Trade & Development

President Obama in Kenya

Photo Credit

President Obama’s current trip to East Africa (Kenya and Ethiopia) and the recent extension of the African Growth & Opportunities Act (AGOA) are an opportunity to ponder the tenuous link that, without sound domestic policies, exists between trade and poverty reduction. A recent PBS report on Angola provides a stark illustration:

Angola is the second-largest oil producer in sub-Saharan Africa. However, about 36% of the population lives below the poverty line, reports the African Development Bank (AfDB). The country is reportedly flush with money from oil and diamonds; yet Angola ranks near the bottom of the U.N. Human Development Index (149th out of 187 countries).

Angola’s capital, Luanda, has been ranked as the world’s most expensive city for expatriates — beating out Tokyo, Hong Kong, and Moscow. Angola also bears the unwelcome distinction of being the country with the highest child mortality rate in the entire world. The World Bank reported in 2014 that 167 out of every 1,000 children born alive in Angola were likely to die before reaching the age of five. And the government just proposed to cut the health budget by 30%.

What apparently abounds in the country, and accounts for these discrepancies is corruption. Corruption, says Transparency International (TI), is “. . . the abuse of entrusted power for private gain”. Economically, TI continues, it depletes national wealth as corrupt politicians invest scarce public resources in projects that will benefit them rather than their communities. In Angola, judges drive jaguars and the President’s daughter is Africa’s youngest billionaire. Angola is one of the least transparent countries in the world and one of the most corrupt. It is ranked by Transparency International at 161 out of 175 countries and as fifth (5th) from the bottom in Sub-Saharan Africa.

Angola is not the only corrupt country in Africa; nor is corruption restricted to the African continent. Other countries share this scourge. However, the disparities between the wealth generated by the exports of this oil-rich country and the stark conditions in which one-third of its population lives help to shine a bright light on the criminal consequences of corrupt domestic policies.

Angola will, undoubtedly, continue to benefit from its ability to export its oil under AGOA. Trade alone, however, can only do so much.

As we continue to explore this topic, we will address some questions that occurred to us about the connections between corruption and the legacy of colonialism and the present role of the companies doing business in Africa.

More Good News on Trade: Cracks in US Embargoes

What are two things that Cuba and Iran have in common? First, a US trade embargo which has been in place for decades. Second, emerging cracks in these embargoes that promise new, if limited, trade opportunities.

Iran Embargo

Concerns about Iran’s nuclear ambitions had resulted in multilateral sanctions against Iran, imposed by the United Nations, the European Union, and the United States. It is these sanctions that are credited with bringing Iran to finally conclude a deal.

The just-concluded nuclear pact with Iran indicates that the rest of the world should soon be lifting their embargoes against doing trade with Iran. Not so with the United States. US sanctions against Iran, unfortunately, go beyond these security concerns. They also have to do with regime change – the hope that pressure on the Iranian economy will lead to political change.

So, while the rest of the world can expect to begin resuming normal business activities with Iran, US sanctions imposed by the US Congress will remain in place. US trade with Iran will be limited to imports from Iran of food and carpets and the export to Iran of replacement parts for civilian airplanes. In the words of this Washington Post reporter,

. . . for US firms, the agreement means pistachios, airplane parts and carpets.

Persian Rug at the Louvre  (Courtesy of Wikipedia)

Persian Rug at the Louvre (Courtesy of Wikipedia)

Cuban Embargo

Unlike the Iran sanctions, the US embargo against Cuba has been unilateral in nature. The United States is the only country in the world which maintains this outdated cold war stance against Cuba. On October 29, 2014, the UN General Assembly voted for the consecutive 22nd year in support of a resolution urging an end to the US blockade of Cuba.

Like the Iran sanctions, the US embargo against Cuba is driven by a desire for regime change. Nevertheless, with the congressionally-imposed embargo still in place, Executive action has carved out limited opportunities for US-Cuba trade and travel. A limited list of commercial goods and services – primarily those of independent craft producers can also now be imported from Cuba into the United States. In fact, it’s easier to produce the list of items, including alcohol and tobacco products, which cannot be imported for commercial use from Cuba. However, if you fall within the category of persons allowed to travel to Cuba, you can bring back your own, limited, supply of Cuban cigars and rum.

The Future

Should the US Congress fail to ratify the Iran deal, the United States will, as it does in its relations with Cuba, again be isolated on this issue. Diplomatic ties are key to fostering and smoothing commercial relationships. These are just being re-established with Cuba, and remain broken with Iran. Still, we can hope that more cracks will continue to appear in these sanctions barriers to trade until they are entirely whittled away.

Trade Happenings

Since the start of 2015, there have been several interesting developments on the trade front. Here are some highlights:

Flag of Cuba

US-Cuba Relations:  Previous posts on ILG have discussed the improved tenor of US-Cuba relations, including some limited opportunities to trade with Cuba and lifting of designation of Cuba as a state-sponsor of terrorism. These developments have been followed by news of plans to re-establish direct phone links, increased flights and launch of a ferry service between Florida and Cuba, and the arrival of Airbnb and of Netflix in Cuba. Nevertheless, the laws imposing the U.S. embargo against Cuba remain in place and are being enforced. This includes the repressive Helms-Burton Act which extends the U.S. embargo to non-U.S. actors. As a result, non-U.S. persons may still be penalized for taking actions in Cuba that some U.S. persons are now able to do. And, because of the embargo, while it will be possible to import goods and services from independent entrepreneurs in Cuba, goods will still be subject to higher tariffs than those placed on the goods of most U.S. trade partners. Legislation to normalize trade with Cuba has been introduced in the U.S. House and Senate (HR 403, HR 274, HR 735, S 491). However, Congress is now focused on issues more essential to the Obama Administration trade agenda.

US Trade Agenda:  Legislation to provide Trade Promotion Authority (TPA) to President Obama has been introduced in Congress. TPA gives the U.S. President a mandate from the U.S. Congress to negotiate trade agreements that meet specified criteria. Also known as “fast-track”, TPA has been a key tool of U.S. trade policy since 1974 but lapsed in 2007. As we discussed in an earlier post, the Republican-led Congress provides President Obama with his best hope of getting TPA enacted in time to successfully conclude ongoing trade negotiations that face strong opposition within his own party. With the introduction of TPA legislation, a furious battle has begun to sway U.S. legislators to vote for or against. As always, it will be a close fight.

Courtesy of Wikipedia

Courtesy of Wikipedia

Trade Preferences, in the form of the Generalized System of Preferences (GSP), is another key tool in U.S. trade policy. GSP allows over 5,000 products from about 127 developing countries to enter the U.S. market duty-free. The program helps exports from developing countries to be competitive in the U.S. market. U.S. importers rely on the program to access lower-priced consumer goods and manufacturing inputs. The program has been lapsed since August 1, 2013, disrupting many small traders who rely on its benefits. Some members of Congress have been reluctant to renew GSP legislation without taking steps to exclude countries like Brazil and India which, they believe, are not compliant enough on issues of importance to the U.S. However, legislation to extend GSP for a short period has been introduced into Congress.

So too, has legislation to extend the Trade Adjustment Assistance (TAA) which provides federal funding to retrain workers who have lost their jobs as a result of a foreign trade. TAA is current but scheduled to lapse this year, unless extended. TAA is favored by many Democrats. According to reports, there are efforts to bundle these, and other, trade issues into one piece of legislation that will have something for everyone. Early results show the risk of this strategy, including the possible demise of all these issues.

On the Job! Postdoctoral Fellowships on the legitimacy of International Courts and Tribunals

Job Description

Up to five 3 year postdoctoral fellowships are available at PluriCourts, a Centre for the Study of the Legitimate Roles of the Judiciary in the Global Order, a multidisciplinary Centre of Excellence at the Faculty of Law, Department of Public and International Law of University of Oslo.

The postdoctoral researchers will study international courts and tribunals (ICs) in one or more of five issue areas: human rights, trade, investment, international criminal courts and the environment. There is a slight preference for research on human rights and trade.  The research should apply methodology from the fields of political science, philosophy and/or law, with a slight preference for applicants in political science or political philosophy.

The candidate may be assigned a 10 % workload of tasks including teaching, supervision or other relevant tasks.

About PluriCourts

PluriCourts is a Centre of Excellence funded by the Research Council of Norway. The Centre is based at the Faculty of Law, Department of Public and International Law of the University of Oslo. Co-Directors of the Centre are Andreas Føllesdal (professor in political philosophy) and Geir Ulfstein (professor in international law).

The primary research objective of PluriCourts is to analyze and assess the legitimate present and future roles of ICs in the five sectors listed above. For important detailed information about the research agenda and PluriCourts, visit PluriCourts’ research plan.

More information is available here

On the Job! Assistant Professor of International Law at Graduate Institute Geneva (deadline 15 Feb.)

The Graduate Institute of International and Development Studies in Geneva, Switzerland, invites applications for a full-time position at the rank of Assistant Professor in International Law (pdf) with a specialization in one of the following areas :

  • International Economic Law – trade law, investment law, intellectual property and/or financial regulation
  • Protection of Human Dignity – human rights, humanitarian law, international criminal law and/or transitional justice
  • International Environmental Law – climate change, energy law, and/or natural resources management
  • Transnational Law – transnational business transactions, commercial arbitration, alternative dispute settlement, transnational litigation

starting on 1 September 2015 or on a mutually agreed-upon date.

Candidates are expected to have an excellent background in international law and be prone to interdisciplinary dialogue.

Applicants should have a doctoral degree prior to the start of their contract.

All candidates must be able to supervise master’s and doctoral theses and to teach graduate students in both disciplinary and interdisciplinary programs, including general courses in International Law and in their own area of specialization.

The teaching language is either English or French. Prior knowledge of French is not required, but the successful candidate is expected to acquire at least a passive knowledge of it within two years of being hired.

Applications, including a motivation letter, a detailed curriculum vitae and a list of publications –  but excluding letters of recommendation and publication samples – must reach the Director, preferably by email (director@graduateinstitute.ch, ref. LAW) or by post (Graduate Institute of International and Development Studies, P.O. Box 136, 1211 Geneva 21, Switzerland), by  15 February 2015.

Information on employment conditions can be obtained using the same contact details.

The Institute reserves the right to fill the post by invitation at any time.

For more information, candidates are encouraged to consult the Institute’s website: http://graduateinstitute.ch/open_positions

On the Job! Attorney Advisor position at U.S. Foreign Claims Settlement Commission

The United States Foreign Claims Settlement Commission, an independent quasi-judicial agency in the U.S. government that determines the validity and monetary value of claims of U.S. nationals for losses caused by foreign governments, is searching for an attorney advisor. For more information on the position, visit  http://www.justice.gov/legal-careers/job/attorney-advisor-international.

Write On! Trade, Law and Development Call for Papers – Special Issue on Government Procurement (due Feb. 15)

The journal Trade, Law and Development, ranked as the best law journal in India (2012, 2011) and the tenth best law journal in the field of international trade worldwide (2012), has issued a Call for Submissions for its upcoming Special Issue on Government Procurement. Submissions are due by Feb. 15, 2015.

 The Plurilateral Agreement on Government Procurement (‘GPA’) aims to promote transparency, integrity and competition in the purchase of goods and services by government agencies. Preferential treatment for domestic goods and services are envisaged as trade barriers. Participating governments are also required to put in place domestic procedures by which aggrieved private bidders can challenge procurement decisions and obtain redress in the event of inconsistency with the GPA. However, States have political and economic interests in promoting their own small and medium scale industries. Therefore, the attempt to harmonize these objectives raises issues with reference to market access and the benefits of “good governance” under the GPA. These subjects have not received sufficient analysis from mainstream academia yet. Consequently, existing literature is inadequate to effectively equip policymakers to deal with such issues.

The revised GPA entered into force on April 6, 2014 and enabled parties to realise gains in market access to the tune of billions of dollars annually. This Special Issue, currently scheduled for publication in July, 2015, will provide an ideal platform to deliberate on Government Procurement initiatives at the WTO. Accordingly, the Board of Editors is pleased to invite original and unpublished submissions for the Special Issue on Government Procurement for publication as ‘Articles’, ‘Notes’, ‘Comments’ and ‘Book Reviews’.

Manuscripts may be submitted via e-mail, ExpressO, or the TL&D website. For further information and submission guidelines, please visit the Journal’s website: www.tradelawdevelopment.com. If you have any questions, please contact the editors at editors[at]tradelawdevelopment[dot]com.

Thawing of US-Cuba Relations: What to Expect Next?

On December 17, 2014, President Obama announced significant changes to U.S. foreign relations with Cuba. As noted in another ILG post by

Margaret Spicer, these changes reflect a new policy at the level of the U.S. Executive (the President). The sanctions imposed by U.S. Congress remain fully in place. In Washington DC’s politically-charged environment, US-Cubans and Republicans in Congress have been vocal about their opposition to any change in US-Cuban policy. Republicans assume control of both the House and the Senate in January, 2015.

So, what are the announced changes and what can we expect to happen next?

US-Cuba diplomatic relations re-established: High-level talks will begin in January, 2015 with the goal of re-establishing full diplomatic relations. President Obama announced plans to re-open a U.S. Embassy in Havana within a few months. Led by US-Cuban-American Senator Marco Rubio, opponents have threatened to block the required Senate confirmation of anyone nominated by President Obama as U.S. Ambassador to Cuba. US Congress also holds the purse strings and will need to fund the new Embassy. We will need to observe how much support these opponents will receive from other leading Republicans in the US Congress. Senator Bob Corker, incoming Chair of the Senate Foreign Relations Committee, has said only that he will be “examining the implications” of the policy change in the new Congress. Senator Orrin Hatch, presumptive new Chair of the Senate Finance Committee has issued a pro forma statement of opposition to the announcement. Representative Paul Ryan, incoming Chair of the House Ways & Means Committee (in charge of budgetary and trade issues in the House of Representatives) had, until 2007, voted to lift the embargo against Cuba. Senator Rand Paul (Rep.-KY) has been openly critical of Senator Rubio’s position. And Republican Senator Jeff Flake who flew to Havana to cement the prisoner exchange accompanying the deal, has been a vocal supporter of lifting the embargo. Flake and Paul both sit on the Senate Foreign Relations Committee. They, and others, will be heavily lobbied by US commercial interests lining up to take advantage of the announced policy and begin trade with Cuba.

In the event of a prolonged battle over funds and the nomination process, it is speculated that President Obama can take the interim step of scaling up the existing US Interests Section in Havana. Similarly, the Cuban Interests Section in Washington, D.C. will presumably be scaled up into an Embassy, headed by an Ambassador.

Increased travel and remittances to and small imports from Cuba: Travel to Cuba will still be restricted under the embargo. However, twelve categories of travelers currently authorized to travel to Cuba will no longer need to apply for permission (specific license) to do so: Continue reading

PluriCourts Fellowships for 3-12 months in 2015-2016

Temporary positions as visiting scholars at postdoctoral level are available at PluriCourts – Centre for the Study of the Legitimate Roles of the Judiciary in the Global Order, a Centre of Excellence at the Faculty of Law, University of Oslo for 2015 and 2016. The duration of the contracts is from 3 12 months. The candidates must hold a doctoral degree in law, political science or philosophy. The visiting scholars shall focus on international courts and tribunals in one of PluriCourtsthematic research areas, Human Rights, Trade, Criminal Law, Investment, and Environment. Applicants must submit the following documents: A short project proposal (maximum 3 pages) which shows how the project will contribute to PluriCourts’ research plan and a time schedule for the planned work. CV including relevant published and unpublished academic works; names and contact details for reference persons. A letter of application with earliest possible starting date and duration of the fellowship (3-12 months). It is a requirement that the applicant will be able to complete the project in the course of the period of appointment. The researchers will also be involved in other projects at PluriCourts and are expected to participate in the academic and social activities at the research Centre. Salary: pay grade 60 ( NOK 509.100 per year) Contact: Director, Prof. Andreas Føllesdal or Adm. Manager, Aina Nessøe Deadline for application: 18. December 2014

Applications should be sent to pluricourts@jus.uio.no

2014 Mid-Term Election Results & Impact on US Trade Agenda

Courtesy of Wikipedia

Courtesy of Wikipedia

One bright spot exists for President Obama in the Republican take-over of the U.S. Congress as a result of the 2014 mid-term elections. That is a shared agenda on trade. Republicans tend to be supportive of trade negotiations and tout their potential for economic growth and job creation. The Democrats, on the other hand, typically reflect the concerns of their constituents — trade unions and environmentalists concerned about potential negative impact of such agreements on jobs, labor standards and the environment.

The U.S. Constitution gives shared responsibility to the President and the Congress for the US trade agenda. While it is the President, through his US Trade Representative, who conducts trade negotiations, concluded agreements must be approved by a two-thirds majority of the Senate in order to become law.

The United States is currently negotiating two large trade agreements. The Trans Pacific Partnership (TPP) is being negotiated among twelve countries – Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam. The TransAtlantic Trade & Investment Partnership (TTIP) negotiations between the United States and the European Union will create the world’s largest trade bloc.

To facilitate such negotiations, U.S. Presidents over the past thirty (30) years have relied on the Trade Promotion Authority (TPA) legislation passed by the US Congress. TPA defines US trade negotiating objectives to which the President must adhere in concluding trade agreements. In return, the US Congress accepts, or rejects, the negotiated agreement in its entirety. This process provides some assurance to US trade partners that the agreements they sign with the United States will not be subjected to further requirements in order to win Congressional approval.

The last grant of Trade Promotion Authority to the President expired in 2007. President Obama first sought renewal of TPA in 2012. Under the Democratic-led Senate, the response to this request has been a resounding and consistent “no”.

Meanwhile, the Republican Party’s platform on trade includes the demand to “restore Presidential Trade Promotion Authority”. The document goes on to say that international trade is crucial for the US economy because it means more jobs, higher wages and better standard of living.

As a result of the November 4, 2014 elections the Republicans now hold a majority in the Senate, as well as the House. The incoming Senate Majority Leader, Senator Mitch McConnell (R-KY) has already signaled his desire to work with President Obama on trade:

“I’ve got a lot of members who believe that international trade agreements are a winner for America.”

This is why, on this front at least, President Obama may be able to find a silver lining in this changed political environment. The Republicans may keep trying to repeal Obamacare, but are more likely to approve his trade deals.