Author: Simon Lester

WTO DG Pascal Lamy makes some interesting points (as he often does) in his recent speech on trade and human rights.  Here are the ones that jumped out at me (quoted portion indented), with some quick comments. 

1. Good governance and transparency are essential for trade.

What role do human rights play in trade? First, civil and political rights are a key ingredient of good governance, which in turn is essential to the proper conduct of trade relations. Freedom of expression, for example, brings transparency, one of the core principles of the world trading system. 

My sense is that "transparency" is almost universally accepted, and not particularly controversial.  On the other hand, "good governance" is one of those vague terms that sounds great in theory, but in practice can lead to some disagreement about the burdens imposed on domestic regulation.

2. Trade measures are used to promote human rights.

How can trade help promote human rights? I would start by noting that trade measures are the most commonly used instrument in developed countries to put pressure on states violating human rights.

That is probably true, with selective purchasing laws and conditions on trade preferences being two examples. It is not clear whether all such measures are permitted under WTO rules, though. 

3. The WTO's purpose is to "regulate" trade

The primary vocation of the WTO is to regulate, not to deregulate trade as is often thought. By putting in place rules to regulate trade flows and remove trade distortions, the WTO aims to create a global level playing field, where fairness is the rule and where the rights of individual members are safeguarded.

I'm not sure either of these terms, "regulate" or "deregulate," is particularly helpful in describing the WTO's purpose.  Actually, I think this recent statement by the Appellate Body in China – Publications was pretty good in this regard:

222. We read the phrase "in a manner consistent with the WTO Agreement" as referring to the WTO Agreement as a whole, including its Annexes. We note, in this respect, that we see the "right to regulate", in the abstract, as an inherent power enjoyed by a Member's government, rather than a right bestowed by international treaties such as the WTO Agreement. With respect to trade, the WTO Agreement and its Annexes instead operate to, among other things, discipline the exercise of each Member's inherent power to regulate by requiring WTO Members to comply with the obligations that they have assumed thereunder. When what is being regulated is trade, then the reference in the introductory clause to "consistent with the WTO Agreement" constrains the exercise of that regulatory power such that China's regulatory measures must be shown to conform to WTO disciplines.  (emhphasis add)

So it's not that the WTO "regulates" or "deregulates" trade, but rather it "disciplines the exercise of each Member's inherent power to regulate."  As the Appellate Body's statement indicates, it is governments that regulate trade.  As for the WTO, rather than regulating trade, it regulates governments' regulation of trade. 

Of course, in restricting domestic regulation in this way, it is, to some extent, deregulating trade.  Thus, you could argue that the WTO's impact is closer to "deregulating" than "regulating."

(Did any of that make sense?  I'll try again on that one some other time.)

4. Trade requires redistribution of wealth and "safeguards."

While trade can promote development and contribute to the reinforcement of human rights, it is not a panacea. Trade liberalization can entail social costs. To be successful, the opening of markets requires solid social policies to redistribute wealth or provide safeguards to the men and women whose living conditions have been disrupted by evolving trade rules and trade patterns.

This is what I have called the “Geneva consensus”, under which the opening of markets is necessary to our collective well-being, but does not suffice in itself.

It does not suffice unless strong safety nets help correct the imbalances between winners and losers at the national level. …

I'm not sure how much "consensus" there is about the "Geneva consensus."  Many countries probably agree with this as a general principle, but the implementation will likely vary to a great degree and cause a good deal of conflict.  For example, company bailouts are a form of social safety net, but they also cause concern among trading partners.

***

Putting all those minor criticisms aside, let me just note that I enjoy Pascal Lamy's speeches quite a bit.  He is not afraid to take on complex and controversial issues, which is not always the case for someone in his position.

The Appellate Body is proposing some amendments to its Working Procedures (Word Doc):

We propose the following three amendments to the Working Procedures: 

 

· First, we suggest that an appellant's written submission be filed when an appeal is commenced, namely, on the same day as the filing of a Notice of Appeal, and that all other deadlines for written submissions, the Notice of Other Appeal and third-party notifications be advanced accordingly. 

 

· Secondly, we propose to explicitly authorize, subject to certain conditions, the electronic filing and service of documents.  

 

· Thirdly, we propose to introduce a procedure for consolidating appellate proceedings where two or more disputes share a high degree of commonality and are closely related in time. 

They explain the reasons in detail in the document.  I don't see anything too controversial in there, although I suppose some Members might object to having to file appellants' submissions earlier.

From the FT:

Huawei Technologies, the Chinese telecoms equipment company, is to make a $500m investment in its research and development operations in the southern Indian city of Bangalore as part of an effort to avoid falling foul of tension between New Delhi and Beijing.

Max Yang, Huawei's India chief executive, said his company was making efforts to have its local operations seen more as an Indian operation in an attempt to dispel a "mystique" impeding its business.

…

It would also open a manufacturing unit in India that would help it avoid steep anti-dumping duties on Chinese goods.

Google's possible exit from China is all over the news.  Are there any trade issues in there?  Possibly:

Lawyers said that Google and the US might have a legal basis for suing China at the World Trade Organisation, a move that would further complicate relations between Washington and Beijing.

…

According to lawyers, the US could argue that Beijing’s censorship in effect discriminated against foreign services such as Google, contrary to its commitments under the General Agreement on Trade in Services (Gats).

“If China imposes harsher web filtering restrictions on Google than on local search engines, such as Baidu, Google may have a WTO discrimination claim,” said David Spooner, a former assistant secretary of commerce, now at the law firm Squire Sanders & Dempsey.

The outcome of a case would depend on how a WTO dispute resolution panel classified search engines. Much of the WTO law addressing internet services and online products is unclear. The last global trade agreement was negotiated in the early 1990s when the technology was in its infancy. But trade experts said a succession of rulings had narrowed governments’ room for manoeuvre, and particularly their ability to use national security or the protection of public morals as defence for censoring words and images on the web.

Gary Horlick, a leading international trade lawyer, said: “We will have to know a lot more about the facts, especially what the [Chinese] government is doing, but the Gats has a lot of unexplored obligations which might protect Google."

Here is an ASIL Insight I did on the Seal Products dispute, previewing the legal issues.  (Keep in mind that I only had 2,000 words, so it's a fairly brief preview!)  An excerpt:

One might expect that core WTO principles, such as non-discrimination and necessity, would have clear legal standards. However, trade adjudicators have gone back and forth over the years on the issue of non-discrimination, while the “necessity” standard has evolved and has yet to be examined in the TBT Agreement context. There is a great deal of uncertainty as to how a WTO panel would address these issues in the context of the seal products ban in dispute. Thus, the outcome of a panel dispute would be far from sure.

In related news:

Canadian Inuit have filed a lawsuit in the European General Court to overturn EU legislation which would ban the import of seal products into EU countries. The lawsuit seeks annulment of Regulation (EC) No 1007/2009 of the European Parliament and Council of September 16, 2009 on trade in seal products.

 

I'm not sure I'm reading this correctly, but there may be a peaceful resolution to the clove cigarette ban controversy (see here and here for background):

 Kretek International Inc., importer and marketer of Djarum clove cigars, withdrew its lawsuit against the U.S. Food and Drug Administration (FDA) regarding the distribution and sale of clove cigar products, following statements by the agency indicating it will only take enforcement action against products that meet the legal definition of a cigarette.

Kretek in September 2009 filed the lawsuit in the U.S. District Court for the District of Columbia, seeking a declaration that a ban on flavored tobacco products applied to cigarettes rather than to cigars. Then, on Dec. 23, 2009, the FDA placed a question and answer document on its Web site regarding the regulation of flavored tobacco products, which Kretek said makes it clear that the FDA will only be taking enforcement actions against tobacco products that meet the legal definition of a cigarette. 

The U.S. Department of Treasury already determined that Djarum clove cigars meet the legal definition of a cigar, and as such, the FDA's document provided Kretek with the assurances it was seeking through its lawsuit, the company stated. Because of this, Kretek decided to drop its legal action, while reserving its option to re-file at some future date.

"FDA's Q&A will benefit the entire industry," Kretek CEO Mark Cassar said in a statement. "We did not want to see three years of cigar product development negated by a hasty interpretation of the ban on flavored tobacco products and I am pleased that the agency has not only taken the time to get this issue right, but has also decided to share its views with the entire industry." 

So is that it?  Clove cigarette producers/importers can just repackage them as cigars in order to import them, and the dispute is resolved?  I don't know, that all seems too easy.

 

There's some disagreement as to whether weak labor laws are used by certain countries to attract foreign investment (or at least, they have that effect, even if it is not their goal).  Some critics of trade agreements say that weak labor laws in some countries leads to unfair trade, as it is difficult for companies in industrialized countries to compete with companies in the developing world whose labor costs are much lower.  By contrast, others contend that the evidence does not show this is a significant factor companies take into account when choosing a location.

I tend to think it is a factor, but just one of many.  Here's some anecdotal evidence from the domestic context that it can have an impact.  From the Economist:

In 1983 Nissan became the first foreign carmaker in America’s South when it opened an assembly plant in Smyrna, Tennessee. Other Asian and European automakers soon arrived, bypassing Detroit for Dixie and building factories in Kentucky (Toyota), Alabama (Honda, Mercedes-Benz, Toyota, and Hyundai), Mississippi (Nissan), Texas (Toyota again) and South Carolina (BMW). A common attraction in each of the states was the anti-trade-union climate.

Now the aircraft industry is following suit. Late last autumn Boeing announced it would build a second assembly line (the first is in the Seattle suburb of Everett, Washington) for its 787 Dreamliner jet in North Charleston, outside the lovely old city of Charleston. The company chose to put its $750m factory in South Carolina because it was determined to distance itself from a fractious labour union in Everett. Machinists there went on a 57-day walkout in 2008 that cost the company more than $2 billion and led some airlines to switch their orders to Europe’s Airbus.

…

South Carolina has one of the lowest rates of unionisation in the country. Amazingly, according to the US Bureau of Labour Statistics, not a single work day was lost to strikes in the state in 2008. And workers who currently make 787 parts at another Boeing factory in North Charleston voted in September to cut their links to the International Association of Machinists.

…

Mr Woodward reckons that South Carolina and other southern states, which have laws against union closed shops and relatively low labour costs, are a template that could help America retain at least some of its shrinking manufacturing base.

So this article demonstrates that weak labor laws attract investment, right?  Well, maybe.  There's also this:

Details of the estimated $450 million incentive package that South Carolina has promised Boeing Co. could draw international attention as fodder in a long-running trade dispute between the aviation giant and its European rival, Airbus.

…

Airbus Americas chairman Allan McArtor views the South Carolina incentive deal differently.

"Of course it's a subsidy!" McArtor said in an written statement about the offer. He said that it will be up to the European Union to pursue further action.

Boeing was not identified by name in the special legislation that lawmakers passed in October to win the assembly plant, but the bill made certain incentives available to companies that generate more than 3,800 jobs and invest more than $750 million during a seven-year span.

Boeing has said it plans to meet those thresholds.

So which is it?  Weak labor laws?  A $450 million subsidy?   A little of both?

As the second article notes, subsidies are covered by international trade rules.  Should weak labor laws be covered, too?  They are covered in some recent FTAs, but as discussed just the other day, it's not clear whether existing WTO rules can do much here.

As a final point, there's an interesting "specificity" issue:  "Boeing was not identified by name in the special legislation that lawmakers passed in October to win the assembly plant, but the bill made certain incentives available to companies that generate more than 3,800 jobs and invest more than $750 million during a seven-year span."

From Jeff Jacoby of the Boston Globe:

Free trade isn’t a battle that countries (or states) win or lose. It is a human right – the liberty to engage in voluntary transactions that leave both participants better off. If John wants to sell something that Mary wants to buy, it should make no difference to the lawfulness of their exchange whether they are residents of different neighborhoods, different states, or different nations.

Compare this with the Appellate Body's recent statements in China – Publications on the "right to regulate trade":

221. Thus, our analysis so far suggests that the phrase "China's right to regulate trade" is a reference to China's power to subject international commerce to regulation. As explained above, this power may not be impaired by China's obligation to grant the right to trade, provided that China regulates trade "in a manner consistent with the WTO Agreement".

222. We read the phrase "in a manner consistent with the WTO Agreement" as referring to the WTO Agreement as a whole, including its Annexes. We note, in this respect, that we see the "right to regulate", in the abstract, as an inherent power enjoyed by a Member's government, rather than a right bestowed by international treaties such as the WTO Agreement. With respect to trade, the WTO Agreement and its Annexes instead operate to, among other things, discipline the exercise of each Member's inherent power to regulate by requiring WTO Members to comply with the obligations that they have assumed thereunder. When what is being regulated is trade, then the reference in the introductory clause to "consistent with the WTO Agreement" constrains the exercise of that regulatory power such that China's regulatory measures must be shown to conform to WTO disciplines.

In the comments, Susan Aaronson says:

The WTO does not cover labor standards explicitly, but policymakers who are concerned about the trade spillovers of China’s labor laws have leverage on China. China recently reformed its labor laws, and it did so in a transparent accountable manner at the national level. However, observers note the labor laws are rarely enforced. Labor laws have implications for the international terms of trade and for the well-being of import-competing firms. If a government ignores its own labor laws, it is effectively allowing its labor intensive firms to become more cost competitive with imports. As economist Drusilla Brown has noted, if the country has international market power (as does China), the contraction in the demand for imports will also reduce the world price of imports, giving rise to a terms-of-trade improvement. If governments attempt to achieve a strategic advantage through their labor standards they are effectively nullifying market access for some of their trade partners. Under GATT Article XXIII, any country in the WTO is entitled to "right of redress" for changes in domestic policy that systematically erode market access commitments even if no explicit GATT rule has been violated. Used creatively, this strategy could enable WTO member states to encourage China to do a better job of enforcing its labor laws.

I look forward to comment.
Susan Aaronson, GWU

I assume she is talking about the "non-violation" complaint in GATT Article XXIII:1(b).

The basic elements of a non-violation claim are: "(1) application of a measure by a WTO Member; (2) a benefit accruing under the relevant agreement; and (3) nullification or impairment of the benefit as the result of the application of the measure."  (Japan – Film, para. 10.41)

Application of a measure is a little tricky, but I think the "act of omission" involved in not enforcing labor laws would satisfy this.

One part of the benefit accruing element should be easy to satisfy.  Just pick one or more tariff concessions.  However, there's more to it.  The Film Panel explained that under past GATT precedent, in all but one case, "the claimed benefit has been that of legitimate expectations of improved market-access opportunities arising out of relevant tariff concessions." Under that precedent, for expectations to be legitimate, "they must take into account all measures of the party making the concession that could have been reasonably anticipated at the time of the concession."  (Para. 10.61)  Thus, you would have to show that the lack of enforcement could not reasonably have been anticipated at the time of the concession.

The third element also presents a problem.  The Film panel elaborated on the nullification or impairment … as the result of element as follows:  "it must be demonstrated that the competitive position of the imported products subject to and benefiting from a relevant market access (tariff) concession is being upset by ('nullified or impaired … as the result of') the application of a measure not reasonably anticipated."  (Para. 10.82)  So, you would have to show "nullification or impairment" that is caused by the absence of labor law enforcement (rather than something else).

My sense is the claim would fail on the second and third elements.  It would be hard to prove that lack of enforcement could not reasonably have been anticipated; and proving causation in relation to undermining market access for specific products could be difficult.

Any other thoughts? 

Sometimes there's a fine line between protectionism and promoting the domestic economy.  From Bloomberg:

The Obama administration today announced that 183 companies, including PPG Industries Inc. and Itron Inc., will get a total of $2.3 billion worth of tax credits for clean-energy manufacturing projects in 43 states.

The tax credits are part of the $787 billion stimulus President Barack Obamapushed through Congress last year, and announcement of the companies that got the credit coincides with a Labor Department report that the U.S. lost 85,000 jobs in December.

The projects getting the tax credit are forecast by the administration to create more than 17,000 jobs.

“Building a robust clean-energy sector is how we will create the jobs of the future — jobs that pay well and can’t be outsourced,” Obama said in remarks today at the White House.

Obama said that, while the U.S. has “pioneered the use of clean energy,” it is being “outpaced” by countries including China, Germany and Japan.

“I don’t want the industries that yield the jobs of tomorrow to be built overseas,” he said. “I don’t want the technology that will transform the way we use energy to be invented abroad.”

Here is an excerpt from Obama's remarks noted in the article:

And unfortunately, right now the United States, the nation that pioneered the use of clean energy, is being outpaced by nations around the world.  It’s China that has launched the largest effort in history to make their economy energy efficient.  We spearheaded the development of solar technology, but we’ve fallen behind countries like Germany and Japan in producing it.  And almost all of the batteries that we use to power our hybrid vehicles are still manufactured by Japanese companies or in Asia — though, because of one of the steps like the one we’re taking today, we’re beginning to produce more of these batteries here at home.

Now, I welcome and am pleased to see a real competition emerging around the world to develop these kinds of clean energy technologies.  Competition is what fuels innovation.  But I don’t want America to lose that competition.  I don’t want the industries that yield the jobs of tomorrow to be built overseas. I don’t want the technology that will transform the way we use energy to be invented abroad.  I want the United States of America to be what it has always been — and that is a leader — the leader when it comes to a clean energy future.

This all raises some questions for me:  How should governments approach the goal of clean energy?  Should they treat this as a national competition that they want domestic companies to win?  If so, how should they talk about the issue publicly?  Does talking about it as a competition cause trade conflicts?  Would it be better to promote the consumption of clean energy, rather than giving aid to specific producers?

It may be a mistake to make this too much of a national competition, as international cooperation seems to have an important role to play as well:

A U.S. solar power company said Saturday it will help build a series of solar thermal power plants in China, as the world's biggest emitter of greenhouse gases tries to decrease its heavy reliance on coal, imported gas and oil.

California-based eSolar Inc. will provide Shandong Penglai Electric Power Equipment Manufacturing Co. with the technology and information to build the concentrated solar thermal power farms with a capacity totaling 2,000 megawatts.

I've always thought that, in theory, import safety and global trade rules shouldn't come into conflict, and that many of the suggestions to the effect that WTO rules restrict what governments can do are exaggerated.  On the other hand, in practice, things can be more complicated, and maybe there is something to at least some of the concerns.

Perhaps even more difficult than compatibility with trade rules, though, is implementing safety regulations that are effective in a globalized world.  Here's a new book that addresses these issues:

Import Safety: Regulatory Governance in the Global Economy (Cary Coglianese, Adam Finkel, and David Zaring, editors)

On World Food Day in October 2008, former president Bill Clinton finally accepted decade-old criticism directed at his administration's pursuit of free-trade deals with little regard for food safety, child labor, or workers' rights. "We all blew it, including me when I was president. We blew it. We were wrong to believe that food was like some other product in international trade." Clinton's public admission came at a time when consumers in the United States were hearing unsettling stories about contaminated food, toys, and medical products from China, and the first real calls were being made for more regulation of imported products. Import Safety comes at a moment when public interest is engaged with the subject and the government is receptive to the idea of consumer protections that were not instituted when many of the Clinton era's free-trade pacts were drafted.

Written by leading scholars and analysts, the chapters in Import Safety provide background and policy guidance on improving consumer safety in imported food, pharmaceuticals, medical devices, and toys and other products aimed at children. Together, they consider whether policymakers should approach import safety issues through better funding of traditional interventions–such as regulatory oversight and product liability–or whether this problem poses a different kind of governance challenge, requiring wholly new methods.

From a Q & A with one of the editors:

Q:  In the U.S., we’re accustomed to dealing with safety issues in domestic products, whether through regulation, recalls, or litigation. But you suggest that the systems we’ve created to address domestic product safety issues are inadequate to solve the safety challenges that result from globalization. Why is that?

A:  Although consumers can be harmed just as much by domestic products as by imports, the import safety problem raises a variety of jurisdiction, legal, cultural, political and practical issues that are not present with domestically produced products and their regulation. In the past, most consumer products have come from manufacturers based in the same country and jurisdiction as the consumers who are buying those products and might ultimately be harmed by them. With globalization, the regulatory challenge is much more difficult. We can’t rely on recalls, since that only captures a small portion of safety problems, and of course only after some damage may already have occurred. Given the sheer volume of imported goods, we can’t rely on inspections, since regulators can’t inspect even a small portion of imported products. And we can’t rely on private litigation, in part because the courts’ authority can’t always reach manufacturers abroad. In many cases, just identifying the producers of ingredients and products in other countries poses daunting challenges.

From the NY Times:

Is the National Football League a single entity, or a collection of 32 teams that compete against one another every week?

The question forms the core of an antitrust case that will be heard by the United States Supreme Court next week. How the court rules could shake some pillars of sports law by reshaping the definition of a sports league, which would in turn affect professional leagues, teams and players, as well as the constellations of companies that do business with them.

I'm curious if any of our readers know how the EU (or other jurisdictions) have dealt with this issue.  Any thoughts?

Don Boudreaux is the anti-Krugman on Chinese currency issues.  In this piece, he first explains that "a lower-priced yuan causes Americans to buy fewer U.S. products and more Chinese products."  Then, assuming arguendo — more on arguendo assumptions soon in relation to the China – Publications AB report – that "the Chinese government does in fact keep the price of the yuan artificially low," he asks: "Does this policy help the Chinese and harm Americans?"

He answers:

A low-priced yuan certainly shifts business to some Chinese producers and away from American producers who compete with them, …

But, he says:

contrary to protectionists’ claims, Beijing’s efforts to lower the price of the yuan harms the Chinese economy and benefits the economies (including that of the United States) whose people trade with the Chinese.

I'm not sure I completely followed his rationale for this conclusion (feel free to take a look and try to convince me).   More generally, though, I think Boudreaux would analogize currency undervaluation to subsidizing exports, both of which he would say are bad for the exporting country, but good for the country doing the importing.  In essence, he is saying that the benefits to consumers in the importing country outweigh the harms to specific producers in the importing country.

One thing I wonder is this.  I know he thinks the benefits to the U.S. mean that we should be happy with this kind of policy by foreign governments.  But in terms of global welfare, does he think the world as a whole is better or worse off with this kind of policy?

Not by me.  I've tried predicting things before on this blog, without much success.  But trade lawyer Scott Lincicome is willing to give it a shot.  Here are his predictions (for his rationale for each one, check his blog here):

Low Hanging Fruit

(1) The WTO's Doha Round won't collapse entirely, but it also won't be any closer to completion. 2011 will become the new target date (for whatever that's worth).  …

(2) There will be no change to US farm and "green energy" subsidy policies.  …

(3) Bilateral and regional FTAs will continue at a furious pace across the world, but (4) new US negotiations under the Trans-Pacific Partnership (TPP) Framework will be interminably slow.  …

(5)  There will be no "trade war" between the United States and China.  …

50/50s

(1) 2010 will see a significant increase in anti-subsidy actions under domestic trade laws and WTO rules.  …

(2) Congress will approve none of the pending US FTAs.  …

(3) Eco-protectionism will increase around the world.  …

Total Shots in the Dark

(1) The failure of Cap and Trade in the Congress will cause the EPA to begin reviewing import regulations on GHGs and GHG-intensive products.  …

(2) China will not unpeg its currency vs. the US dollar (despite 12 more threatening NYT columns by Paul Krugman). …

Via Sallie James of Cato, I came across this story:

Minnesota recently enacted a plan to tax electricity generated by carbon-intensive methods in North Dakota–specifically, a carbon fee of $4 to $34 per ton of CO2 emissions in addition to the normal cost of coal power.

Naturally, North Dakota's utilities are none too happy about this development. The state rightly claims that the tariff will discourage Minnesota from buying power from North Dakota, which produces the majority of its energy from coal. State officials say that the state is working on carbon capture technology as well. And the state isn't taking Minnesota's tariff lying down–North Dakota is suing Minnesota since it believes the tariff, scheduled to go into effect in 2012, is an illegal attempt to regulate out-of-state utilities.

More here.  I'm not sure the lawsuit has actually started yet, but if it goes ahead the dormant commerce clause issues could be a preview of cases to come at the WTO.

This reminds me a bit of the Brazil – Retreaded Tyres case:

Mexico will limit imports of inefficient used cars … the energy ministry said on Tuesday.

…

Stakeholders in the domestic auto market have long lobbied for limits to be placed on the import of older used cars from the United States to help support the domestic market.

"Older used cars from the United States": I wonder if that includes a relatively fuel efficient, but older, Toyota Corollas or Honda Accords.

There are also going to be fuel efficiency standards.

As Joel noted, over at Opinio Juris, they are discussing the new book by Greg Shaffer and Mark Pollack, When Cooperation Fails: The International Law and Politics of Genetically Modified Foods (Oxford, 2009).  Greg and Mark introduce the book as follows:

As its title suggests, When Cooperation Fails has two distinct aims.  The specific empirical aim is to provide a definitive and theoretically informed account of one of the most bitter and politically charged international disputes of the past two decades, between the United States and the European Union over the regulation of genetically modified foods and crops.  Our theoretical aim, however, goes far beyond the specifics of the GMO case:  indeed, we seek to contribute to literatures in international law and international relations that identify the sources of international regulatory and trade disputes, the obstacles to successful cooperation, the interaction of hard- and soft-law international regimes, and the role of WTO dispute settlement in managing conflict.

With regard to the regulatory differences that are at the heart of the GMO conflict, they note:

Fifth and finally, we return to the domestic level to assess whether several decades of discussion, negotiation, and litigation have resulted in significant reform and/or convergence of the two regulatory systems. We demonstrate that, despite some domestic changes on each side, the US and EU regulatory systems for agricultural biotechnology show few signs of real convergence toward a common regulatory model.

…

System friction between two entrenched regulatory systems is unlikely to be decisively settled in the near future, but the dispute can be managed, with key roles for international law and international institutions.

So, perhaps the conclusion is, things are bad, but they could be worse without the WTO! [ADDED: Now that I see the latest post by Greg and Mark, let me amend this statement to the following:  Things aren't all that bad, in part thanks to the WTO.]

As for the commenters, Rebecca Bratspies thought they (1) failed to address some core issues and (2) were a little too hard on the Europeans:

Where the book falls down a bit is in exploring … whether it is appropriate for the WTO’s dispute resolution process to dramatically expand the reach of trade law into erstwhile domestic environmental, consumer and food safety law questions via broad application of the SPS Agreement premise that regulation must be based on scientific risk assessment.

It was here that found myself wishing for more. The book was far too willing to credit United States claims of “scientific” regulation, and to dismiss the European approach as invalid. For example, at one point the European position gets reduced to the argument that “states have the right to be irrational.” (p. 209). This framing hardly does justice to the European position. It is not irrational to conceive of risk assessment as a combined political and scientific question, one that captures both the acceptability and the magnitude of a risk.

On the first point, I would add that it's not just the WTO's dispute resolution process that expands the reach of trade law — it's the substantive agreements themselves, which, in effect, means that it's the governments who drafted the agreements.

Sungjoon Cho is next up.  He makes the following point regarding the science behind the conflict:

the trans-Atlantic divergence (polarization) in the regulation of GM foods does reveal two different “philosophical” or hermeneutical patterns in perceiving (good) biotech “science.” Overall, the mode of scientific knowledge which the U.S. side applies here is a narrow, technical one depending largely on laboratory science (techne or episteme). In contrast, the EU side emphasizes a more common sense approach to biotech science (phronesis) which take seriously ordinary people’s perception of science in a given matter. Therefore, the U.S. side tends to condemn the EU position as a “bias” which must be remedied with enlightenment, while the EU side tends to criticize the U.S. stance as an attempt to “Americanize” the regulation of GM foods.

I wonder if perhaps the source of the conflict could be stated as follows.  There are two, very different approaches to putting new products on the market:  (1) they can only be sold if they are proven safe; or (2) they can be sold as long as they are not proven harmful.  Is it correct to say that both approaches are "based on science," in some sense?

Sungjoon concludes:

I agree with the authors that this dispute is something to be “managed” with patience, rather than “settled” once and for all. Managing the trans-Atlantic tension on GM foods regulation starts with the “fidelity to openness,” which pushes both sides to learn more about the other party’s position, including its policy rationale, context and tradition. Perhaps both sides should stop trying to “control” the situation: they should instead endeavor to “communicate” with each other. 

Finally, Tomer Broude had some quibbles with the authors' discussion of "hard" and "soft" law, including this point:

What I found much less convincing is the author’s symmetrical contention that the WTO’s ‘hard’ law, especially its dispute settlement system, has somehow been ’softened’ by the GMO dispute.

As for me, I'm curious as to what the authors think about labeling as a possible solution to these kinds of regulatory differences (I have not seen the book, so I don't know whether they talk much about this).  Under a GMO labeling regime, the EU would concede that GMO products could be sold, but the U.S. would have to accept a lower than expected sales volume as some consumers would be scared off by the label.  Is this a good compromise?