European Yearbook of International Economic Law 2019

Table of Contents

1. Frontmatter

2. 100 Years International Labour Organization

   1. Frontmatter

   2. The ILO as an Actor in International Economic Law: Looking Back, Gazing Ahead

      Anne Trebilcock

      Abstract

      This essay traces over time the tripartite International Labour Organization’s mission and means of action as they relate to international economic law since its founding in 1919. The article highlights key markers along the road to social justice, from the ILO’s constitutional origins to major Declarations (on the ILO’s mission and purpose, on fundamental principles and rights at work, and on decent work and social justice) to the recent ILO Centenary Initiatives. The interplay between the ILO’s work and that of international financial institutions as well as developments in areas such as green jobs in response to climate change, and business and human rights, are briefly explored. Lamenting the largely (and unnecessarily) divergent paths taken by international economic law and transnational labour law, the article identifies several possible avenues to bring them closer: techniques of general international law, use of opportunities created by the 2030 Sustainable Development Agenda, and other ideas put forward by various observers on how the ILO—with its stress on social dialogue—can, in partnership with other multilateral institutions, be more effective to achieve decent work for all on a sustainable planet.

   3. The ILO and the New ‘Common Sense’: Reflections on a Centenary

      Emilios Christodoulidis

      Abstract

      Taking the cue from Alain Supiot’s important defence of the ‘spirit of Philadelphia’ the paper argues that the Philadelphia Declaration of 1944 renewed and deepened the commitments on which the ILO was set up in 1919, and seeks a firm theoretical footing in Supiot’s defence of the law’s ‘dogmatic’ foundations. It then goes on to track a double mutation, firstly away from political-constitutionalist protection of work toward a form of human rights protection, and secondly away from ‘hard’ institutional processes to ‘soft’ aspirational standards. This gradual migration allows a certain decisive separation to install itself and organise the field, a break between a pragmatic common sense on the one hand, and on the other an aspirational, if not utopian, discourse. This separation misreads and undercuts the integrity of international labour law that depends on holding together its organising principles and their instantiations.

   4. Decent Work in Global Supply Chains: Mapping the Work of the International Labour Organization

      Valentina Grado

      Abstract

      Global business production nowadays functions through so-called global supply chains (GSCs). The latter encompass a broad range of commercial activities that span over the design, production and distribution of goods and services to consumer markets. Although GSCs have created millions of jobs and opportunities for economic and social development, they have been at the same time in the public spotlight due to both their several and serious disregards of labour standards and the significant decent work challenges they pose. This chapter assesses the activities undertaken by the International Labour Organization (ILO) on the crucial topic of decent work in GSCs. First, it illustrates and critically analyses the work of the (2016) 105th Session of the International Labour Conference dealing with this issue. Second, it describes and discusses the further significant instruments adopted by the Governing Body to ensure decent work in GSCs, including respect for international labour standards. Finally, it evaluates the adequacy of the recent and foreseen ILO’s initiatives in the field of GSCs in delivering better labour conditions for workers within them.

   5. Supervision of International Labour Standards as a Means of Implementing the Guiding Principles on Business and Human Rights

      Shin-ichi Ago

      Abstract

      The UN Guiding Principles on Business and Human Rights, contained in a resolution adopted by the Human Rights Council, are basically a non-binding instrument that does not legally oblige UN member States, nor enterprises, to implement the principles enshrined therein. However, the UN organs, such as the Human Rights Council, have been following up the recommendations made in the resolution and set up various mechanisms, such as the Global Forum on Business and Human Rights to review the states’ and enterprises’ practices or the Inter-governmental Working Group, to, inter alia, try to formulate a legally binding treaty. Specialized Agencies, and other regional institutions have, as a matter of their own mandate, also actually responded to the recommendation of the Human Rights Council and conducted a number of activities that amounted to an actual follow-up of the original instrument. This chapter analyses those activities conducted by the ILO on their own, but which have a bearing on the implementation of the UNGP in practice. It concludes that the historical (over 90 years old) mechanism of supervision plays an important role also here in the implementation of the UNGP, in the area of labour and social rights, with a caveat that rights protected by international labour standards are basically collective (i.e., collective employment relations are targeted in most cases, except for instruments, such as those against forced labour where infringement of an individual’s right can also be addressed), and individuals cannot lodge complaints and demand remedy. Observance of international labour standards is a matter of the government and enterprises are not directly accountable to the ILO standards. Reference is also made to the peculiar ILO instrument called Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy, which may serve as an additional tool to implement a part of the UN Guiding Principle, but with lesser degree compared to the traditional mechanisms to supervise the application of the international labour standards.

   6. Labour Safeguards of International Financial Institutions: Can They Help to Avoid Violations of ILO Core Labour Standards?

      Franz Christian Ebert

      Abstract

      A number of International Financial Institutions (IFIs) at the global and regional level have adopted labour-related safeguard policies to avoid that projects financed by them contribute to labour standards violations. This chapter analyses the potential of these safeguards to contribute to the protection of the Core Labour Standard, as defined by the ILO. To this end, the chapter looks, first, at the safeguards’ legal design. It reviews the normative content of selected IFI labour safeguards and assesses their relation with relevant ILO instruments, highlighting a number of inconsistencies in this regard. Furthermore, the chapter scrutinizes the scope of relevant labour safeguards, revealing several loopholes that may provide borrowers with avenues to avoid many of the safeguards’ requirements by adjusting the project structure. Secondly, the chapter assesses the safeguards’ practical implications. To this end, it examines the mechanisms established by several IFIs to prevent and remedy violations of the safeguards’ requirements. In addition, the chapter reviews evidence on the safeguards’ application, highlighting positive outcomes in several cases despite an overall mixed picture. The concluding section points to some general caveats that may hamper the safeguards overall effectiveness and emphasises the need for more comprehensive mechanisms to protect workers with regard to IFI activities.

   7. Linkages of Trade, Investment and Labour in Preferential Trade Agreements: Between Untapped Potential and Structural Insufficiencies

      Henner Gött

      Abstract

      Labour provisions are an increasingly regular component of preferential trade agreements (PTAs). The overall goal of these provisions is to enhance the protection and promotion of labour standards in the context of trade and investment liberalization by creating trade-labour and investment-labour linkages within the PTA. This chapter examines the scope and content of contemporary trade-labour and investment-labour linkages in some of the major latest-generation PTAs, analyzing both substantive provisions and institutional mechanisms for their implementation.

      The chapter argues that the examined substantive provisions have considerable potential for the protection and promotion of labour standards in the context of trade and investment liberalization. However, whether this potential can be tapped largely depends on how they are implemented. A recurring issue in this respect is that the pertinent implementation mechanisms for labour provisions suffer from structural insufficiencies that persist even in latest-generation PTAs. Against this background, there is a need for a systematic and structural revision of PTA labour provisions, for which the chapter provides some suggestions.

   8. From International Framework Agreements to Transnational Collective Bargaining

      Reingard Zimmer

      Abstract

      Law and policy with regard to collective agreements have traditionally been the preserve of individual nation states. Due to the internationalization of business, the necessity of responses from the workers’ side became more and more evident and global trade union federations started to negotiate and sign global agreements with transnational companies. Today, numerous such international framework agreements with the aim to protect social standards are in place. The agreements developed over time and as industrial relations within Europe deepened, also European Agreements were concluded, and the terminology changed towards transnational collective agreements. With this development, the aspect that the agreements are the product of social dialogue and thus a form of collective bargaining is stronger emphasized. The content of agreements with European scope highly differs from the content of international agreements. While the latter primarily deal with minimum social standards, European agreements cover a wide range of subjects, restructuring being the main topic. New developments concerning transnational agreements can be highlighted with the conclusion of new agreements like the Bangladesh Accord on Fire and Building Safety, which contains not just a stronger mechanism of enforcement, but also a legally binding dispute resolution mechanism, which is a novelty and will have its impact on the composition of new transnational agreements. Summarizing, the development of transnational collective agreements can be characterized as a step towards the internationalization of industrial relations.

   9. The ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy Revisited: Is There a Need for Its Reform?

      Jernej Letnar Černič

      Abstract

      The field of business and human rights has recently seen many seminal developments in the creation of national and international binding and soft law standards in order to protect human dignity of rights holders. This article revisits the function, role and scope of the 2017 version of the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy. It asks if there is a need for its reform? It first provides in Sect. 2 a brief historical background and explore the its legal nature. Section 3 examines the contents of the revised Tripartite Declaration focusing on labour and/or human rights provisions thereby providing a critical account of provisions included or omitted. Section 4, thereafter, describes and critically analyses its implementation tools from promotion to interpretation procedure and provides a critical assessment of their usefulness for rights-holders. Equipped with the knowledge from previous sections, Sect. 5 thereafter provides an overall analysis and assessment of the recent revisions of the ILO Tripartite Declaration outlining both its advantages and disadvantages; places it in the wider context of standard-setting in business and human rights and provides some suggestions how to reform it and to better realize its potential. This article, therefore, argues that the ILO Governing Body should rephrase the vague and conditional language of the Tripartite Declaration and improve its implementation tools, particularly the interpretation procedures by opening it to individual claimants. In this way, it would emancipate the rights-holders to enforce the core labour rights included in the Declaration against adverse corporate conduct.

3. Regions

   1. Frontmatter

   2. Grading Trump’s China Trade Strategy

      Steve Charnovitz

      Abstract

      Although much has been written about the ongoing trade war between China and the United States from 2017 to early 2019, this literature omits detailed examination of the substance of the US trade complaints about China. This article seeks to fill that gap in the literature by unpacking the 20 most prominent complaints that are being levelled by the Trump Administration. The article finds that half of the complaints involve behaviour that is contrary to WTO rules and yet the Trump Administration has lodged only three WTO cases against that behaviour. The Trump Administration justifies this omission on the ground that WTO dispute settlement is not capable of resolving legal complaints against China’s nonmarket economy and that many of the Chinese measures characterized in this article as WTO-illegal are actually permitted by the WTO. The article suggests that the real reason why the Administration chose not to bring multiple new WTO cases against China is that the Administration prefers to confront China with power-based measures in the form of unilateral tariffs. Moreover, robust WTO dispute settlement is viewed by the Trump Administration as unwanted international control over disguised trade protectionism long favoured by US trade officials.

   3. The Renegotiation of NAFTA: The “Most Advanced” Free Trade Agreement?

      Jean-Michel Marcoux

      Abstract

      Shortly after the renegotiation of the North American Free Trade Agreement (NAFTA), the US administration depicted the United States–Mexico–Canada Agreement (USMCA) as the “most advanced trade deal in the world”. In order to assess the extent to which USMCA genuinely contributes to advance free trade, this article proposes an analysis that builds on the context in which the renegotiation occurred. In light of the political and legal context underlying the renegotiation process, how can differences between NAFTA and USMCA be explained? The article suggests that, despite some notable exceptions, several changes included in USMCA reflect the landscape in which the renegotiation was held and are hardly reconcilable with the consideration of the agreement as the most advanced trade deal. In order to demonstrate this claim, the article proceeds in two steps. First, it sheds light on the political discourse of the negotiating Parties, ongoing trade disputes and recent free trade agreements that all constitute an integral part of the context in which the negotiations occurred. Second, by focusing on the text of USMCA, it demonstrates that several provisions either reflect a bilateral approach that can potentially restrict trade or partially replicate the language of other free trade agreements.

   4. EU Free Trade Agreements as an Instrument of Promoting the Rule of Law in Third Countries: A Framework Paper

      Maryna Rabinovych

      Abstract

      This contribution explores the EU FTAs as an instrument of promoting the rule of law to third states. The background to this research is formed by the trend towards the rise of normative contestation globally and EU-wide; the EU’s shift to the “deep” bi- and plurilateral trade liberalization agenda following the deadlock of the WTO Doha Round and its ongoing efforts to strengthen the coherence of its external action. First, the paper refers to the rule of law as a fundamental value of the EU and operationalizes it. Next, it explores the foundational (“framework”) foreign policy and legal prerequisites behind the EU’s promotion of the rule of law through FTAs (the interplay between economic and normative objectives in the EU external action, the nature of EU power in external trade relations, its bargaining power in trade negotiations, legal basis and scope of FTAs that can be instrumentalised by the EU to promote values). Finally, the paper uses the example of administrative cooperation and public procurement chapters of three categories of EU FTAs (SAAs with Western Balkans, AAs with Eastern Neighbours and EU-CARIFORUM EPA) to illustrate the rule of law promotion potential of the EU FTAs.

   5. Challenges to International Investment Law Within the European Union

      Luke Tattersall

      Abstract

      The following chapter considers the challenges facing international investment law and investor–State arbitration within the European Union. Particular attention is paid to two aspects, firstly the Court of Justice of the European Union’s decision in the case of Achmea which held that investor–State arbitration clauses contained within bilateral investment treaties are contrary to EU law and therefore invalid; and secondly the decisions of the European Commission in which it held that awards paid out by States to investors constitute a form of illegal State aid under EU law with the result that all of the sums along with interest must be recovered from the investor. These developments, when taken together, have broad ramifications for the sustainability of international investment law within the European Union and create wider concerns both for States and investors situated outside of the EU but who have a business presence within Europe or who may look to enforce arbitral awards within the domestic courts of Member States. The majority of the developments in this area have occurred over the course of the past 18 months in 2018 and 2019, the chapter therefore compiles and analyses all of the relevant investment awards, domestic court decisions, judgments and opinions of the European Union, along with proclamations and statements made by the Member States and the European Commission in order to provide timely analysis on contemporary issues facing practitioners acting on behalf of States and investors.

4. Institutions

   1. Frontmatter

   2. Rule of Law in International Monetary and Financial Law: Reviving Old Spectres

      Marcin J. Menkes

      Abstract

      The tenth anniversary of the Lehman Brothers insolvency, which entailed the global economic crisis, calls for a critical reexamination of the relationship between law and finance (economics). Should law be treated as an instrument of economic growth—in accordance with economic theory? Or is it the economy that should be harnessed for the society within its socio-normative framework? Accordingly, what is the normative social expectation in regards of (economic) freedom and (economic) security? Not surprisingly such dilemmas, a characteristic feature of the post-modernity, resulted in the legitimacy crisis of international monetary and financial law, which in turn brought the Rule of Law (RoL) to the forefront of the current debate on the reform of international economic law. Although RoL may provide much needed assistance in our pursuit of a more sustainable growth and equitable society, it can only do so, if we learn from past mistakes. Hence, current policies of the IMF in respect of the RoL should be put in context of complex relationship between international economic law and international economics.

   3. The Appellate Body of the WTO: An International Court by Another Name

      Fernando Dias Simões

      Abstract

      Albeit originally designed to review a few cases per year, the WTO’s Appellate Body quickly became the busiest international dispute settlement forum. Ironically, as it faces the looming threat of paralysis, this quasi-court is also being suggested by some as a prototype for other areas of international adjudication. The Appellate Body is truly at a defining moment in its history. WTO member states should reflect about the role that this adjudicatory body plays as an international tribunal and whether its original features still serve its mandate. The current number and complexity of its caseload calls for an upgrading of its structure. This chapter argues that the remarkable work conducted over the last decades by Appellate Body members makes them worthy of being treated as real judges. While this proposal will not be a panacea for all of the ills of the Appellate Body, and political consensus is increasingly harder to achieve, moving Appellate Body members to a full-time status could enhance the gravitas of their position and reinforce public perceptions of authority and legitimacy.

   4. Overview of WTO Jurisprudence in 2017

      Kholofelo Kugler, Faith Pittet, Saweria Mwangi

      Abstract

      This article presents an overview of the World Trade Organization (WTO) disputes adopted by the WTO’s Dispute Settlement Body (DSB) in 2017. These disputes are the panel reports in Canada – Welded Pipe, EU – Poultry Meat (China), China – Cellulose Pulp, and Indonesia – Chicken and the panel and Appellate Body Reports in Russia – Pigs (EU), US – Anti-Dumping Methodologies (China), US – Tax Incentives, EU – Fatty Alcohols (Indonesia), and Indonesia – Import Licensing Regimes. On each of these cases, the article provides an overview of the key panel and Appellate Body findings. It also provides observations on the most salient points expressed by the panel or the Appellate Body in some of the reports. This article reports on the disputes chronologically, by order of their date of adoption by the DSU.

5. Book Reviews

   1. Frontmatter

   2. Irmgard Marboe, Calculation of Compensation and Damages in International Investment Law, 2nd Edition

      Oxford University Press, 2017, ISBN 9780198749936 Eleni Methymaki

      Abstract

      Irmgard Marboe’s second edition of Calculation of Compensation and Damages in International Investment Law is a timely update of a seminal work in a field that is subject to dynamics of constant change. Valuation of damages and compensation has been acquiring increasing significance in international law and adjudication for some time, and will continue to do so, as the recent judgment of the International Court of Justice in the case concerning Certain Activities Carried out by Nicaragua in the Border Area (Costa Rica v Nicaragua) demonstrated. The judgment of the Court in this case revealed many of the complexities with which international judges and arbitrators have to deal in these type of proceedings.

   3. Duncan French and Louis J. Kotzé (Eds.), Sustainable Development Goals – Law, Theory and Implementation

      Edward Elgar, 2018, ISBN 9781786438751 Winfried Huck

      Abstract

      The 17 Sustainable Development Goals (SDGs) and their related 169 targets were set by a resolution of the United Nations (UN) on 25 September 2015 titled “Transforming our world: the 2030 Agenda for Sustainable Development”. Leaders of the Member States went to New York in September 2015, not to celebrate the UN’s 70th birthday but to conclude unanimously in favour of the blue planet we all inhabit and for those, in particular, whose living conditions remain poor. Inequality, as a natural phenomenon e.g. in landlocked developed countries or as a human caused phenomenon provoked through corruption and violence causes poverty, hunger, and blatant forms of discrimination. Enormous disparities of opportunities can be detected throughout the world where wealth and (corporate) power, quite often deprive cultures and people from their natural rights. Globally, gender inequality remains a key challenge, in particular for women and girls. The survival of many societies, and of the biological support systems of the planet, seems in times of climate change at risk. The SDGs, entered into force on 1 January 2016, are described by the UN as integrated and indivisible and are balancing three dimensions of sustainable development: the economic, social and environmental.

   4. Armin Steinbach, EU Liability and International Economic Law

      Hart Publishing, 2017, ISBN 9781509901593 Jens Hillebrand Pohl

      Abstract

      Over the 10 years since the Lisbon Treaty, the European Union has increasingly entered into international trade and investment agreements. These are agreements under international law, but they also form part of EU law within the framework of EU competences. As affirmed by the European Court of Justice, Union liability for the breach of EU law is essential to ensure the law’s full effectiveness. This leads to the question of whether an individual can hold the EU liable under EU law for violations of international economic law. The book under review, a revised doctoral dissertation by Armin Steinbach, addresses this matter, and in so doing, puts forward a framework within which the conditions for liability can be fruitfully analysed.

   5. Robert Howse, Hélène Ruiz-Fabri, Geir Ulfstein, Michelle Q. Zang, (Eds.), The Legitimacy of International Trade Courts and Tribunals

      Cambridge University Press, 2018, ISBN 9781108424479 Gianpaolo Maria Ruotolo

      Abstract

      The issue of the legitimacy of international law, of its institutions, and of its dispute settlement systems has always been paramount to international law scholars.

   6. Valentina Vadi, Proportionality, Reasonableness and Standards of Review in International Investment Law and Arbitration

      Edward Elgar, 2018, ISBN 9781785368578 Marcin J. Menkes

      Abstract

      Valentina Vadi, professor at Lancaster University Law School, is a prolific author who skilfully combines different fields of international law with international investment law (IIL). Her books cover the interplay of IIL with public health or cultural heritage. Vadi’s “well-established reputation in studies of the interaction of other fields of law with international investment law” is acknowledged on the back cover of the book by the one and only Prof. M. Sornarajah. This time, she invites us for yet another legal cross-country journey. Proportionality, Reasonableness and Standards of Review in International Investment Law and Arbitration is an attempt to subject these institutions, oft-quoted but frequently lacking adequate methodological rigour, to systematic analysis. The topic of the book presents a daunting task even for such a well-established author to tackle in as much as it attempts to consider the matter in a concise yet carefully structured manner. Vadi’s approach aims to do this mostly by synthesising the substantive analysis of even more renowned colleagues. As a result, the reader may be inspired by the spectrum of problems and yet somewhat puzzled about the central questions behind these problems; thus the more fundamental question of who should reach for this book and how they read it is raised.

   7. Stephan Griller, Walter Obwexer, and Erich Vranes (Eds.), Mega-Regionals Trade Agreements: CETA, TTIP, and TiSA – New Orientations for EU External Economic Relations

      Oxford University Press, 2017, ISBN 9780198808893 Maria Laura Marceddu

      Abstract

      Mega-Regionals Trade Agreements: CETA, TTIP, and TiSA – New Orientations for EU External Economic Relations is a book about how three mega-regional agreements (CETA, TTIP, and TiSA) impact on, shape, and re-orient the EU’s external relations and, more broadly, the international economic order.

   8. Constantine Michalopoulous, Aid, Trade and Development. 50 Years of Globalization (Palgrave Macmillan, 2017, ISBN 9783319658605)/Clair Gammage, North-South Regional Trade Agreements as Legal Regimes. A Critical Assessment of the EU-SADC Economic Partnership Agreement (Edward Elgar, 2017, ISBN 9781784719616)

      Maryna Rabinovych

      Abstract

      The post-World War II era has been marked by the multi-dimensional globalization, leading to the expansion and sophistication of political and economic interdependencies between the developed and developing countries. Not surprisingly, the expansion of global trade, investment and aid flows and the proliferation of respective international law and governance structures have been accompanied by intense policy and scholarly debate that, in turn, has been shaping crucial turns in the trade and aid policies of major powers. With an ambitious task to “trace the evolution of thinking and practice of developed and developing country policies on trade and foreign aid” over the period from the 1960s to modern days, Constantine Michalopoulous narrates it as a story of uncertainty, ambitious hypotheses, trials, errors, and the correction of mistakes. Interestingly, the author declines a strictly chronological approach in favour of looking at turning points in the history of development cooperation, such as the 1973 oil crisis, the debt crisis and the debates on debt relief in 1980s, the inception of the WTO, the challenge of aiding post-Soviet countries following the Union’s dissolution and the Greek crisis. While providing an in-depth account of ideas, shocks, and various actors’ policy reactions that shaped modern development economics, Michalopoulous, however, acknowledges the open-endedness of many conceptual economic questions, such as the interplay between trade liberalization and economic growth/poverty reduction, the redistributive effects of trade liberalization and the determination of aid effectiveness. As such, “Aid, Trade and Development” contributes to voluminous literature, directed to explaining the factors of development, by arguing that “both aid and trade can benefit development, but whether they actually do depends very much on coherent supportive policies in both developed and developing countries” (p. 4). More specifically, it falls within the research strand that studies the nexus between trade liberalization (market openness) and development (economic growth, poverty alleviation). Simultaneously resonating with the 1977 Brandt Commission’s Report “North-South: A Programme for Survival” and modern focus on policy coherence in the global governance for sustainable development, the contribution, however, does not touch upon the modern institutional and legal explanations of development (reflected inter alia in New Institutional Economics and governance paradigms of international development).