Law, International Transactions & Federal Courts — Forex, Trade Sanctions, Corruption (FCPA) & Alien Torts.

Posted on August 22, 2015 by Stuart Malawer

                                                 Globe Map (Black)

         This summer has not proven to be dull in international legal cases from the federal courts impacting international transactions and issues concerning China, Cuba, Iran and others. These cases and issues involve, among others, foreign corruption (FCPA), foreign antitrust conspiracies (FOREX), federal and state trade sanctions (over Iran and Cuba), foreign investment (CFIUS), trade and economic embargoes. Here are the most recent developments:

  • Hiring relatives of executives of foreign Sovereign Wealth Funds (SWF),  from the Middle East, as Interns violates the Foreign Corrupt Practices Act. No doubt other expansive and similar corruption cases to follow as either SEC actions of criminal indictments by the U.S. Dept. of Justice. …. Probably involving U.S. firms in China. “Bank of New York Mellon.” New York Times (August 18, 2015).
  • First, the US Dept. of Justice fined various multinational banks billions for rigging currency markets (FOREX.) Second, these banks then settled for billions in private litigation in the US. Third, these banks now face more extensive liability as they confront foreign court actions. Big banks just can’t learn to say no to criminal antitrust conspiracies. Fast money schemes often lead to big judgments, damaged reputations, and loss of global business. “Billions in Fines and Judgments and Forex.” Financial Times (August 17, 2015).

  • Calls for CFIUS nat’l security review of Tsinghua’s bid for Micron Tech. Another legal issue concerning national security and trade and raising questions of Congressional and Executive authority in foreign trade and foreign policy. “China Investment in US and National Security and Congressional Law.” Wall Street Journal (August 12, 2015).
  • State trade sanctions and federal law. The law is clear. The federal law and international agreements preempt state law. There really isn’t very much state officials can do even though they are personally opposed to Obama’s diplomacy with Iran. Foreign affairs and foreign trade are matters of exclusive federal authority with great powers vested in the president and delegated to him. Federal preemption over states is clear. This is a key aspect of federalism that is long-standing. “State Trade Sanctions and Iran.” Wall Street Journal (August 4, 2015).
  • Congress has significant constitutional authority in trade issues and sanctions policy. It’s time for it to get in line with the President’s newer Cuban policy, favored by most Americans, and the global community. That policy can more fully engage the Cuban people in the world of trade and commerce. The policy of the last 50 years has accomplished none of its initial objectives. This is one area a generally dysfunctional congress should be able to agree upon. Let’s do away with the Cuban embargo, now. “Cuban Embargo.” New York Times (August 3, 2015).
  • Billions in Iranian assets will be unfrozen when sanctions are lifted. They will be subject to US court claims and judgments against Iran by US terrorist victims and others. Huge potential litigation. Somewhat similar to issues concerning claims by US nationals and firms against Cuba when the Cuban embargo is lifted. Issue of individual claims, diplomacy and private US litigation are complicated. Do have precedents going back to Russian assets in the US after Soviet recognition in the 1930s and even earlier. “Terror Cases and Iran.” Wall Street Journal (August 2, 2015).
  • The idea that US states can impose sanctions on Iran despite an int’l deal is wrong. These lawyers ought to go back to law school and read cases on federalism, preemption, and international agreements. “Lawless and Nuclear Deal.” Wall Street Journal (July 26, 2015).
  • China’s foreign currency reserves drives its overseas investments which reflects its assertive foreign policy. This is now a challenge for US policy. But it is also an opportunity for attracting investment for state economic development in the US. “China’s Global Ambitions.” New York Times (July 24, 2015).
Posted in Global Trade Relations | 1 Comment

Trade Developments on the Federal & State Levels — Growing Criticism, But Some Success.

Posted on July 9, 2015 by Stuart Malawer
                                                                Global Trade
     Major developments in global trade last month, on the federal level, include the enactment of the ‘Fast Track’ legislation and trade adjustment assistance. On the state level, state incentives for economic development focusing on export promotion and foreign investment. It’s too bad there is so much resistance at the federal level in promoting viable trade strategies and there is growing criticism on the state level in providing incentives. But nevertheless both the Obama administration and states, such as Virginia, are moving forward. Here are some recent specifics:
…..Major success for Obama administration. Signing ‘Fast Track’ and ‘Trade Adjustment’ bills. Next trade fight ….. reauthorizing the Ex-Im Bank. Global competition requires American leadership and that means the necessary legislation. Congress has a major role in supporting U.S. firms and their international activities. But also reforming U.S. international tax legislation should be a priority. Massive tax avoidance via offshore transactions and tax havens aren’t sustainable. “Obama Signs Trade Legislation.” Washington Post (June 29, 2015).
…..Good piece in the Financial Times. Both U.S. and EU need to fix the way they authorize and negotiate trade agreements. “Congress and Fast Track.” Financial Times (June 19, 2015).
…..Excellent editorial on Virginia’s trade initiatives and negativism of many Congressional Democrats and Democratic leaders. Too bad. Virginia and other states have a strong tradition of promoting economic development via trade promotion and foreign direct investment. You ignore trade at your peril. Shouldn’t play politics. Leadership is important as is public support. Need more leaders to speak out on this. McAuliffe is right and his actions benefit the Commonwealth. “Virginia and Trade.” Richmond Times-Dispatch (June 15, 2015).
…..Best way to avoid hurting the U.S. is for states to go after foreign investment and trade — Not soliciting firms from other states. Use of state economic incentives and economic development policies should be focused on enlarging the pie, not cutting it up. States need to better integrate their economies into the global economy. That’s what counts today. Parochial policies are a dead end. We need some real forward-looking strategies for state economic development. “State Incentives and Economic Development.” CNBC (June 9, 2015).

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Does U.S. Law Bring Order to Global Commerce? Yes, in Many Cases.

Posted on June 3, 2015 by Stuart Malawer
                                   TPP World    
  Trade and international legal developments concerning corruption, price-fixing conspiracies, the TPP debate, international accounting and tax rules continue to illustrate the importance of global trade and U.S. law over the last few weeks. Most interesting is  the application of U.S. law (prosecutions) to a broad range of activities and global actors, including global sports and financial dealings. In many ways these developments highlights the critical importance of the U.S. and its legal system in bringing order to global commerce. Here are some particulars:
Unfortunate divide in the Democratic Party. Tech firms and Silicon Valley support TPP and trade. Manufacturing-based industries and labor do not. Better communication and understanding are needed to move the trade agenda ahead. It’s in the national interest. “Obama and Trade.” Washington Post (June 2, 2015).
Last year has seen an upsurge of dispute resolution activity in the WTO. Developing countries initiated a number of new cases. The EU was the most active developed country. Many different trade areas were litigated. A busy year. Once again showing the strength of the rules-based system for global trade. WTO News (May 22, 2015).
Posner is wrong. U.S. antitrust laws apply to U.S. foreign subsidiaries abroad. Both restricting their activities and protecting them. Precluding the right of a foreign subsidiary to sue for its loses, after a criminal antitrust suit against a price-fixing cartel, ignores the reality of the structures of global multinational firms as a single enterprise managing a global supply chain. His view imposes a too restrictive interpretation of older antitrust laws to today’s global business environment. “Posner and Global Antitrust.” New York Times (May 31, 2015).
The story here is that American power rests on its justice system and the international application of its laws extraterritorially. Its global prosecutions possess a moral authority that stems from its law governed society. These prosecutions for corruption as well as for money laundering and sanction violations carry a global credibility. No other country has this such authority or credibility. “FIFA and U.S. Extraterritorial Law.” Financial Times (June 1, 2015).
Isn’t this interesting? The world now appreciates the extensive extraterritorial reach of U.S. criminal law to prosecute global corruption. Especially that touching international bodies and firms doing business here in the U.S. This is a major turnaround from the traditional concern by many foreign states as to the unilateral reach of U.S. jurisdiction — especially under the Foreign Corrupt Practices Act. It now dawns on them somebody has to do it and its good of everybody. Good for the USDOJ. “FIFA, U.S. Law, and Global Corruption.” Financial Times (May 27, 2015).
Global cities are participating more in the global economy but so do many states and counties within the U.S. “A New Global Order of Cities.” Financial Times (May 26, 2015).
So much for the congressional critics demanding currency provisions to be included in the TPA and TPP. The IMF has determined that the yuan is in fact fairly valued. In another words it’s exchange rate does not provide an unfair advantage to Chinese products being sold into the US marketplaces. “IMF and Lorton.” Wall Street Journal (May 26, 2015).
Doesn’t seem to make sense. Workers in US firms exporting make considerably more than those working in firms that only sell domestically. Limitations on imports to the US would only lead to limitations on US exports to other countries where they are imports. Maybe the real problem is better education and understanding of the reciprocal essence of global trade thus leading to greater public support in the US. “Trade and Affluent.” New York Times (May 27, 2015).
US int’l tax accounting rules should require multinationals to deduct tax deferral amounts from annual profits as an expense. This would make more transparent the tax avoidance of corporate groups as well as giving a more accurate picture of the real profitability of global transactions. Perhaps it would also prove to be an incentive to restrict this practice. Nevertheless, the real remedy is for tax reform to restrict and recapture these overseas retained earnings. This practice of int’l tax deferral is a real scar on corporate taxation today. It needs to be changed. “Overseas Profits.” New York Times (May 22, 2015).
Plurilateral agreements such as TPP / TTIP do represent a long-term threat to a multilateral system under the WTO but they are worthwhile today. “Future of Global Trade Policy.” Financial Times (May 12, 2015).
After the criminal antitrust pleas here comes private class actions with treble damages. Let go after some of the individuals who escaped criminal action. “FOREX and Criminal Pleas.” Financial Times (May 21, 2015).
Paul Krugman is disingenuous. It isn’t analytically honest to say there is no trust in trade policy just because you don’t like particular policies.The TPP promotes both intellectual property rights & of trade disputes. The last time I looked these have been basic tenets of US trade policy for decades. These are among the two most important aspects of the global economy today. Growing environmental and labor concerns are important but it is important to remember that they have not been central to trade policy historically. “Trade and Trust.” New York Times (May 21, 2015).
Billions of fines for criminal antitrust violations by global banks for fixing FOREX & LIBOR rates. However, they are not the individuals that conspired. They are not real people. What about convicting individuals involved. Also the corporate non-prosecution agreements don’t seem to incentivize against future misconduct. This would help against repeat criminal actions, hopefully. Unfortunately, we have seen too many cases of repeat and serial violations by multinationals on a wider variety of issues including money laundering and tax evasion. But this is a good start by the Dept. of Justice. “Forex and Libor.” Financial Times (May 21, 2015).
WTO ruling against US on country-of-origin labeling. COOL is discriminatory and should be dropped. WTO News (May 18, 2015).
Trade is not the problem. It’s taxation (really non-taxation) of U.S. multinationals that should be the target of unions. “Labor and Hilary.” New York Times (May 18, 2015).
Global Trade is Complex. It’s not an option. Improving its terms is good idea. Demagoguery is not. Warren is going to lose on this. “Warren and Trade Bill .” New York Times (May 15, 2015).
Regional trade agreements TPP &TTIP cannot push WTO & global trade rules from center stage. “Future of Trade.” Financial Times (May 12, 2105).
U.S. military leadership understands the strategic nature of global trade talks. Pass TPA and TPP. “The Military View of Trade.” Financial Times (May 7, 2015).

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U.S. & Global Trade — U.S. Global Leadership Role at Issue.

Posted on May 13, 2015 by Stuart Malawer
TPP World
     Most important trade news the last few weeks have concerned TPA and Congress and the recent  blocking of TPA on procedural grounds in the Senate. This is extremely unfortunate for a broad range of reasons  including economic, geopolitical and political.
     The congressional debate includes issues of currency manipulation, trade adjustment assistance, national security, future rules of global trade, among a host of others. The basic problem is that those objecting to further liberalization want more say and this is reinforced by the powers of the Congress in global trade.
     This calls for even more energetic policies of the President to get TPA through the Congress this year. Otherwise both TPP and TTIP are dead and so is much of U.S. global leadership, in both trade and foreign policy.
Regional trade agreements TPP &TTIP cannot push WTO & global trade rules from center stage. “TPP and Plurilateral Agreements and the WTO.” Financial Times (May 13, 2015).
Some additional items in the TPA should do it. Warren is wrong. “Senate Blocks TPP.” New York Times (May 12, 2015).
Gulf airlines under attack by American carriers for alleged foreign subsidies. (But they are government owned.) “Airlines Cry Foul.” (May 12, 2015).
Trade Adjust.Asst.Act (TAA).Piece of trade debate.Helps workers.Should be passed with TPA/TPP. “Trade Adjustment Assistance and TPP.” Wall Street Journal (May 11, 2015).
Are cyber conflicts & geopolitics the new face of globalization & are new policies needed? “Cyber Policies.” Financial Times (May 10, 2015).
U.S. military leadership understands the strategic nature of global trade talks. Pass TPA and TPP. “U.S. Military and the TPP and Geopolitics.” Financial Times (May 7, 2015).
Yes, imports are a part of global trade. Cheaper imports benefits consumers greatly. “Imports and Trade and Consumers.” New York Times (May 8, 2015).
New report by the Council of Economic Advisers. Three conclusions: (1) U.S. Trade agreements do not increase American investments abroad; (2) U.S. is the world’s largest agricultural exporter; (3) U.S. has the the world’s largest service sector and is the world’s leader in such exports. Good reasons for concluding the TPP. Would benefit U.S. exports and economy without outsourcing jobs. 10 Facts About Trade (Council of Economic Advisers) (May 2012).
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Ever-Expanding Topics within Global Trade — A Dynamic and Critical Aspect of Global Politics.

Posted on April 21, 2015 by Stuart Malawer

                                     Global (Definition)

        A broad range of trade actions have occurred within the last few weeks impacting areas not recently addressed. They include among others: cyber espionage and new U.S. asset controls relating  to cyber espionage, new EU antitrust cases (Google and Gazprom), an emerging Obama doctrine for global issues, a new ‘Open-Skies’ dispute with Gulf airlines, geopolitical aspects of trade diplomacy, among others. These continue to demonstrate the broad range of ever-expanding topics impacting global trade and transactions.

  • The President issued a new Executive Order authorizing freezing of property of foreign nationals in the U.S. if they are involved in cyber attacks on critical infrastructure, disruption of computer networks, or stealing trade secrets for commercial or competitive gain. This is the application of U.S. trade sanctions (under IEEPA) to foreign activity outside of the U.S. that has an effect within the U.S. Just the latest example. Executive Order — “Blocking the Property of Certain Person Engaging in Significant Malicious Cyber-Enabled Activities.” (April 1, 2015). 
  • The EU is now going after Google for antitrust violations for manipulating search results and Apple for manipulating tax transactions. U.S. technology multinationals are under heavy scrutiny by the EU. Aggressive compared to the U.S. and its general acquiescence. “EU Antitrust and Tax and Google and Apple.” New York Times (April 3, 2015).
  • TPP & TPA need to be concluded by the President and Congress. They are in our national interest. “Why Asian Trade Deal Matters.” New York Times ( 4.4.15). 
  • Friedman argues that the ‘Obama Doctrine’ in foreign affairs is ‘engagement.’ In the context of Myanmar, Cuba and Iran it is recognizing that trade sanctions should be lifted to establish diplomatic relations. In the case of Cuba they have failed and in case of Iran they have been somewhat success. (Need to keep in mind that many trade sanctions can only be lifted by the Congress.) “The Obama Doctrine and Iran.” New York Times (April 6, 2015).
  •  The AB of the WTO denied claims of Vietnam concerning U.S. antidumping duties on shrimp. “U.S. – Vietnam Shrimp.” WTO News (April 7, 2015). 
  • As geopolitical tensions grows so do cyber attacks. Firms may be attacked for reasons totally unrelated to their business or for particular economic / commercial advantage. This latter is more prevalent for China than Russia which is more interested in traditional espionage. Cyber is a new domain and there is always conflict over a new domain. “Global Tension Increase Cyber Threat.” Financial Times (April 10, 2015). 
  • Article 11 of the “Multilateral Agreement on the Liberalization of International Air Transport (Model Open- Skies Agreement) [MALIAT]” governs “Fair Competition.” No specific language as to government subsidies. “Model Open Skies Agreement” (U.S. Dept. of Transportation, Office of International Aviation) (January 2012).
  • In addition to the Google antitrust case brought by the EU Commission recently an action is now being filed against Gazprom. This seems to evidence that antitrust laws are not only used for business and trade reasons but to some extent geopolitical ones. Certainly such cases might very well have geopolitical consequences. “EU Poise to Unveil Antitrust Charges Against Russia’s Gazprom.” Financial Times (April 21, 2015).

 

 

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Growing Importance of Many Factors to Global Trade & of Trade to Global Policy.

Posted on March 31, 2015 by Stuart Malawer

Global Map

     There have been several interesting developments in global trade the last few weeks reflecting the greater role it has to play in the global system and the broad factors influencing trade policy. They include the emergence of the Chinese initiative concerning the Asian Infrastructure Investment Bank (and the role of China in this new economic era), the dispute over arbitration provisions in trade agreements (as to the issue of sovereignty), and the general relationship of geopolitics and geoeconomics (as to influences on trade policy generally).

  • New WTO dispute filed against US in WTO by Indonesia over antidumping duties. Just the usual. “Indonesia and the U.S.” WTO News (March 13, 2015).
  • The Asian Infrastructure Investment Bank (AIIB), the new China initiative challenging the U.S. dominated World Bank It is gaining more European members after the U.K. In many ways if the U.S. would join it could mean more investment opportunities for the U.S. and would indicate a less confrontational approach to global trade. But geopolitical issues  (non-trade and non-financial issues) seem to predominate in the current U.S. opposition to the new bank. This is part of China’s efforts to mold newer international institutions and global trade rules. “China’s New Bank (AIIB).” Financial Times (March 16, 2015). 
  • U.S. ports are struggling to handle larger container ships. Infrastructure around them, rail links and roads need upgrading. Importers and exporters are facing higher costs. Shipping is a critical aspect of global trade, needless to say, but U.S. trade officials often seen to ignore this. The real impetus in improving this situation seems to be left to the states and cities where these facilities are located. Really need much more aggressive federal leadership. “U.S. Ports and Gridlock.” Financial Times (March 18, 2015).
  • Speech by Azevedo on current WTO challenges and concerns over bilateral and regional agreements. “Speech by Director General.” WTO News (3.24.15). 
  • Investor-State Dispute Settlement provisions (ISDS) and the TPP. Opposition continues to grow to these provisions. Some view these provisions as a door for multinationals to file suit against regulations. Some sense these violate  sovereignty and should not be included when dealing with developed countries. (They do make sense when dealing with developing countries without well-defined judicial systems and the rule of law.) Opposition to these provisions are within foreign countries as well as within the U.S. “TPP — Back Door for Foreign Suits.” Wall Street Journal (March 26, 2015).

  • Newer dimensions of the post-Cold War era are now becoming more clearly apparent. How will the globally interconnected economic and financial systems of the last 25 years be changed by the rising geopolitics and geoeconomic of this decade? The rise of China and the Mideast religious chaos, among others, are the most obvious challenges to what we once considered a workable and sustainable global system of governance. One led by the U.S. and various multilateral institutions. One suggestion, and only one in formulating a remedy, is that the US and its allies need to offer China and others greater influence in the structures of such governance. I would also add making it clear that international cooperation is a precondition of developing strong innovative economies. The continued development of a rules-based international order is critical. Continued chaos is not. “China’s Rise Confounds a Splintered West.” Financial Times (March 27, 2015).

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Is the U.S. Trade Offensive Against China Really Helping? Are China’s Newer Actions a Mirror of Ours?

Posted on March 14, 2015 by Stuart Malawer

China and U.S. Trade

     A recent article in the American Lawyer (March 12, 2015) entitled “The U.S. Offensive in the China Trade War” argues the case that the U.S. WTO litigation and domestic actions are not justified. They amount to protectionism and are counter-productive. It makes a number of interesting points:
…. Foreign direct investors (U.S. multinationals in China) are caught in the crossfire between exporters in China and the U.S. fighting each other through WTO litigation;
…. There is a U.S. government trade offensive in the WTO and this is parallel to its domestic offensive against Chinese firms under U.S. antitrust laws concerning price-fixing and predatory pricing;
…. The trade offensive impacts a minute $1ob yearly of Chinese exports out of $591n in mutual trade;
… The use of trade and antitrust laws by the U.S. government now is mirrored by China’s use of its trade and antitrust regimes. Keep in mind that trade law is aimed at government action and antitrust is aimed at corporate action;
…. There is an inconsistency in the application by the U.S. in applying countervailing and antidumping duties. The U.S. treats China as a market economy in applying subsidies. It considers China a non-market when applying antidumping laws (by using third-party surrogate pricing for determining home market sales / cost of production);
…. The U.S. law applies a “dualism.” It does not consider WTO decisions as part of or recognized as U.S. domestic law. It is viewed as only international law, as presumably an international judicial decision, that is not incorporated into the domestic legal system under the ‘doctrine of incorporation‘ that applies to customary international law only. This is part of a general failure of U.S. courts (led by the Supreme Court) of not fully effectuating international law.  
     Without countering these arguments the general theme that emerges is a credible argument against the narrative that the U.S. is merely enforcing trade rules to ensure fairness. This argument is that there is a counter-narrative. That U.S. actions are not upholding WTO rulings and is often protectionism. That the Chinese use of WTO trade procedures and domestic Chinese antitrust legislation is a mirror-image of U.S. actions. 
     While I would generally conclude that this counter-narrative is not correct. Many specific points are very interesting and some quite persuasive. But a full counter to this counter-argument (that also needs to be more fully developed) is for another day.
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Is Trade and Its Expanded Definition Now the Core of International Relations? Seems So ….

Posted on March 8, 2015 by Stuart Malawer

Trade and Airplane

 

      A host of  very broad trade issues continue to arise globally the last few weeks especially including their legal and policy aspects. They demonstrate how broad and encompassing global trade realties are today. Some include the following: new Chinese tech rules and a Chinese antitrust case involving U.S. firms; the U.S. Foreign Sovereign Immunities Act; investor-state arbitration provisions in trade negotiations (TPP and TTIP); currency manipulation and ‘fast track’; state-owned enterprises (SOEs) in aviation; ‘Weaponized finance (as trade sanctions in foreign policy involving national security), among others. “Trade” continues to expand the areas it now covers, way beyond what was thought of just a few years ago. In many ways this is now becoming the core of international relations.

 

  • Interview with USTR Froman discussing TPP, globalization, income equality, trader agreements and fast track. “Politics of Trade.” New York Times (Feb.7, 2015).
  • New national security strategy report by the Obama administration includes further promoting ‘rules of the road,’ strengthening global institutions, and further supporting trade agenda (TPP, TTIP). “Fact Sheet — The 2015 National Security Strategy.” (White House 2015).
  • LLCs & offshore shell companies allow billions of questionable dollars (often criminal and result of international tax evasion) to be invested in to the U.S. (for example into elite New York City real estate condos). This evidences the often unmanageable cross-border flow of funds and violation of money laundering laws. This also reflects globalization of the financial markets, insufficient state corporate laws, local real estate recording lows, and adverse impact on local  markets.  “Foreign Investment in U.S. (NYC) Real Estate.” New York Times (Feb. 8th, 2015). 
  • China hits Qualcomm for an almost $1bn fine for violating its antitrust rules concerning licensing and cross-licensing of intellectual property rights (patents). This escalates trade friction with the U.S. and multinationals to a higher level. “China and Qualcomm.” New York Times (Feb. 10, 2015). 
  • The U.S. filed a new case against China over “Demonstration Bases – Common Service Platforms.” These are geographical clusters of 150 similar firms of an industry or sub-sectors which receive lower-priced discounted services. The U.S. argues these discounts amount to an export subsidy. “U.S. Launches Challenge to Extensive Chinese Export Subsidy Program.” USTR News (Feb. 11, 2015). “White House Files New China Trade Case in WTO.” New York Times (Feb. 11, 2015). “U.S. -China Dispute over Export-Contingent Subsidies.” WTO News (Feb. 11, 2015) (relating to textiles, agriculture, medical products, light industry, chemical engineering, new materials and building materials). 
  • Editorial by the Financial Times against including  currency manipulation provisions in ‘Fast Track’. They are not workable. “US Congress Threatens Trade Deal with Currency Debate.” Financial Times (Feb. 12, 2015).
  • Chinese antidumping duty on steel from EU and Japanese firms found to be improper. “EU / Japan win in WTO Panel Against China.” Japan Times (February 13, 2015).
  • New Congressional proposal to extend the reach of U.S. law (Foreign Sovereign Immunities Act) to foreign states (terrorism financing).” JASTA and FSIA.” The American Lawyer (2.17.15).
  • A panel has been established by the WTO pursuant to a request by the EU concerning Boeing as to  extension of  U.S. tax measures (Washington state measures favoring domestic over imported goods). The EU alleges these are prohibited subsidies.” Panel Established on EU Complaint against U.S. Over Large Commercial Aircraft,” WTO News (Feb. 23, 2015)
  • Warren attacks arbitration provisions (Investor-State Dispute Settlement — ISDS provisions) in TPP. Warren and TPP.” Washington Post (2.25.15)
  • New proposed Internet regulations in China and recent Chinese antitrust decisions have the potential of significantly reducing the business opportunities of U.S. Internet, telecom, and social media firms in China. Part of broader trade relations between China and the U.S. raising issues of cybersecurity and national security. China has some valid reason to be concerned as well as the U.S. “China, Technology and Suspicion.” New York Times (Feb. 28, 2015).
  •  The New York Times argues that currency manipulation should be included in the TransPacific Partnership negotiations. “Role of Congress in Trade (Fast Track / TPP).” New York Times (March 2, 2015).
  • Investor-State Dispute Settlement provisions (ISDS) and the TPP. These provisions are important when investing in countries with weaker legal systems. It’s a mechanism of international adjudication that allows mitigating risks of foreign investments. “TPP and ISDS.” Wall Street Journal (3.3.15).
  • Do tech firms have an advantage over telecoms because of overseas tax avoidance? “Tech and Telecoms.” New York Times (March 2, 2015).
  • Obama criticizes China’s new rules for banking technology rules (source code, encryption, back-door key) and possible extension to other sectors. China is concerned about national security and the U.S. sees these rules as protectionism. “China’s New Technology Rules Concerning Source Code, Encryption, Back-Door Key.” New York Times (March 4, 2015).
  • The use of restrictions on international finance as trade sanctions is viewed as “weaponization of finance.” Imposes pain but changes behavior little. Perhaps even encourage counter-measures such as cyber attacks.  “Weaponized Finance.” Financial Times (March 4, 2015).
  • MNCs fighting U.S. lawsuits as to global human rights violations. S.Ct. supports them. “Companies and Human Rights.” New York Times (March 6, 2015).
  • Three Gulf airlines (Qatar, Emirates and Etihad) are under attack by U.S. carriers as state-owned enterprises that receive state subsidies. But these aviation issue do not fall under the WTO rules. Have separate bilateral ‘Open-Skies Treaties’ that govern this sector. “U.S. Airlines Attack Gulf Airlines for Subsidies.” Wall Street Journal (March 7, 2015).
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Global Taxation and International Arbitration for Investors … Two Critical Issues in Need of Resolution.

Posted on February 6, 2015 by Stuart Malawer

 

Obama and Froman (WP 5.3.13)

     Both China and the U.S. are independently addressing the issue of global taxation of their firms and multinationals doing business in their countries. Very interesting development. Another interesting event is the stalemate between the U.S. and the EU over allowing foreign investors (American firms) resorting to international arbitration rather than European courts under the proposed TTIP.
…. Interestingly both China & U.S. are now addressing tax avoidance by multinational corporations. “China and Overseas Taxation.” New York Times (Feb. 4, 2015).
…. Obama proposes to tax overseas cash of U.S. firms.Aggressive tax strategies are under attack. “Obama’s Tax Crackdown on MNCs.” Financial Times (Feb. 2, 2015).
…. China’s new security rules concerning technology impacting foreign tech firms are really trade restrictive. “China’s Self-Destructive Tech Crackdown.” New York Times (Jan. 30, 2015).
…. The ‘Investor State Dispute Settlement’ clause (ISDS) is causing major havoc in the TTIP negotiations between the U.S. and the EU.” “ISDS and U.S. – EU TTIP Negotiations.” Euractiv.com (Jan. 14, 2015).

 

 

 

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Cybersecurity, Cuban Trade and Chinese Global Taxation — New Issues for the New Year.

Posted on January 15, 2015 by Stuart Malawer
    Global Trade
     As this new year begins new issues of cybersecurity, Cuban trade, and Chinese global taxation have come into focus. They make for an interesting start of the new year. Here are some particulars:
“New Obama Legislation.” Financial Times (1.11.15).
….. Aggressive Virginia-Cuba trade mutually beneficial. Agriculture leads the way via 3 governors. “Virginia and Cuba.” Washington Post (1.8.15).
….. China has now started applying its earlier 1993 worldwide taxation statute to its nationals abroad. “China and Worldwide Taxes.” New York Times (1.7.15).
….. A trade response may be necessary for this state-sponsored cyber attack on a U.S. firm. “National Security & Sony Attack.” Washington Post (12.23.14).

 

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