LAWS 665 - Syllabus (Spring 2023)

Participating Universities
University of South Carolina Law School (USC)

Teaching Faculty
Prof. David Linnan, USC

Coverage
This international trade and economic law course is chiefly an introduction to three distinct but related areas in international economic law, particularly as colored by recent events. The first involves the basics of the GATT/WTO (General Agreement on Tariffs and Trade/World Trade Organization) law as the core of the multilateral trading system. The second involves the concept of free trade agreements (FTAs) as a form of bilateral trade agreements that the WTO treaty permits as a matter of regional economic integration. (NAFTA or the North American Free Trade Agreement is the North American example of an FTA--  now USMCA, while the ASEAN Economic Community or AEC is the Southeast Asian example of an FTA.)  Meanwhile, the FTA concept itself has now been expanded on in the most recent FTA-like iteration pursued by the Biden Administration in the Indo-Pacific Economic Framework for Prosperity or IPEF, importantly with more of a supply chain and liberal economy minus market-access guarantee focus in traditional terms.   The third is that the US recently embarked upon technology export limitations and climate change subsidy law introductions (seemingly for geo-political reasons), which present differing issues under the multilateral trade or FTA models.  Welcome to the future.

Beyond basic principles, the longstanding multilateral approach of GATT/WTO law was tied to the on-going Doha Round which was focused on a 2006 negotiating deadline, but collapsed under its own weight after a dozen years.  Even before the Trump Administration’s trade policy actions aimed at the multilateral trade system (WTO), emphasis had shifted to FTA approaches in a practical sense, and now the question is where the IPEF approach might take us.  Coincidentally, the modern cross-border digital economy has been addressed in recent FTAs, so things like e-commerce and the internet in the cross-border setting are increasingly governed by the most recent FTAs.  And modern FTA investment protections originally birthed global supply chains, meanwhile investment and technology export regulation in the name of national security has taken root again even in the US.  The 2023 version of trade law looks very different from the 2012 version of trade law, not to mention that of the 1990s.  US trade law views seem increasingly less about the economists’ traditional view of economic efficiency and comparative advantage benefiting consumers, and focus much more now on climate change, resiliency and remaking global supply chains for geo-strategic and economic reasons (aka “making trade law work for ordinary people”).  Meanwhile, differing states have very different views of the most desirable path forward, and we are building the airplane as we fly it.

What emerged in parallel to the so-called US-China “trade war”?  The Trump Administration had fundamental disagreements with the structure and law of the multilateral trading system as constituted, but it was difficult to discern a coherent strategy (e.g., simple opposition versus reform).  There was a thread mostly pursued by third party states while the Trump Administration favored levying unilateral tariffs, whether and how to reform the WTO (inferring that at least some underlying US criticisms are justified also in others’ eyes).  So there was more involved than just newspaper stories about tit-for-tat tariff retaliation between the US and China.  The Biden Administration finally adopted the IPEF approach, but so far it seems to leave the Trump Administration’s measures in place against China, and has generally bought into the idea of more regulation of access to high technology products so that we seem to be moving from a “trade war” to a “technology war.”  Trade arrangements were always about more than simple economics, so no surprises there. It seems likely that the Biden Administration’s attention remains more fixed on domestic than international economic affairs through the medium term (think emerging from the Covid Pandemic combined with inflation-fighting).  Most recently, the US lost a couple WTO tariff proceedings commenced under the Trump Administration.  The current US Trade Representative (USTR) then announced loudly that the US refused to accept its WTO losses, so now the trade law positions of the Biden and Trump Administrations look closer than ever.   The talking heads are less than thrilled, see Reinsch, "Commentary:  The End of Neo-Liberalism" (CSIS 01/03/23).

It has become hard to treat multilateral trade law as generally accepted positive law as though it were the UCC.  Now, international environmental law begins to intrude seriously into trade law as the EU to implement its “green economy initiative” is pressing for the 2026 introduction of carbon border adjustment measures (CBAMs, which are essentially carbon-based tariffs aimed at implementing improved climate change standards without disadvantaging European industries--  although post-Ukraine, greatly increased EU energy costs may lead some energy-intensive industries to move to jurisdictions with lower energy costs, much as labor arbitrage drove earlier off-shoring to developing countries). FTAs present a slightly different set of questions. There are differences in substantive coverage between the multilateral trading system dating back to the 1994 WTO treaty ending the Uruguay Round (pre-internet, practically speaking), and FTAs under negotiation to this day. The more recent FTAs fully incorporate the digital economy and some version of services liberalization, meanwhile re-shoring or friend-shoring seems the new model for more resilient global supply chains.  As examples, see the Transpacific Partnership Agreement or TPP negotiated under the Obama Administration, later adopted by the other states as the TPP-11 without the US after the Trump Administration withdrew, and USMCA Agreement (NAFTA 2.0, negotiated under the Trump Administration which essentially lifted its digital economy provisions straight out of the TPP agreement).

The other TPP members have proceeded without the US to form the TPP-11 as an FTA, and the message seems to be that they are not waiting on the US in making most decisions about trade.  Before this happened, AmCham Singapore endorsed the so-called TPP-11 now CPTPP version (“Comprehensive and Progressive Trans-Pacific Partnership,” meaning TPP without the US).  As a practical matter, chamber of commerce types as clients place more value on free trade and open markets than either of the Trump or Biden Administrations perhaps focused more or less on employee-voters as a political matter, so understand your client’s viewpoint. They probably can simply locally incorporate a foreign subsidiary in an FTA member state and obtain all FTA advantages. The death of “globalism” is greatly exaggerated, however, and there will be trade law in some form when the dust finally settles, whether via a reformed multilateral WTO, traditional bilateral FTAs, the new regional “super-FTAs” like the RCEP, CPTTP or TTIP (the US-European analogue to TTP), or some combination thereof.  Meanwhile cross-border commerce may be much more virtual and digital, expand more into services, etc.

In law practice terms, multilateral or WTO-level trade law is largely practiced by current and former government lawyers concentrated in national capitals, while FTA-type law is now part of the standard tool kit of all sophisticated business lawyers.  Simply put, clients expect some level of legal sophistication in the US and abroad for structuring global business enterprises.

Meeting Times & Places
The course is scheduled to meet regularly 2:40-4:45 pm Columbia time Wednesdays in South Carolina.  I should normally be in my 320 office at the Law School all day Tuesday-Thursday, but will maintain formal office hours Tuesday-Thursday 10:45-13:00.  Otherwise, you are free to drop by whenever you can catch me in my office.  Check with me at the end of class, or email me anytime to set a physical or zoom meeting time that fits your individual schedule Monday-Friday.

Text, Contacts & Approach
We shall save you the cost of a commercial law casebook in this course.  We shall use http://www.proflinnan.com as our instructional website.  You can find the text of the relevant GATT/WTO or similar provisions normally on the World Trade Organization (WTO) website (http://www.wto.org), and the course website is free.

Units
The order of coverage from our web-based materials follows:

Unit 1  -  Introduction on Background
Unit 2  -  International Economics, Development Policy Philosophy & Disruptions:
Multilateral & FTA Trading Whys & Wherefores (Meanwhile, What Is IPEF?)
Unit 3  - GATT/WTO/GATS;  First Look at the Agreements, Plus Dispute Resolution (Rule-Based vs Economic Diplomacy Systems, WTO vs FTAs)
Unit 4  -  Scope of National Security (GATT/WTO Article 21) and Currency
Manipulation, But Now What Do Tech Export Limitations Mean?
Unit 5  -  Multilateral Trade Core Principles & Exceptions (GATT/WTO Article 1:  MFN, Cultural Exceptions) & Goods vs Services
Unit 6  -  Multilateral Trade Trade Core Principles & Exceptions (GATT/WTO Article 3: National Treatment & Non-Discrimination
Unit 7  -  Digital Commerce & Internet Across Borders (WTO vs FTAs, in practice)
Unit 8  -  Multilateral Trade Core Principles & Exceptions (GATT/WTO Articles 10 & 11: Non-Tariff Barriers (NTBs) & Technical Barriers to Trade (TBT) Agreement
Unit 9  -  Multilateral Trade Core Principles & Exceptions (GATT/WTO Article 20:
Scientific Standards & Sanitary and Phytosanitary (SPS) Agreement
Unit 10 - Trade & Environment Overlap (GATT/WTO Article 20 cont’d, in practice, but CBAMs too)
Unit 11- Trade Law & Trade Related Intellectual Property (TRIPs) Agreement:
Technological Change Further Out
Unit 12 - Global Supply Chains & FTAs and Investment Law Overlap, Now "Resilience"?
Unit 13 - Services Liberalization More in FTAs than GATS, but Why?
Unit 14 - Trade Remedies Approach:  Antidumping & Countervailing Duties
(Subsidies) Agreements, Plus Safeguard Agreement
Unit 15 - Trade Liberalization for Textiles & Agriculture, Food Safety & Climate
Change

This course is mostly a specialized international economic law course, but is offered without prerequisites knowing that some students will have prior knowledge and training in public international law, while others may not.   We shall try to address this via online resources and office hours, but if all else fails, the public international law nutshell and similar black letter law summaries are helpful.

Assessment
Grading in the US will be based primarily on either (i) a research paper (20 pages for two credit hours and 30 pages for three credit hours), or (ii) a 24 hour check-out final exam for two hours. USC students may choose either assessment option except that if you take the course for three credit hours you must write a paper (for USC Business School students, this also may be a case study). With the instructor's permission such research paper may also be structured to satisfy the USC Law School's graduation writing requirement.  Students wishing to write such a research paper should talk early and often with the instructor, since you will be required to choose a topic in consultation with the instructor, produce an outline, followed by a first draft and then a final version of the paper.  Note that you must confer with the instructor at least three times in the process: to choose a topic cooperatively, review your writing outline together, and then for comments between your first draft and the final paper version.  We can also organize a help session with the reference librarians to introduce you to trade law and international economics sources, as a way to help you get started .

There will be also in-class presentations of problems and projects from groups of students (via talking and shared screen or similar materials e-mailed in advance, etc.), so that your grade will also reflect those on the margin (basically, up or down a half letter grade in +/- terms).  Your presentations will all be done in groups, and the group work will include an element of self-assessment within the groups.  We shall try to divide up the formal exercises early in the semester to allow students so desiring either to write their longer graduation writing requirement research papers as a deeper exploration of certain aspects of their presentation problem, or a shorter (non-graduation writing requirement) research paper on aspects of their chosen problem.