue of slavery; and hopefully will influence U.S. corporations’ practices, bringing long needed “change through the marketplace.”

Sud is the first consumer class action alleging inadequate disclosures and it set an example, started a new wave of class action litigation against other corporate defendants that have similar issues with forced labor produced products. Class actions already have been filed against Hershey, Iams, Mars, and Nestle. It is also expected that the attorney general, who has authority to enforce the California’s Transparency in Supply Chains Act, will begin filing civil suits against corporations, forcing them to fix their disclosures in compliance with the Act. Furthermore, keeping up with this movement, the Business Supply Chain Transparency on Trafficking and Slavery Act of 2015 was recently introduced into the U.S. House of Representatives and the Senate. The new law will require large corporations nationwide to report any measures they have taken to identify and address human rights abuses within their supply chains.

While according to Satasap Viriyanantawani, general manager for the Thai business of Siam Canadian Foods, shrimp buyers in United States can even dictate the price they want to pay to suppliers, giant purchasers, such as Costco, can challenge the system of human rights abuses, forcing change by dictating terms to its suppliers and ensuring the products they buy are not derived from or otherwise created through the use of slavery or human trafficking. However, instead of using its market power to stop slavery in its supply chain, Costco had facilitated it, fueling the cycle of human trafficking and slavery through its purchases of tainted shrimp. If Costco, a corporation with total revenues of $116,199,000 for 2015, does not have the resources to monitor and control its suppliers, then who does?

Eliminating human trafficking and slavery from the global seafood supply chain is not an easy task. Yet it is well possible if everyone – including international and national communities, the private sector, and consumers – gets involved and presses for change. As a long-term solution for making a real impact, getting corporations to change their policies and combatting slavery in their supply chains, the international community should create an enforcement mechanism of one model standard to monitor, audit, and certify the integrity of global supply chains. All information regarding each individual country should be required to be shared with the international community. Given the fact that U.S. corporations have “dominant market share” in the world, the corporations should use their position to influence and pressure their suppliers to join an “accountability revolution,” meaning to uphold standards of the international community, enforcing norm-conforming conduct, performing audits of their supply chains, and preventing the cycle of human trafficking and forced labor. It is in the best interest of everyone in the international and national communities to ensure that the price for a “plate of seafood” is the monetary amount and not its current real cost of the desperation and horror of people who were lured into a life of slavery until they meet their watery grave.

Ilona Starchak is a 3L law student at the University of Denver Sturm College of Law and the Staff Editor on the Denver Journal of International Law & Policy and the Denver Criminal Law Review.

Posted in 1TVFA Posts, 2Featured Articles, DJILP Staff, Ilona StarchakComments (0)

The Trans-Pacific Partnership: Exploring concerns over an Investor-State Dispute Settlement mechanism

transpacificpartnership
find more at https://curiousmatic.com/trans-pacific-partnership

After years of negotiations, this week saw the conclusion of the Trans-Pacific Partnership agreement (“TPP”). The TPP unites eleven pacific-rim nations and the United States–a collection of 40% of global gross domestic product and one-third of world trade–making it the largest regional trade agreement in history.

Although the terms of the agreement have not been released yet, it has been a divisive topic throughout negotiations. The Obama administration and TPP’s proponents point toward the elimination of more than 18,000 tariffs in place on American exports by the other participating countries as one of the key benefits of the deal. One of the sticking points for opponents to the deal is the inclusion of an investor-state dispute settlement (ISDS) mechanism. Critics of this ISDS provision claim it undermines state sovereignty by creating a supra-national tribunal where global corporation’s may sue member-states and receive taxpayer compensation.  On the surface, the critics concern is a real one–state sovereignty will be undermined–but states cede sovereignty each time they enter into an international agreement. The real issue at play is whether the obligations the TPP allows global corporations to enforce against the United States are so egregious as to make the cession of the United State’s sovereignty unacceptable.

An accurate answer to this issue cannot be had until the final terms to the TPP are released to the public. Although WikiLeaks published an alleged text of the Investment Chapter of the TPP in March of this year, which is said to create the ISDS. This post will wait to evaluate the obligations of the TPP until it is released. However, two of the rumored grounds for suit, “expected future profits” and indirect expropriation, are provisions found in many of the 3,000-plus trade agreements in place around the world. A look at corporations’ use of these provisions in other trade agreements provides positive arguments for both sides of the TPP ISDS debate.

Under NAFTA, Methanex, a Canadian corporation sued California for loss of $970 million in expected future profits after California banned the chemical MTBE from gasoline sold in the state. The NAFTA ISDS tribunal dismissed the claims against California. TPP supporters say the ruling prove that domestic regulations for the public good will win out under any ISDS regime. Opponents, on the other hand say that those companies from larger countries that are set to gain access to similar rights against the United States will not lose such cases. The ongoing dispute between the United States tobacco company Phillip Morris and Australia for mandating plain packaging of tobacco products on public health grounds is cited as an example of a suit TPP will allow against the United States to the potential detriment of taxpayers.

Opponents also fear “indirect expropriation” will be interpreted broadly by a TPP ISDS tribunal to oppose regulations that may diminish a foreign corporation’s investment expectations in the United States. An example of a corporation successfully suing a state for indirect expropriation is the 2012 Occidental Petroleum’s award of $2.3 billion from Ecuador for its expropriation of oil drilling. The Office of the United States Trade Representative has dedicated an entire website to dispelling critic concerns over a TPP ISDS tribunal issuing similar judgments against the United States. It cites investor burden of proof and a state’s ability to seek expedited review of frivolous claims brought against it as key mitigating factors.

TPP-protest-train-and-big-banner-1024x576

TPP protests

In the near future the final terms of the TPP will be released to the public. The agreement has the potential to change the United States’ strategic position in Asia and increase its exports in certain struggling industries. It also has the potential of opening the vault to the United States’ taxpayer money. I believe that in order for the TPP to pass congressional approval, ISDS provision must contain the mitigation mechanisms necessary to prevent foreign corporations from impeding the United State’s sovereign right to regulate trade within its borders. Whatever the outcome, the TPP ISDS tribunal will likely influence a similar ISDS provision in the Transatlantic Trade and Investment Partnership currently being negotiated between the United States and the European Union.

Posted in 1TVFA Posts, 2Featured Articles, DJILP Staff, Philip Nickerson, Phillip NickersonComments (0)

Critical Analysis: The Lime Crisis of 2014

The other day, I walked into a bar and ordered a gin and tonic. Instead of the customary lime wedge or wheel, my gin and tonic came equipped with a slice of orange. In response to my confused look, the server mumbled something about Mexican cartels. This piqued my interest and led me to discover that Mexican cartels, while a key ingredient, are not solely to blame for the current lime shortage. Flooding, disease, and a domestic lime shortage are also contributing to low lime supply and elevated prices.

Conflict in Mexico is contributing to the shortages of limes and the increase in prices. Image Source: Huffington Post

Conflict in Mexico is contributing to the shortages of limes and the increase in prices. Image Source: Huffington Post

Lime prices in Denver are currently set to a troubling high of $.50 each at Safeway, and $.89 each at King Soopers. Large-scale orders are faring even worse, with 40-pound cases going for a whopping $100, compared to just $15 last year. The graph to the right is a U.S. Department of Agriculture graph, republished by the Huffington Post, which demonstrates the price spike.

This price elevation is mainly due to the age-old relationship between supply and demand. Supply is down because of a disease, huang long bing, also called “Yellow Dragon,” that has hit lime trees in the Yucatan and is spreading to other regions, such as the high export state of Veracruz. Unusually harsh rains in November and December also diminished lime yields because of damage inflicted to lime blossoms. Demand, however, has remained stable and is even increasing, particularly with the Americanized Cinco de Mayo holiday just around the corner.

The panic, however strong in Denver, seems all the more real in New York City, where some people are growing their own in order to avoid the shortage and even profit from it. Things are getting even scarier in the Mexican state of Michoacán, where the conflict is coming to a head. The violent Knights Templar Cartel has been threatening and attacking local farmers, taking their limes and their lands hostage in order to take advantage of elevated lime prices.

Image Source: Latin Post/Getty Images/Joe Raedle

Forty pound cases of limes are selling for $100 each. Image Source: Latin Post/Getty Images/Joe Raedle

An interesting twist to this story is that a handful of farmers and laborers in Michoacán have taken up arms to protect their families and their livelihoods, forcing the Knights Templar to retreat out of the area. Some speculate that this could lead to revolution on a larger scale, particularly as people who had migrated to the United States return home to combat the cartel. Hopefully, this conflict will demonstrate to Americans that even the seemingly inconsequential decision of garnishing their beverage of choice with a lime wedge can lead to striking consequences abroad.

 

Katie McAuley is a 2L, a Staff Editor for the Denver Journal of International Law and Policy and the incoming Candidacy Editor.

Posted in 1TVFA Posts, 2Featured Articles, DJILP Staff, Katie McAuleyComments (4)

wind farm

Aligning International Trade with Sustainable Development

The New York Times Editorial Board recently published an article explaining the need for greater transparency and stricter environmental regulations in trade agreements. The Times missed the opportunity to explain the history of international trade and investment agreements and their tenuous relationship to sustainable development.

With globalization has come greater intergovernmental cooperation, increased trade, and a widening global middle class. However, globalization has also created greater environmental degradation, increased emissions of greenhouse gases, and the exploitation of labor in developing countries. Given the positive and negative consequences associated with globalization, governments and non-governmental organizations have acknowledged the need to align global trade with sustainable development. Recent bilateral investment treaties and model investment treaties have acknowledged sustainable development as a primary objective. Yet the trend towards large multilateral trade agreements has cast doubt on whether sustainable development will remain a priority.

wind farm

Meeting the world’s rising energy demand through sustainable means will require strategic global investment (UN)

Bilateral investment treaties proliferated during the 1970s through 1990s. Developing nations entered into these treaties under the theory known as the Washington Consensus: that allowing foreign investment and lowering trade barriers would ultimately lead to economic growth, raise quality of life, and reduce poverty. Developing nations became wary of this logic once the perils of a free-market became apparent and investors pulled out of regions following a rise in wages. These countries have begun incorporating greater protections on human rights and the environment in addition to acknowledging the right of the State to legislate in the best interest of the public.

There is some doubt as to the efficacy of bilateral investment treaties for attracting investment. There is scant data showing that they increase investment, and little that they do to enforce obligations. The Trans-Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (TTIP) illustrate the trend towards homogenizing trade regulation through multilateral agreements. While this is generally positive for international trade, concerns remain.

The TPP has been negotiated in secret, and what has leaked has caused concern for many observers. It seems that a predominant goal is to lower trade barriers while protecting the interests of large companies. Investor protection provisions demonstrate how companies may challenge legitimate regulations made for environmental or ecological concerns. Additionally, while environment and human rights have been addressed in negotiations, those issues have not been a priority and there is little to suggest that they will get the robust enforcement needed.

For sustainable development to remain a priority in international trade, there must be a concerted effort to weave the principles of sustainability into the purpose of multilateral trade agreements. However, this is not sufficient to ensure sustainable development will continue. Local governments must hold businesses accountable to their communities and resist a race to the bottom. Most importantly, businesses must commit to sustainable development in practice and not simply pay it lip service. Such action will result in a mutually beneficial relationship between businesses and the communities in which they operate.

 

Alex Milgroom is a 3L at the University of Denver and the Online Editor-in-Chief of the Denver Journal of International Law and Policy

***

This article is based on an academic paper by the author available here.

 

Posted in 1TVFA Posts, 2Featured Articles, Alex Milgroom, DJILP StaffComments (0)

Critical Analysis: Economic Espionage and International Law

Economic espionage involves a state’s attempts to covertly acquire trade secrets held by foreign private enterprises. Many countries have long considered economic espionage important to national security and economic development. Several economic trends have escalated the risk and prevalence of trade secret theft, including the globalization of trade and interconnected supply chains, the growing important of innovation and information technology to competitiveness, and the rise of overseas markets as a critical source of production and economic opportunity. Advancements in technology, increased mobility, rapid globalization, and the anonymous or pseudonymous nature of the Internet create growing challenges in protecting trade secrets. This is a cause for concern in countries worldwide, and is increasingly a point of contention in diplomatic and trade relations between countries. General Keith Alexander has said that the bleeding of industrial information and intellectual property via cyber espionage represents the “greatest transfer of wealth in history.”

Firms feel that China poses one of the highest threats of IP theft

Firms feel that China poses one of the highest threats of IP theft

Worldwide, cyber espionage cost an estimated $1 trillion in expenses last year alone. On average, trade secrets are worth two-thirds of a company’s information portfolio. For knowledge-intensive industries, trade secrets are worth even more—up to 70 to 80 percent more, on average. Intellectual property theft costs American companies $250 billion annually, while cyber crime rings in at more than $338 billion total. That means, on a yearly basis the annual theft of intellectual property from U.S. businesses is worth nearly the same amount as the current value of exports to Asia. A European Commission study shows that over the past ten years, approximately twenty percent of responding European companies has experienced at least one attempted or successful theft, and nearly forty percent of responding companies believe that they are more at risk in the past ten years than ever before. In 2007, Japan’s Ministry of Economy, Trade, and Industry conducted a survey of 625 manufacturing firms and found that more than thirty five percent of those responding reported some form of technology loss. South Korea approximates economic espionage damage has more than tripled from 2004 to 2008. Sixty percent of these victims are reported to be small- and medium-sized businesses. Germany’s Federal Office for the Protection of the Constitution appraises the value lost by German companies to be between $28 billion-$71 billion annually due to foreign economic espionage. Economic espionage also costs Germany between 30,000 and 70,000 jobs per year. A Canadian report claimed in 2010 that eighty six percent of large Canadian corporations had been victimized, and that cyber espionage against the private sector had doubled in the past two years. The United Kingdom estimates that attacks on computer systems, including industrial espionage and theft of company trade secrets, cost the private sector $34 billion annually, of which more than forty percent represents theft of intellectual property such as designs, formulas, and company secrets.

There is no international treaty specifically governing economic espionage. The desire to combat economic cyber espionage confronts a lack of international law on espionage and economic espionage. Although a victim country could assert that spying violates the principles of sovereignty and non-intervention, state practice has accepted state-sponsored espionage such that these appeals are not serious claims. International trade law, however, does provide a minimum for protection of trade secrets as an intellectual property right. In particular, trade negotiations and dialogues can offer effective means to elevating the importance of trade secrets protection, raising global standards, and promoting more effective deterrence. Under the World Trade Organization’s (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement), WTO members are required to protect intellectual property rights, which include trade secrets. TRIPS Article 39 requires WTO members to protect undisclosed information that is secret, is commercially valuable because it is secret, and has been subject to reasonable steps to be kept secret. The TRIPS Agreement also requires that members make available civil judicial procedures concerning the enforcement of any intellectual property right covered by the Agreement. Also, TRIPS allows  “criminal procedures and penalties to be applied in other cases of infringement of intellectual property rights, in particular where they are committed willfully and on a commercial scale.” Aside from failing to enforce its own laws, a government may be pursuing an “indigenous innovation policy,” in which tech handovers are a prerequisite to market entry. For example, the Chinese government has measures and policies that condition market access or investment in China on the transfer of intellectual property from foreign to domestic entities.

Global firms feel that the threat of cyber espionage and trade secret theft are higher coming from China, Pakistan, Russia, and India than from the rest of the world because of corruption and inadequate protections for intellectual property. According to a survey by the U.S. International Trade Commission (ITC), only 0.6 percent of U.S. firms that reported material losses due to trade secret theft between 2007 and 2009 in China pursued any trade secret misappropriation proceedings in China due to imprecise standards, a lack of deterrent penalties, and a host of procedural difficulties. Only an average of thirty percent of trade secret cases brought in Shanghai Higher People’s Court reach conclusions and fewer than half of those result in findings of infringement. The most troubling form of economic espionage is state-sponsored espionage that obtains information from private-sector companies located outside their territories.

Even if there were a clear rule that a victim could show was being violated, the victim nonetheless has to establish the identity of the responsible party. WTO cases have yet to involve accusations against government-sponsored espionage, so the difficulty of doing so is untested, and therefore unpredictable. It is not clear that a WTO member could satisfy this burden by relying on evidence from private-sector entities such as The Mandiant Report and without revealing counter-intelligence means and methods. This is why the state privilege justification of “national security” can sometimes be a bigger burden than a benefit. It is invoked often, and the public has no way of determining the feasibility of the claim. The general public has no idea what their government is doing in the name of national security because it is classified. Therefore, challenging a government’s cyber espionage is particularly difficult because a government will be reluctant to hand over classified information that can be used as evidence against it, and it will claim national security as the basis for withholding such information. Additionally, a government’s participation in spying sends the message that economic espionage is acceptable and lawful in that country, which companies think means that there can be no state responsibility under international law.

The U.S. is currently negotiating two major trade agreements. The Trans-Pacific Partnership Agreement (TPP), which involves 11 other countries in the Asia-Pacific region, and The Trans-Atlantic Trade and Investment Partnership (T-TIP) with the EU both afford opportunities for cooperative advancements in the protection of trade secrets that would help to establish a stronger and more uniform standard worldwide. The U.S. has also been talking with China about a Bilateral Investment Treaty, which allows equitable standards, a better market access for investors, and a forum for dispute resolution between countries. These kinds of talks are definitely a step in the right direction, but it is going to take more than that to establish a norm workable on a widespread level. Time is not something that the economy can afford though, with the ever-increasing expenses caused by escalating cyber snooping and violations of intellectual property rights.

Katelynn Merkin is a 2L at the University of Denver and staff editor on the Denver Journal of International Law and Policy

Posted in 1TVFA Posts, 2Featured Articles, DJILP Staff, Katelynn MerkinComments (0)

Critical Analysis: U.S. Federal Government Shutdown Impact on International Exports

As we wrap up week one of the federal government shutdown, impacts on international exports are being felt in a major way.  Visit the Department of Commerce’s Bureau of Industry and Security (BIS) website and you find the following disclaimer:

The Federal Government is currently shut down due to a funding lapse. As a result, the Department of Commerce’s Bureau of Industry and Security (BIS) is no longer accepting export license applications, classification requests (CCATS), encryption reviews, encryption registrations, or advisory opinion requests. Similarly, BIS will not be issuing any final determinations. The SNAP-R application on BIS’s Website is not available and will not reopen until the Federal Government shutdown ends. All pending export license applications, commodity classification requests, encryption reviews, encryption registrations, and advisory opinion requests will be held without action by BIS until the shutdown ends.

A similar notice appears on the State Department’s Directorate of Defense Trade Control (DDTC) website.

The Federal Government shutdown is having a significant impact on U.S. trade with foreign countries.  Photo: Bloomberg

The Federal Government shutdown is having a significant impact on U.S. trade with foreign countries.
Photo: Bloomberg

The two agencies process various types of export licenses for military and dual-use goods (goods with both a military and commercial use).  These goods include everything from military vehicles and ammunition to composite structures and computer processing chips.  Given the large military/dual-use industry in Colorado, Ball Aerospace, Lockheed Martin, Jeppesen, etc., it seems appropriate to look at the potential impact the shutdown will have on international trade and local Colorado companies.

The grant of export licenses is nearly at a standstill with the exception of those “emergency licenses” needed to support ongoing combat and contingency missions.

In 2012, BIS processed 23,229 export licenses requests and the DDTC processed 89,650 between September 2012-September 2013; equating to 112,879 licenses total.  Based on these numbers, the two departments process approximately 2,170 licenses a week.  On average, it takes both the agencies 12-15 business days to process and respond (grant, return without action, or deny) the requests.  Each day that the government remains shutdown, the number of license requests sitting in the backlog grows.  In turn, companies are unable to ship goods until a budget is passed, funds are appropriated, and the backlog is depleted.

International customers are becoming frustrated because U.S. companies cannot provide accurate lead times for the shipment of goods.  These customers, who are arguably already frustrated by the high level of regulation of military and dual-use items, will start looking outside of the U.S. for companies who can ship a competing product in a timely fashion.  Further, this standstill has created a significant slow down in sales of military/dual-use products.  U.S. companies struggling to obtain export licenses during the shutdown have expressed concern for profitability and stock prices, especially as many companies are wrapping up their final fiscal quarter.

Exports make up $2.196 trillion of the $15 trillion U.S. economy.  If the government remains shutdown for much longer, it will have a significant impact on companies’ bottom line, the U.S. economy, and international market relations.  In the short term, companies’ final quarter will experience a decline in their international exports, which will ultimately affect a large portion of the U.S. economy.  In the long term, companies risk losing international customers who have found competitors outside of the U.S. and the international opinion of the U.S. military/dual-use market will be further compromised.

Alicia Guber is a 2L and the Alumni Editor on the Denver Journal of International Law and Policy.

Posted in 1TVFA Posts, 2Featured Articles, Alicia GuberComments (0)

Critical Analysis: The Trans-Pacific Partnership and its Discontents

Not everyone likes trade agreements

President Obama is touting the Trans-Pacific Partnership (TPP) as a 21st Century trade agreement, a model for everything from industrial goods to Internet services. The principal purpose of which, like the North American Free Trade Agreement (NAFTA), is to increase trade and remove restrictions on the flow of goods and capital between member states. So far, the negotiations include the U.S., Australia, New Zealand, Malaysia, Brunei, Singapore, Chile, Peru, and Vietnam. Last week, President Obama and U.S. Trade Representative Ron Kirk announced to Congress that Canada and Mexico, the U.S.’ largest trading partner and second largest export market respectively, will join the negotiations as well.

The 13th round of talks concluded this week on July 10th in San Diego after a week of negotiations, with many officials lauding “significant progress” on issues from copyright protection, agriculture products, state-owned enterprises, and financial services. Once an agreement is reached, it is poised to become a trading bloc representing 686 million people and with a total GDP of $20.5 trillion.

The prospect of increased profits and jobs notwithstanding, 132 Congressmen wrote to U.S. Trade Representative Ron Kirk expressing their concern that the negotiations lack transparency. Congressman Darrell Issa, a Republican from the San Diego area and Chairman of the House Oversight and Government Reform Committee, sought to attend the talks in San Diego (a rare request from a Congressman) but was denied access to anything beyond generic public events. As with most trade agreements, the negotiations occur behind closed doors with very few given access to the agreement’s text until it is finished. Congress, however, believes that in such a large and unprecedented trade agreement, too much is left in the hands of negotiators and the 600 special interest lobbyists who do, in fact, have access to and influence over sensitive negotiations materials.

A “Stop TPP” demonstration was organized to bring attention to the treaty negotiations through an ambitious array of protest marches, rallies, press conferences and teach-ins. The coalition included union leaders, Occupy San Diego, Public Citizen, and Global Trade Watch. The AFL-CIO has also voiced its opposition to the TPP. Their concern? Again, that special interests and corporate lobbyists are selling America’s future (and their jobs) across the Pacific for the sake of increased profits.

Although the TPP is far from finished, it is gaining notoriety especially since Canada and Mexico became negotiating partners. At the moment, Japan and South Korea have observer status, however; it is likely these two countries will also join in the near future. The TPP may one day encompass the entire pacific-rim with the exception of – you guessed it – China. China has not been invited to join the talks, nor do the current negotiating parties plan on extending one. Many see this is an American move to contain China economically. Whatever the motive, China’s absence does give one pause. And it does make one think that profits are not the only motive involved.

 Michael Cox is a rising third-year law student at the University of Denver, a Senior Editor for the View From Above, and a Candidacy Editor for the Denver Journal of International Law and Policy.

Posted in 1TVFA Posts, 2Featured Articles, DJILP Staff, Michael CoxComments Off on Critical Analysis: The Trans-Pacific Partnership and its Discontents

University of Denver Sturm College of Law

Posts by Date

June 2018
M T W T F S S
« May    
 123
45678910
11121314151617
18192021222324
252627282930  
Resources