~ Archive for Finance/Trade/Economics ~

“Third Spaces”

1

Whether you agree with her or not, Saskia Sassen has always written interesting things on globalization/transnationalism - often by thinking about it from unusual angles and geographies.  Her recent article on “third spaces” is no exception and should be of particular interest to international lawyers.  Earlier works, such as on the global city, should also be of interest since they crack open the divide between “national” and “international” and show how regimes and networks overlap, interact, concentrate power in new ways and have different applications — some of which we usually consider “legal” and some of which we do not.

With respect to formal law and regulation, it is worth thinking about her arguments that “[a] fresh type of segmentation is occurring inside the state apparatus, characterised by a growing and increasingly privatised executive branch of government aligned with specific global actors (notwithstanding nationalist speeches), alongside a hollowing out of the legislature whose effectiveness is at risk of becoming confined to fewer - and more domestic - matters.”  This decline of legislative power (and the privatization of government) is a big issue for domestic law in the US, with extensive “executive power” debates (small examples include this recent NYTimes article here and a Boston Globe article on the presidential candidates here - though many have argued that this increase was a trend under Bill Clinton as well), all too often without considering whether or not this is happening with respect to more “international” issues, whether increased power and privatization are linked, whether this is happening elsewhere in the world and if there is something larger to be considered.  And this should all be considered beyond the hot-button issues of the war on terror and include executive power in economic matters as well.

This also fits in nicely with notions of transnational regimes for economic policy-making (run by “experts”… “elites” might also be appropriate… perhaps these experts are more at ease in executive branches than in legislative… or are more able to get what they want?) per David Kennedy’s work.  Alas, the wonderful former HLS/Fletcher prof and student is now at Brown as VP for international affairs and a prof of international relations.  Congratulations to him, but surely a loss for HLS. 

Private International Law in the US

1

A very interesting post by Dan Harris at China Law Blog entitled “Who Needs International/Foreign Law? Not Us, We’re Americans” has set off a worthwhile discussion on the use (or non-use) of international/foreign law in the US in the private context.  The Transnational Law Blog also has an interesting follow-up entitled “Transnational Commercial Disputes in the USA Ain’t Easy“.  Rather than steal their thunder, I simply recommend reading the posts and responses.

Credit squeeze and international economic law

0

Even without getting into the scope/depth/existence/possibility of a US or more broad liquidity/credit crunch and/or economic downturn, this is an interesting column from Martin Wolf at the Financial Times on what might happen if there is a real crisis (or, as he frames it, what will happen because of a real crisis that exists now).

It is interesting to think how international economic law and regulation might adjust (or in some cases, be created in relatively unregulated areas) if there are concerns with various housing and credit markets, particularly as these were internationalized and securitized.  Might additional legal regimes be created?  How might claims in the current market play out as they expand to international parties?  If there is a big shift, as Wolf argues, certainly legal claims will follow (and are starting in subprime, as this Economist article notes), along with considerations of new regulatory approaches.  Will responses to any crisis be country-by-country or more universal?  Does it depend on if there is “decoupling” or not?  Certainly some have argued that there will be no decoupling (see, e.g. Nouriel Roubini’s blog) — but that does not mean that responses might not vary between different countries and different actors, as much Roubini hopes for more coordinated approaches.

Corporate Governance

0

Just a heads up, the HLS program on Corporate Governance has a few new working papers out, definitely worth looking at.

The paper on U.S. Securities Regulation in a World of Global Exchanges, also available through SSRN, should be of particular interest to international corporate lawers/scholars and people generally interested in the globalization of securities markets (especially the phenomenon of competition among exchanges, which raises all sorts of issues).

Wolfowitz Departure

0

Just a note: Anupam Chander has been posting tidbits and articles on the Wolfowitz scandal and the speculation on who might replace him.  It is a good place to look at for a quick summary and links to sources/etc., and he will probably keep updating it as the story continues to move along.

Ethiopian coffee trademarks

0

The ongoing attempts of Ethiopia, the original source of coffee, to trademark coffees under various regional names presents an interesting attempt to use IP rights, so often enforced in developing countries to limit copying developed country technologies (esp. medicines), to actually protect African property.  Here is an interesting article on the most recent developments in Ethiopia, the challenges by Starbucks, and the goal to extend the strategy to other goods and other countries.  The coffee issue has been address at Law.com, Fortune, and elsewhere as well, and Oxfam has waged a campaign in support of the Ethiopian position.  But it will be interesting to see if the strategy works and if it is extended and in the meantime it also raises interesting international IP issues. 

Chinese Investment in Africa

2

PostGlobal has an interesting discussion on the role of China in Africa, especially now that it is providing funds to Sudan.  AllAfrica.com is full of stories of other funds coming in, especially on the coattails of President Hu Jintao’s Africa trip.  It is an interesting debate, and one can see it in the project finance side as well as China steps up there, in a market already flush with cash (at least for the moment) that has weakened some of the more traditional players, who were used to being the only lenders/source of capital in town (and slanted the balance in terms of agreement drafting and the like).

And apparently China is not the only country stepping up interest in Africa, with Brazil and others getting into the field, though to a lesser extent. 

So as not to poach too much, we’ll leave the discussion for PostGlobal except for one quick thought — though there might be reasons to be concerned because of increasing resource extraction and legitimate questions of who benefits, is the West partly concerned because someone else is stepping up to the plate?  Does this have some early overtones of the Cold War money plays in Africa? 

France’s Valdez: Erika in court

1

The Erika case regarding the 1999 oil disaster in Brittany started today in France and promises to provide a lot of insight not only into French and EU law, but also into the modern IL views on the environment and the oil industry.  Here is a preview, along with the Le Monde description of the day. 

This case brings up obvious parallels with the Exxon Valdez disaster of 1989 and the subsequent litigation.  On a personal level, having recently living in Alaska, parts of Alaska are still recovering from the spill and a lot of oil was “left” as clean-up efforts began to cause more damage and interference than good.  Going to the Prince William Sound area and seeing the wildlife is a life-altering experience and there are many good people on all sides, from fishers to oil workers to environmental activists and tourists.  But it is still horrific to imagine the losses and many think it will never get back to how it used to be.

Of course there was also Exxon’s settlement with the State of Alaska, which remains controversial.  And in places like the Alaska Sea Life Center (funded largely by the Valdez payout), one gets an almost impressionistic view of the tension between the interests of Exxon and others as the exhibit does discuss the spill, but only in a mostly tangential way, before going on to more pictures of cute sea otters.  But people in Alaska remember the disaster vividly, and the Pratt Museum in Homer has a particularly moving and disturbing exhibit, complete with contemporaneous news and radio-wave coverage.

Alaska is such an incredible place, and we have to be careful as such places are fewer and fewer every day.  When I read of the “préjudice écologique” being argued in France, while I cannot understand the depths the feeling of harm are for those attached to the region and the sea — one can hardly think of a stronger connection than the fisherman to the sea– even a glimpse of it in Alaska shows there is a lot more than just economic damage or even “just” limited losses of animal and human life in these disasters.  The identity of many places rests with the sea, and disasters like these alter that identity forever.

On the private litigation side, the 9th Circuit, in Baker v. Exxon Mobile Corp., recently reduced the damages in private litigation (mostly by seafood processors but also tour groups, etc.) surrounding the spill, relying primarily on Cooper Indus. v. Leatherman Tool, 121 S.Ct. 1683 (2001), but remanding for the D. Court to put in $2.5 billion of damages.  This raises a whole host of issues about the role of punitive damages — great fodder for law and economics debates on who should bear the cost of such an accident.
Of course oil and energy are important and there is a balance somewhere, but one should remember the costs as well – not only in terms of major disasters but also everyday costs that are by and large absorbed by the public (and Alaska is a good canary in the coal mine for rising temperatures, with melting glaciers, dwindling animal populations, etc.) and especially by those who live off the see, as acknowledged at least somewhat in Baken v. Exxon.  Should the public absorb that cost?  How much of it, and at what price?

I am curious to see the defense strategy for allocation of blame in the Erika trial and if the parties go after each other.  Maybe that is France’s hope and concern at the same time.  There are plenty of potentially responsible parties, from Total to the boat owner to the captain (who is apparently not at the trial) and crew to the rescue/recovery crews. 

Some of the initial arguments by Total, that there is an abuse of law and essentially an attempt to get legislation from the bench, smell of classic US-arguments against “judicial activism”, which, borrowed from the US, is increasingly (and in my view unfortunately), being argued around the world.  I wonder if there was a big outcry against “judicial activism” when the 9th Circuit proclaimed its own determination of damages in Baker v. Exxon (of course that was in the private context, but still…). 

This trial, though in a domestic jurisdiction, also brings up a great swell of international issues — international parties, the international oil industry, domestic companies within that system, etc.  It is really at the often blurry divide between international and domestic law, especially if (as I suspect) in civil law France they will look around to see what people/scholars/etc. think, including IL/environmental scholars.  This should be interesting for anyone even remotely interested in environmental law, no matter the outcome.

Bird Flu and International Trade

0

With the recent finding in Britain of turkeys infected with the bird flu, Russia and Japan have put in place bans on British poultry.

This raises an interesting issue at the intersection of international health law and international trade.  When do countries violate international trade regimes by banning products from other countries?  Should it matter if there are potential trade violations, if there is even the slightest risk of the spreading of disease?  If trade wins out, especially through powerful international trade regimes, who is protecting the health concerns of the people?  It is interesting to note that this also comes up in a more general way because Russia declared US beef to unhealthy, and is now apparently loosening its stance somewhat. 

The US saw it as trade protectionism, but some have argued that there actually are reasons to be concerned.  A similar situation came up with US poultry in Russia.

A fascinating case is Europe’s attempts to ban genetically modified foods, which the WTO struck down.  Is this a case of international trade elites overruling domestic political concerns, or is the WTO right that there was insufficient scientific evidence to show the dangers of genetically modified food?

Food production and distribution is increasingly international and this raises all kinds of concerns not usually at the forefront of international law thinking, but potentially of vital importance.  Another interesting side point is just how long international cooperation has been going with respect to international animal health concerns.  According to the World Organisation for Animal Health (OIE) website, it predates the United Nations. 

The interaction of experts in international trade and international health, coming to decisions that often supersede those of domestic groups, seems fascinating and complicated.  “Private” and corporate regulation, which is supported by an international legal regime with an enforcement mechanism, has more force than the WHO, which lacks any implementation system.  Is there an imbalance, or are domestic counterweights sufficient?  I am no expert in the international trade of food products, and any comments/etc. would be welcome.

Protected by AkismetBlog with WordPress