June 19, 2016

I-CON-S Berlin

The International Society of Public Law held its third annual conference in Berlin. The MegaReg project organized two panels, one on TPP and liberal economic ordering and one on TTIP and third parties.


Liberal Economic Ordering Through Megaregional Agreements: The Trans-Pacific Partnership (TPP)

Participants: Richard B. Stewart (chair), Paul Mertenskötter, Klaas Hendrik Eller, Helen Churchman, Thomas Streinz

Richard B. Stewart: Liberal Economic Ordering through Megaregional Agreements: The TransPacific Partnership (TPP)

TPP aims to promote liberal economic ordering while addressing nontariff regulatory trade impediments and responding to the growing importance of trade in services, global value chains (GVCs), and the digital economy. It expands the space in which corporations can conduct business through market exchange and compete on a level-playing field while constraining the role of states as market actors. It also includes wide-ranging obligations to reform, reorient and constrain the Parties’ internal regulatory processes. A naked economic agreement, TPP largely disregards ensuing distributional effects and the wider set of standard liberal concerns such as economic security for citizens, human rights or democracy. TPP will likely have important impacts (both positive and negative) on third-parties, including on non-member states, existing international and regional institutions, and weakly organized groups. The governance arrangements for TPP have significance commensurate with its ambition.

Paul Mertenskötter: Strategic Uses of Administrative Law in the Trans-Pacific Partnership

TPP’s administrative law obligations for Parties’ domestic regulatory processes vary significantly in intensity, scope, legal accountability and enforcement potential across different issue areas. They tend to be stronger where focused multi-national economic interests dominate (i.e. pharmaceutical regulations, government procurement) and weaker where more diffuse social interests are concerned (i.e. environment, labor). This variation is partly explained by considering treaty-based obligations for domestic administrative procedures as instruments of political control. The procedures empower certain interests in the regulatory process more than others. Negotiating treaties with decision-making procedures for regulators in other countries can be a tool for political actors to satisfy interest group demands where other instruments of political influence over foreign regulators such as monitoring, oversight and appointment are much more limited.

Klaas Hendrik Eller: The Transpacific Partnership Agreement Through the Lens of Global Value Chains

The TPP shifts the conventional paradigm of inter-state trade to a growing focus on Global Value Chains (GVC) as organizational form of contemporary production. The regional differentiation of trade and investment regimes is both a reaction to the existing fragmentation of production networks and a vital factor in expanding this trend. While GVCs remain highly sensitive to their regulatory environment, they are also a proper source of governance patterns which reflect the systemic nature of chain-wide coordination. This paper discusses how the novel administrative law architecture created by the TPP interacts with the private and hybrid infrastructure of contracts, standards and certification. Providing for mutual recognition of national standards, the TPP further blurs regulatory boundaries to create a space that is eminently preconfigured by chain governance instruments. Their justification becomes increasingly pressing, from the perspective of chain actors and third parties alike.

Helen Churchman: The Limitations of Regulatory Convergence within Free-Trade Agreements

This paper explores whether megaregional free trade agreements (FTAs) are a legitimate vehicle to achieve regulatory convergence or whether targeted multilateral negotiations would result in a more balanced outcome. I argue that this mechanism prevents substantive participation in the negotiation of new standards and regulations that will have a significant impact on countries and people across the globe, not just on TPP parties; that power dynamics and imbalances are more pronounced within smaller plurilateral negotiations, which can have a dramatic effect on the outcomes; and that trade offs that are made in other areas of the FTA negotiations may also affect the quality of the standards and regulations that form part of the final agreement. I also outline some of the practical limitations of regulatory convergence within FTAs, arguing that from a technical perspective, effective regulatory convergence can be hard to achieve within this framework.

Thomas Streinz: The Trans-Pacific Partnership’s Innovative Framework for the Digital Economy

The Trans-Pacific Partnership (TPP) reacts to the digital revolution and its implications for the global economy in the 21st century. Across the chapters on telecommunications, electronic commerce, and intellectual property, the TPP features innovative provisions on important and controversial issues such as Internet access, free data flows, data privacy, server location requirements, source code protection, domain-name dispute settlement, and the liability of intermediaries. Taken together, these provisions provide the basic framework for the TPP-area’s digital economy and beyond. Spill-over effects seem likely due to the economies of scale generated by interoperability in the digital ream. The United States are likely to push for similar rules in the Transatlantic Trade and Investment Partnership (TTIP) with the EU to combat what it perceives as the current state of digital protectionism.

The Transatlantic Trade and Investment Partnership (TTIP) and Third Parties

Participants: Alberto Alemanno, Joana Mendes, Thomas Streinz

Chair: Gráinne de Búrca

Alberto Alemanno: Third Parties in Regulatory Cooperation

The Transatlantic Trade and Investment Partnership (TTIP) seeks to create new mechanisms for regulatory cooperation between the parties and involvement for a wider set of stakeholders. This paper explains how the TTIP’s regulatory processes and institutions can account for external stakeholders. It surveys the access and potentials influence of different stakeholders, such as corporations, civil society groups, citizens and non-party interest and contrasts this with the role of the established political actors, such as the central executive branch, regulators and parliamentarians in the regulatory coordination effort.

Joana Mendes: Participation, Inclusiveness, and Third Parties

Participation is one important feature of the proposals of the European Commission on regulatory cooperation in TTIP. The opportunities of participation foreseen in the Commission’s proposals vary, highlighting the different functions and normative meanings of participation. Nevertheless, functional-instrumental reasons arguably explain, by and large, the centrality of participation in the regime proposed by the Commission. The paper will argue that potential distributional effects of decisions adopted via regulatory cooperation may affect the legal spheres of persons concerned throughout the trade chain. Participation should be a means to give voice, in equal terms, to the competing legally protected interests affected. But what could be the legal yardsticks of inclusiveness in the context of regulatory cooperation? What would be the legal position of holders of legally protected interests in third countries?

Thomas Streinz: Third Parties in European Courts: Lessons from the Polisario Case

The EU’s General Court last December annulled a decision by the Council to conclude an agreement between the EU and Morocco on reciprocal liberalization of agricultural and fishery products in so far as the agreement was applicable to Western Sahara, a disputed territory that is claimed by Morocco without international recognition. The Court reasoned that the Council failed to ensure that the agreement would not apply to the detriment of the population in Western Sahara and did not entail or encourage infringements of their fundamental rights. This broad approach (if upheld by the Court of Justice) requires the EU to take third parties seriously and shows that the extraterritorial reach of EU fundamental rights is no one way street. Legal challenges of the Transatlantic Trade and Investment Partnership (TTIP) by third parties may not be without merit if their interests are ignored in its institutional design and operation.