Can Ukranians Seek Justice in U.S. Courts? …. Yes.

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War Crimes —   Any remedies for Ukrainians in U.S. courts? Can they sue in federal courts for compensation? Really interesting questions. Not discussed very much if at all. Such litigation raises a host of complex issues of sovereign immunity, human rights, federal jurisdiction, foreign affairs, national security, sanctions, frozen assets, presidential authority, among others. But the answer may very well be ‘yes.’ The foreign Sovereign Immunity Act, the Alien Tort Statute and other federal legislation come into play. These statutes may well provide standing by aggrieved individuals and relatives against both Russia and individual Russians for acts of torture, terrorism and violation of international human rights. Yes, a lot of work for litigators and international lawyers. This highlights the often overlooked role of domestic courts as an instrument of enforcement of customary international law, especially war crimes and violation of human rights. This is all for the good. I’m sure this will be explored many times over for years to come.

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The U.S. Should Finally Accept the International Criminal Court — Long Overdue, Especially Now After Ukraine.

 

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Really good piece in the Washington Post arguing for the U.S. to finally accept the International Criminal. Here are some highlights.  

  • The United States in general, not just the Republican Party, has long had a fraught relationship with the ICC. Indeed, some elements of the Biden administration, notably the Pentagon, remain wary of engaging with it.
  • Congress not long after passed the American Service-Members’ Protection Act — a law known to some of its critics as the “Hague Invasion Act,”
  • Is it hypocritical, under these circumstances, for the United States to embrace a court it has so aggressively rejected in the past? Perhaps so. But that doesn’t change the fact that the United States is surely right to support accountability for the horrific crimes being committed in Ukraine.
  • There is no getting around the charge of hypocrisy. To repair its image, the United States should, in future conflicts, be more transparent and aggressive about its own investigations into alleged crimes by its military personnel, making clear that it respects the ICC’s values if not its jurisdictional authority.

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Ukrainian Sanctions — Is Global Commerce Changed Forever?

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The question of the day is — Do the historical use of trade sanctions by the U.S. portend a new world for global commerce? The answer is not clear. A new article in the New York Times today discusses whether or not the use of sanctions is a transformational event for global commerce. It makes a large number of good points but does not come to firm conclusions. I think the answer is still unclear. Here are the major points made by the authors.

  • When the Cold War ended, governments and companies believed that stronger global economic ties would lead to greater stability. But the Ukraine war and the pandemic are pushing the world in the opposite direction and upending those ideas.
  • Important parts of the integrated economy are unwinding. American and European officials are now using sanctions to sever major parts of the Russian economy.
  • The moves reverse core tenets of post-Cold War economic and foreign policies forged by the United States and its allies that were even adopted by rivals like Russia and China.
  • “What we’re headed toward is a more divided world economically that will mirror what is clearly a more divided world politically
  • Opposition to globalization gained momentum with the Trump administration’s trade policies and “America First” drive. Putin’s invasion of Ukraine has brought into sharp relief the uncertainty of the existing economic order.
  • The result of all the disruptions may well be a fracturing of the world into economic blocs, as countries and companies gravitate to ideological corners with distinct markets and pools of labor, as they did in much of the 20th century.
  • The economic impact of such a change is highly uncertain. The emergence of new economic blocs could accelerate a massive reorganization in financial flows and supply chains.
  • The war has set in motion “deglobalization forces that could have profound and unpredictable effects.”
  • “Your interdependence can be weaponized against you,” said Dani Rodrik, a professor of international political economy at Harvard Kennedy School. “That’s a lesson that I imagine many countries are beginning to internalize.”
  • The Ukraine war has “probably put a nail in the coffin of hyperglobalization.”
  • China and, increasingly, Russia have taken steps to wall off their societies, including erecting strict censorship mechanisms on their internet networks, which have cut off their citizens from foreign perspectives and some commerce. China is on a drive to make critical industries self-sufficient, including for technologies like semiconductors.
  • For decades, prominent U.S. officials and strategists asserted that a globalized economy was a pillar of what they call the rules-based international order, and that trade and financial ties would prevent major powers from going to war.
  •  Mr. Biden has continued many Trump administration policies aimed at delinking parts of the American economy from that of China and punishing Beijing for its commercial practices.

   “Sanctions and Impact on the Future of Global Commerce. New York Times (March 23, 2022). 

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International Law and Russia’s Invasion of Ukraine — Legal Action (ICJ and ICC) and Economic Sanctions — Complementary and Historical.

 

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Russia’s invasion of Ukraine has been met with historical challenges to it in the International Court of Justice and the International Criminal Court (and in the General Assembly).

Ukraine filed and action in the International Court of Justice and it is currently deciding Ukraine’s request for provisional measures. Of course, Russia did not appear. Thirty-nine referrals have been made to the International Criminal Court.  The ICC prosecutor has indicated that he is moving forward on the issue of war crimes against individuals. Indeed, special tribunals may also be established against Russia. 

The Genral Assembly (after Russia’s veto in the Security Council) acting under the ‘Uniting for Peace Resolution’ referred the matter to the General Assembly.  It promptly and almost unanimously condemned Russian actions and called for unconditional withdrawal of Russian forces.

To me, this legal offensive is complementing the economic sanctions imposed on the Russian Federation by the United States and many others — very broad and very prompt. 

The international legal system is working and is an historical first — in confronting so promptly such grievous and gross violations of international law.

….. “International Law Goes to War in Ukraine.” Foreign Affairs (March 15th, 2022).

 

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Biden’s Trade Policies — More Aggressive than Trump’s?

cwr_v8n1_07.pdf (yiil.org)

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Biden’s Trade Policies — One Year In — Same as Trump’s? More Aggressive?

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[Excerpts from a forthcoming article, now on SSRN at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3991157  Also available as draft at Click Here. ……………

The big question is the following: Is the Biden trade policy different from the Trump chaos? 

My answer is “no.” I consider Biden’s trade policy to be Trump’s without the tweets. They both rely on unilateral measures and broaden protectionist ones.  In fact, Biden not only relies upon Trump’s actions but also has broadened them.[1] 

Trade issues have reemerged during the past few months as high-priority domestic and foreign policy issues for the Biden administration. This is especially true for the situation regarding trade with China and how this relates to U.S. domestic economic and national security issues. Let’s look at what Trump did, what Biden has done so far, and the challenges ahead. 

Not much change has been made in trade policies between President Trump and President Biden. In fact, Biden, relying on Trump’s actions, has broadened them. A slight change in tune has occurred: a little more reconciliation with Europe and international organizations. However, it is extremely difficult to identify any significant difference concerning China, Russia, or Iran. Has Trump’s America First policy morphed into Biden’s America First or Workers trade policy? 

The Biden administration is confronting various trade challenges: removing Trump’s tariffs that are still in place; joining the revised TPP, especially now that China and South Korea have indicated their interest in joining; reengaging with the WTO, especially over the dispute resolution system; enforcing the Phase One Agreement with China, particularly the purchase requirements; and more forcefully confronting China’s policies concerning state-owned enterprises and government subsidies. Other issues relating to trade are pending and growing in importance—for example, climate change, a carbon tax, environmental issues, and pandemics. 

What specifically must be done by the Biden administration? A great deal. That’s another story. 

 ………………………………………………….

[1] I have written several journal articles recently on Trump’s trade policies and early trade actions by President Biden. Malawer, Trump, Litigation and Threats: From Queens to the World Stage. China and WTO Review 209 (No. 1) (2021). Available at http://cwr.yiil.org/home/pdf/archives/2020v6n1/cwr_v6n1_08.pdf; Malawer, Biden’s Trade Policies — Recalibrated, More Focused, and a Bit Concerning.7 China and WTO Review 391 (No. 2) (2021) Available at http://cwr.yiil.org/home/pdf/archives/2021v7n2/cwr_v7n2_07.pdf; Malawer. Biden –National Security, Law and Global Trade: Less Subterfuge and More Strategy in the New Era of Crisis. China and WTO Review 185 (No. 1) (2021). Available at http://cwr.yiil.org/home/pdf/archives/2021v7n1/cwr_v7n1_09.pdf 

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Josh Hawley, Harding and Hoover — Trade & Back to the Future — Not a Good Idea.

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Recent opinion piece by Josh Hawley. My take. He’s one of the most protectionist and trade xenophobic today. He make former U.S. presidents Harding and Hoover look mighty good. Here are some of his views as contained in today’s New York Times piece:

….We liberalized and expanded trade relations with China under the delusion that it could be influenced into becoming a peace-loving democracy. We ceded more and more of our national sovereignty to multinational organizations like the World Trade Organization, and supported China’s membership to that body.

…. We need to fundamentally restructure our country’s trade policy and decouple our security and safety from the profit-seeking of multinational corporations. 

… Under this plan, officials at the Department of Commerce and the Department of Defense will identify goods and inputs they determine to be critical for our national security and essential for the protection of our industrial base. These goods would then become subject to a new local content requirement: If companies want access to the American market for these critical and essential goods, then over 50 percent of the value of those goods they sell in America must be made in America. Companies will have three years to comply, and can receive targeted, temporary waivers if they need more time to reshore production. In effect, the legislation applies the domestic sourcing principles of the Buy American Act — a law that governs federal government procurement — to the entire commercial market.

… When it comes to our most critical goods, this “majority-made” standard is just common sense and harder to game than more complicated rules. And the requirements of this standard will be enforced with a compliance mechanism that closely mirrors one of the nation’s oldest trade remedy regimes: anti-dumping. Under my proposal, domestic producers can petition the U.S. International Trade Commission if they suspect that corporations or importers have violated the local content requirement, and the secretary of commerce can take enforcement actions such as civil penalties following an investigation to ensure the new standards are met.

….I’ve previously called for the abolishment of the World Trade Organization to ensure that the United States can safeguard its economic sovereignty. Regardless of how this proposal affects existing trade agreements. 

….Local content requirements can help reverse our dependence on foreign nations both by discouraging multinational corporations from relying on fragile global supply chains, and also encouraging them instead to build productive capacity in the United States. 

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The U.S. Strategy as to U.S. – China Trade Relations — Is Biden Same as Trump But without the Tweets? We’ll See.

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The United States Trade Representative Katherine Tai recently delivered remarks at the Center for Strategic and International Studies (CSIS) outlining the Biden-Harris Administration’s new approach to the U.S.-China bilateral trade relationship. Not clear how different Biden’s trade policy is from Trump’s concerning China. We’ll see, hopefully it will be. Here’s my summary of those remarks.

  • I have said this before and I will continue to say it: the U.S.-China trade and economic relationship is one of profound consequence.  As the two largest economies in the world, how we relate to each other does not just affect our two countries. It impacts the entire world and billions of workers.
  • This bilateral relationship is complex and competitive.  President Biden welcomes that competition to support American workers, grow our economy, and create jobs at home.  
  • He believes we need to manage the competition responsibly – and ensure that it is fair.  
  • We will start a targeted tariff exclusion process.  We will ensure that the existing enforcement structure optimally serves our economic interests.  We will keep open the potential for additional exclusion processes, as warranted. 
  • We continue to have serious concerns with China’s state-centered and non-market trade practices that were not addressed in the Phase One deal.  As we work to enforce the terms of Phase One, we will raise these broader policy concerns with Beijing.  
  • And we will use the full range of tools we have and develop new tools as needed to defend American economic interests from harmful policies and practices.
  • Finally and critically, we will continue to work with allies to shape the rules for fair trade in the 21st century, and facilitate a race to the top for market economies and democracies.
  • We focused on dispute settlement cases at the WTO.  We brought 27 cases against China, including some I litigated myself, and through collaboration with our allies.  We secured victories in every case that was decided.  Still, even when China changed the specific practices we challenged, it did not change the underlying policies, and meaningful reforms by China remained elusive.  
  • It launched an investigation focused on China’s forced IP and technology transfer policies – longstanding and serious problems.  This led to substantial U.S. tariffs on imports from China – and retaliation by China.  Against this backdrop of rising tensions, in January 2020, the previous administration and China agreed to what is commonly referred to as the “Phase One Agreement.”  
  • Every steel plant that shuttered left hundreds of workers without livelihoods.  It also left communities reeling, as small businesses dependent on plants also closed their doors and blighted buildings brought down real estate values. 
  • We see the impact of China’s unfair policies in the production of photovoltaic solar cells.  The United States was once a global leader in what was then an emerging industry.  But as China built out its own industry, our companies were forced to close their doors.  
  • U.S. agriculture has not been spared either.  While we have seen more exports to China in recent years, market share is shrinking and agriculture remains an unpredictable sector for U.S. farmers and ranchers who have come to rely heavily on this market.  China’s regulatory authorities continue to deploy measures that limit or threaten the market access for our producers – and their bottom line.  
  • We also see troubling dynamics playing out today with the semiconductor industry.  In 2014, China issued an industrial plan to announce, “the goal of establishing a world-leading semiconductor industry…by 2030.”  Reportedly, China has already spent at least $150 billion on this effort, with more on the way.  Its intentions are clear, just as they were with steel and solar.  
  • And we will also directly engage with China on its industrial policies. Our objective is not to inflame trade tensions with China.
  • But above all else, we must defend – to the hilt – our economic interests.  
  • I have been working to strengthen our alliances through bilateral, regional, and multilateral engagement.  And I will continue to do so.

Tai’s Comments at CSIS on US-Chia Trade Strategy (October 4, 2021).

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First 6 Months of Biden’s Trade Policy — Concerning.

   

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The Biden administration’s early policies toward China, global trade, and the WTO have proven to be attuned to the newer developments of the times. In practice, however, these policies are a bit concerning.

 

There has been no wholesale de-Trumpfication of the US trade policy. The administration has not immediately rejected many of Trump’s chaotic trade policies. It has recalibrated some of them and extended others. It has clearly put China at the center of its policies, raising the importance of human rights. However, it is disappointing that the administration is keeping some of the most grievous policies (Section 232 steel tariffs) and not addressing others, most notably the WTO’s dispute resolution system, which represents the core of an international rules-based trading system. In fact, both the Trump administration and the new Biden administration have been oblivious to the filing of new matters.

 

Biden’s policies toward China keep many of Trump’s signature policies in place, including the Phase One Trade Deal. President Biden has also kept Section 232 (steel tariffs) and Section 301 (tariffs on Chinese goods). Indeed, while imposing new sanctions because of human rights violations concerning the Uighurs, which reflects core American values, he extended restrictive investment measures on Chinese firms.  His administration is now exploring a new application of Section 232 tariffs on China related to the import of rare earth elements and new sanctions over China’s actions (its new National Security Law) concerning human rights in Hong Kong. President Biden is now also grappling with the US sixty-year-old sanctions on Cuba in light of recent historical demonstrations in Cuba for greater human rights and freedom.

 

     Biden’s policies toward the WTO have essentially been uninspiring. He has not reversed Trump’s destructive policies relating to the WTO’s dispute resolution system including its Appellate Body. The Biden administration has continued to follow the later Trump policy of not filing actions in the dispute resolution system against China or any other country. This is contrary to Biden’s often-stated goal of following and enforcing global trade rules and supporting the global system. Dispute resolution is at the core of the peaceful settlement of trade disputes that could otherwise spin out of control.

 

 

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GLOBAL TAXATION AND TRADE — G-7 TAKES 1ST STEP CONFRONTING GLOBAL CORPORATE TAX EVASION.

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The G-7 has taken the first step in restructuring the global tax regime. This is the first international effort in decades. This has huge implications for global commerce (especially tech firms). Taxation of global groups & transactions is complex. Global trade issues are intricately related to international tax rules. Much beyond tariff taxation. Lot of work still needs to be done. Especially as to the minimum corporate rate, source taxation (location of economic activity) and settling issues of digital taxation. Drafting a code, national adoption and national implementation are huge next steps. For example, getting the eventual agreement through the U.S. Congress especially if it’s a formal treaty that require 2/3 vote of the Senate. But this is necessary to stop tax evasion, tax avoidance and a global race to the bottom. Ensuring tax compliance by multinational corporation is essential for an equitable economic system.

G-7 and Global Corporate Taxation.” New York Times (June 5, 2021).

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