Friday, December 11, 2009

Avoiding Unilateralism

Though not centered directly on international aviation law, Harvard Law School Professor Rachel Brewster's essay, Shadow Unilateralism: Enforcing International Trade Law at the WTO, 30 U. Pa. J. Int'l L. 1133 (2009), provides an instructive critique of one of international law's most touted judicial mechanisms: the World Trade Organization's dispute settlement system.  In Brewer's view, while the current system--embodied in the Understanding on Rules and Procedures Governing the Settlement of Disputes (full text available here)--represents a clear advance over the old General Agreement on Tariffs and Trade dispute settlement regime, it suffers from a flawed institutional design which "creates a need for the unilateral enforcement of trade rules" outside the scope of the WTO while simultaneously "provid[ing] legal protection" for this enforcement.  See id. at 1135.  Brewster argues that this is due to what she calls the "stall-and-withdrawl" loophole in the WTO's dispute settlement system.  States which are alleged to have abrogated WTO trade rules can continue to remain in violation until a dispute settlement decision is rendered--a process which takes, at minimum, 18 months and may, in fact, continue for years.  See id. at 1144 (discussing the Bush II Administration's imposition of steel tariffs in 2002 and their subsequent withdrawal over a year later after the WTO declared them illegal).  A State (or States) suffering economic harm due to another's unwillingness to adhere to its commitments under the WTO has (have) a strong incentive to undertake unilateral retaliatory measures rather than await a WTO decision.  As Brewer notes, such retaliation is afforded the same latitude under the dispute settlement process as the violation which prompted it. 

How is this relevant to international civil aviation, particularly since it is largely exempted from coverage under the WTO General Agreement on Trade in Services?  See WTO, GATS Annex on Air Transport Services (available here).  While trade in air services has traditionally been carried out at the bilateral level, particularly since the 1944 International Civil Aviation Conference which established the Chicago Convention, incremental but important change is underway.  The landmark U.S./EC Air Transport Agreement contains provisions allowing it to function as a plurilateral whereby non-parties may accede to the treaty.  See  2007 U.S./EC Air Transport Agreement, art. 18(5), 2007 (O.J. L 134) 4; see also Restatement (Third) of Foreign Relations Law of the United States sec. 312 (1987) (discussing plurilateral agreements).  This potentiality was actualized earlier this year when the U.S. and EC agreed to terms for Iceland and Norway's accession.  See Josh Mitchell, Norway, Iceland to Join "Open Skies" Pact with US, Dow Jones Newswire, Oct. 9, 2009 (available here).  It is conceivable that at some stage a "critical mass" of State parties will be reached, requiring a more sophisticated mechanism for settling disputes than the more informal consultation/negotiation/arbitration procedures commonplace in air services agreements.  See, e.g., U.S. Dept. of State, Current Model Open Skies Agreement Text, art. 14 (Jan. 10, 2008) (available here); cf. also U.S./EC Air Transport Agreement, supra, art. 18.  Even before such a "mass" is reached, enhanced regulatory harmonization between the current parties could demand the eventual establishment of a standing body with the competence and juridical power to settle disputes.  Before such efforts are undertaken, however, civil aviation authorities would be well served to scrutinize the WTO model, reflect on the criticisms offered by Brewer, and hopefully develop a system which disciplines global aviation trade through and within the rule of law.

http://lawprofessors.typepad.com/aviation/2009/12/though-not-directly-on-international-aviation-law-harvard-law-school-professor-rachel-brewsters-essay-shadow-unilateralism.html

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