Legitimacy Concerns of the Proposed Multilateral Investment Court: Is Democracy Possible?
By José Manuel Alvarez Zárate
Growing concerns in Europe about international investment regimes and investor-state dispute settlement systems pushed the European Union into pursuing the creation of an investment court system and a multilateral investment court. The European Union (EU) started this reform through the Comprehensive Economic Trade Agreement, the Vietnam-EU Free Trade Agreement, and by direct persuasion of other countries to start negotiations at the United Nations Commission on International Trade Law. Visible reasons for the change include concerns over the perception of a lack of transparency, coherence, and arbitrators’ partiality, all of which diminish the legitimacy of the multilateral investment court. Other reasons might be laid on the budgetary risks of more than 213 claims against EU countries. To address these legitimacy concerns, the EU wants to replace traditional party-appointed arbitrators with a two-tiered investment tribunal system comprised by a roster of members selected by the state parties on the treaty. This Essay argues that the creation of the multilateral investment court needs to follow democratic principles in order to be legitimate. History has shown us that the EU has abused its power in the past when implementing resolution systems. Foregoing negotiation, comment by member nations, and implementing a tribunal at its own behest has shown this. The EU multilateral investment court proposal has legitimacy deficiencies because the EU has relied on its power to impose its views so far, i.e. its proposal was not previously negotiated multilaterally amongst other member nations. It is thus possible that the appointment of the future judges to this court will likely be subject to the political constraints and veto that the International Court of Justice or World Trade Organization appointments suffer today. This could leave small economies at a disadvantage because they might be subject to permanent, politically biased judges. A superior solution would be to adopt better arbitrator disqualification rules, clear interpretation directives to avoid law creation, and stricter arbitrator qualifications.
Tax Haven Listing in Multiple Hues: Blind, Winking or Conniving?
By Jahanzeb Akhtar and Verónica Grondona
Tax havens are among the biggest challenges faced by developing countries in achieving their national development goals. States, international organisations, multilateral agencies and non-governmental organisations have all made several efforts at compiling ‘lists’ of tax havens at the multilateral and national levels, with varying levels of seriousness and outcomes. This research paper examines these efforts by analysing the objectivity of criteria used and the clarity of the final outcome in a comparative manner. The paper is organized into four sections dealing with the tax haven blacklisting by the Organisation for Economic Co-operation and Development (OECD), the countries of the South, the European Union (EU) and an analysis across lists. The concluding section offers some suggestions.
US’ Section 301 Actions: Why They are Illegitimate and Misguided
By Aileen Kwa and Peter Lunenborg
This research paper examines the US’ Section 301 unilateral actions against China, stemming from the US’ concerns over China’s ambitious industrial policies and its rapid technological advancements. It outlines the accusations of the US regarding China’s conditions for technology transfer and what the US sees as overly intrusive Chinese government involvement in investments. It looks in detail at why the US’ actions are in fact illegitimate and misguided. (more…)
The EPA issue has once again re-emerged when Tanzania informed EAC Members and the EU that it would not be able to sign the Economic Partnership Agreement (EPA) between EU and the six EAC Member States in early July. The European Commission reportedly proposed signature of the EAC EPA in Nairobi, on the sidelines of the 14th session of the UN Conference on Trade and Development (UNCTAD XIV). (more…)
North’s policies are exposing South’s economies to shocks
By Kinda Mohammadieh
Since the onset of the global economic crisis, the South Centre in its analysis had indicated that the policy responses to the crisis by the US and EU are exposing developing countries to serious shocks in the future. Dr. Yilmaz Akyuz (Chief Economist of the South Centre) notes that these arguments are no longer predictions but hard reality. He was speaking at the South Centre Conference in Geneva. (more…)
The economically successful developing countries are characterised as having a strong “developmental state”. But this role of the state is coming under attack in new global rules being created. Two new trade agreements involving the two economic giants, the United States and European Union, are leading a charge against the role of the state in the economy in developing countries. Attention should be paid to this initiative as it has serious repercussions on the future development plans and prospects of the developing countries. (more…)
