Justice and trade

  • October 10, 2013
Justice and trade

A new article by Todd Tucker highlights the tensions between interntional trade agreements and economic development.

Recent rulings under international investment agreements should be examined for their impact on economic development, according to a new article by a Gates Cambridge Scholar.

The UN Agency UNCTAD [UN Conference on Trade and Development] published an article this week by Gates Cambridge Scholar Todd Tucker on the relationship between domestic court rulings and international tribunals in respect of a series of recent disputes under international investment agreements.

In his article he cites two recent cases: one is between Moldova and a French duty free shop owner; the other between Ecuador and Chevron with regard to a case where Texaco, a subsidiary of Chevron, was being sued by Ecuadorian residents who claimed it had been negligent in its local operations for decades. In both cases the international arbitrators ruled that the countries had violated IIAs.

Todd, who is doing a PhD in Development Studies [2012], argues that these cases show how international law may be prioritising wealthy investors over best practices in development. He suggests that even developed countries may “join the chorus of stakeholders that are voicing concerns about recent IIA case law” if such rulings start to affect them.

In an accompanying commentary Judge Gregory E. Mize points out the importance of Todd Tucker’s article. He says it “exemplifies how the negotiation of international trade or investment agreements can produce severe challenges to American principles of self-government and federalism”.

The judge warns about the long-term impact of the undermining of domestic court rulings, grounded in constitutional issues, by international agreements. He says: “I believe it would be prudent for the negotiators of international investment treaties, no matter which country they represent, to be mindful of the roots of their domestic court systems when contemplating the creation of judicial forums un-tethered to established courts.  I hope professional negotiators appreciate that, if the consumers of traditional domestic court services around the globe come to see private parties and their national government executives have garnered an invincible, penthouse-level justice system for themselves, then there can well be a plummeting of public trust and confidence in judicial systems generally.  That is a risk not worth taking.”

Mize adds that if domestic courts in some countries are not up to the task of delivering fair and impartial rulings, work should be done to improve their systems instead rather than isolating them.

From 2004 until he came to Cambridge, Todd was research director at Public Citizen, where he focused on trade and investment issues.

*You can follow Todd on @toddntucker. UNCTAD is on @UNCTADwif.

Picture credit: renjith krishnan and www.freedigitalphotos.net.

 

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