By Cameron Peek

Photo: Brexit Text License: Editorial Use OK

Following the conclusion of phase one (“the divorce”) of the Brexit negotiations last December, the United Kingdom and the European Union have officially entered phase two of the negotiations, discussing the framework for the UK-EU future relationship and deciding the arrangements necessary during the period transitioning to that relationship. Frustrated that the discussions have produced few concrete ideas of what this future relationship would look like, two weeks ago the EU’s chief negotiator, Michel Barnier, told UK leaders that the time had come to make a choice — will the UK be in or out of the EU customs union? Responding to growing concern within the Conservative Party that she might bend to opposition pressure, last week UK Prime Minister Theresa May made her position clear; the UK will “categorically [be] leaving the customs union.”

A Refresher on Customs Unions

A customs union is a type of trading block that unifies the tariff policy of all members. Customs unions are defined by two key features: 1) a free trade area between members (members do not charge duties on goods imported from other members) and 2) a common external tariff (any goods imported from non-member countries are charged the same import tariff, regardless of which member country the goods enter the union). Here, we should distinguish the EU customs union from the EU single market. The customs union unifies external tariffs, but the single market is what allows the free flow of goods, services, people, and capital. Thus, it is possible to be in the single market, but not the customs union (like Iceland, Liechtenstein, Norway and Switzerland), or be in the customs union, but not the single market (like Andorra, San Marino and Turkey).

May’s Position and the Way Forward

Leaving the customs union risks seriously disrupting the lion’s share of UK trade. The EU is the UK’s largest trading partner, comprising 43% of all UK exports and 54% of all UK imports. Exiting the customs union will put up new tariff barriers, depriving UK-EU traders of the duty-free access they currently enjoy. On the other hand, leaving the customs union would allow the UK to escape the confines of the common external tariff, thereby making it possible for the UK to implement its own tariff policy and negotiate its own trade agreements with non-EU members. As the EU itself has recognized that 90% of global growth is expected to come from outside the EU, this could be a worthwhile tradeoff for the UK.

Still, May is holding on to hopes of both having her trade cake and eating it too. In August of last year, May’s trade team released a “future partnership paper” outlining what is still the UK’s stance for negotiating the future UK-EU trade relationship. Most notable from the paper was the proposition of a “customs partnership.” Under this scheme, the UK proposed that it would synchronize its import policies for intermediary goods brought into the UK that are part of a supply chain for final consumption in the EU. Thus, for American widgets meant to be consumed in the UK, the UK could charge x%; but if those same American widgets were to be used in other products that would eventually be shipped to the EU, the UK would be charge the EU rate, y%.

Unfortunately for May, EU officials are underwhelmed at the idea, calling the UK’s proposal for a customs arrangement “unrealistic.” Even more doubtful is whether such an arrangement would comply the WTO’s non-discrimination principles. As the negotiations proceed, the UK will need to be warry not to compromise its obligations to the world trading system in the hopes of maintaining current access to the EU market.

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February 15, 2018

By Laurie Morgan*

Photo: Declaració de la República Catalana, Creative Common License

On October First, Catalans voted in favor of independence from Spain by a large majority in an unofficial referendum. Those in favor of a Catalan state have cited a right to self-determination as their legal basis to act.

Article 1 of the International Covenant on Civil and Political Rights (ICCPR), which Spain is party to, describes this right as held by “all peoples” to “freely determine their political status and freely pursue their economic, social, and cultural development.” United Nations General Assembly Resolution 1514 further elaborates on this description, and states: “[a]ny attempt aimed at the partial or total disruption of the national unity and the territorial integrity of a country is incompatible with the purposes and principles of the Charter of the United Nations.” This commentary discusses whether the right to self-determination can include a right to independence despite tension with this principle of state sovereignty, and whether either right is legally and practically applicable to Catalonia.

Generally, it is agreed that the Catalans can be considered a people, and therefore subject to the right of self-determination. While there is no codified definition for a people in international law, the Permanent Court of International Justice, and later the International Court of Justice (ICJ) have expressed that the following shared characteristics have importance in determining whether a group should be considered a people: race, religion, language, heritage; and a sense of unity by the identity of these factors. Although Catalans share a dominant race and religion with their Spanish counterparts, Catalans find unity in their own language and a heritage unique from Spanish heritage.

While the right to self-determination encompasses a right to free determination of political status, this does not automatically permit a people to unilaterally establish an independent state.

In its decision on the self-determination of Quebec, the Canadian Supreme Court interpreted a distinction between internal and external self-determination. According to the Canadian Supreme Court, internal self-determination is the norm under international law, while external self-determination, which would allow the potential to assert a right to unilateral secession, is only available for the most extreme of circumstances.

This distinction, of course, begs the question: what are extreme circumstances? The ICJ has shed light on this issue in its Kosovo opinion, which stated “the international law of self-determination developed in such a way as to create a right to independence for the peoples of non-self-governing territories and peoples subject to alien subjugation, domination and exploitation [emphasis added].”

On one hand, Catalonia, like all other Spanish states, has long held a self-governing status with Spain so it may not fall completely under the realm of complete non-self-governance. However, Spain’s invocation of Article 155 of the Spanish Constitution, which permits the national government to “take all measures necessary” in limiting the autonomy of the self-governing states to protect the “general interest of Spain,” has certainly enhanced the quality of the argument of the Catalans seeking independence, who emphasize the difference between their semi-autonomy and the complete autonomy they seek. 

Still, in practice, peoples subject to non-self-governance or alien subjugation have not always been able to utilize a right to self-determination to enforce an alleged right to unilateral independence. Realistically, Catalans seeking freedom from alleged alien subjugation, domination, and exploitation have existing, legal options aside of independence to solve these problems, some of which may be better suited to the interests of independence-oriented Catalans.

For example, victims of the police brutality which occurred on the day of the referendum have sought domestic judicial remedies. If victims of human rights violations by the state of Spain satisfy all domestic judicial remedies, they are entitled to seek justice from the European Court of Human Rights.

Additionally, remaining part of Spain may better suit the interests of Catalans. If economic development is the independence movement’s foremost goal, independence would be disastrous for Catalonia. Both the European Union and the European Free Trade Area require unanimous agreement of existing parties to initiate a new state. It is unlikely that Spain would look favorably upon the entrance of an independent Catalan state into these agreements, especially because it would do nothing to deter other Spanish states from looking to secede.

Other Catalans seek independence for social and cultural reasons notwithstanding the potential economic blow Catalonia would need to take. This faction recognizes that independence would not necessarily solve their perceived social and cultural problems, but believes that a chance at restructuring their governmental system would be worth the substantial economic risk.

Looking forward, relying on the right to self-determination could work for Catalans, but the existence of domestic and international avenues for the resolution of issues of subjugation and exploitation indicate that, in this case, it would be difficult for this right to effectively override the principle of state sovereignty. The recent success of the pro-independence parties in the Catalan parliamentary election indicate that this issue is far from resolved. 

*Laurie Morgan is a first year law student at Georgetown University Law Center.

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January 03, 2018

By Brian Kesten

Earlier last week, Israel’s legislature unanimously approved a limit on executive pay at banks, insurance companies and investment groups. The law creates a fixed ratio for executive salary at no more than 44 times the earnings of the lowest paid employee, which would work out to about $650,000 per year for executives.

In the U.S., no ratio is required by law, but the Dodd-Frank Act does require that banks publish the ratio. In Europe, the EU applied a cap on bonuses for “material risk takers” at banks, setting the limit at 100% of salary. In the Netherlands, bankers can only receive a 20% bonus, or no bonus at all if the bank has not repaid government bailout loans.

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April 08, 2016

By Victoria Hines

Several start-ups have recently emerged to compete with the online trade in fine wine. The market’s newest competitor, WineBourse, aims to be the “Charles Schwab” of the wine trade. Many U.S. companies, such as WineBid.com have selected a weekly auction model, resulting in a fine Rosé being auctioned off for almost $43k. Meanwhile, European competitors have rejected the auction approach in favor of a system that allows parties to select when to buy and sell. The cost of these services varies considerably between online sites; some companies, such as BBX, take legal ownership of the wine before selling it to the buyer.

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December 10, 2015

By Olga Symeonoglou

On October 6, the European Court of Justice invalidated the Safe Harbor pact, ruling that the privacy rights of European citizens are being violated by American companies. For fifteen years, the safe harbor agreement allowed U.S. companies to transfer data of European citizens overseas, but the ECJ found that this violated Europeans’ privacy rights because the U.S. government would have access to their personal information. The ruling comes as a shock to many companies that have relied on the data transfer agreement, but a new agreement is in the works.

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October 12, 2015

By Alex Yeager

While still a hot button political issue, the Iran Nuclear Deal looks poised to pave the way for the re-opening of trade between the nation and other large developed economies. Experts have indicated that Iran likely has the most to gain from the potential removal of sanctions by the United States and Europe. Trade between the U.S. and Iran is not expected to jump significantly, however there is speculative that deal may revive Europe’s historically large trade relationship with the Middle-Eastern nation.

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September 24, 2015

By Victoria Hines

In January 2013, the Champagne Bureau, a lobbying organization based in Washington, criticized the Obama administration’s decision to list “Korbel Natural Russian River Valley Champagne” on the menu of the inauguration dinner. To them, Champagne is characteristic of Champagne, France, and thus California wineries are mislabeling their wines by using the Champagne label. 117 countries are sympathetic to this sentiment, and protect the Champagne name, while the U.S. allows the label to be used by wine produced outside the Champagne region. Several agreements, including the WTO’s TRIPS Agreement, have included increased protections for geographical indicators of various products over the past two decades, yet the U.S. has consistently failed to follow suit in offering its own protections. However, the U.S. may now be more willing to protect such geographical indicators not only for wine, but also for other food products, such as feta cheese and Darjeeling tea.

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September 10, 2015

By Nathaniel DeLucia

Poland, Hungary, Slovakia and the Czech Republic recently decided to create a centralized patent office, the Visegrad Patent Institute (VPI), which would allow patent seekers to file a single application in order to gain protection in all four countries.  Western Europe has been enjoying success with a similar centralized patent office, the  European Patent Office (EPO), for years.

The VPI is representative of the larger trend toward greater centralization and harmonization of the world’s patent laws, and promises to provide many benefits to potential applicants and central Europe.  These benefits include increased number of international applications, reduced cost, and ease of filing in a centralized location.

For the complete story, check out IP-Watch’s article located here.

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April 06, 2015

By Catherine Kent

Talks are ongoing between Iran and the United States, France, Germany, Russia, China, and Britain. In exchange for relief from sanctions that have seriously damaged its economy, Iran will take steps to curtail its nuclear program. U.S. Secretary of State John Kerry and Iranian Minister of Foreign Affairs Mohammad Javad Zarif are set to meet again on March 15 in Switzerland to continue their attempt to reach an agreement over future of Iran’s nuclear development. Though Kerry’s last met with Zarif, on Monday, March 2, nothing has yet been agreed upon. Iran, on the other hand, denies seeking atomic weapons, maintaining that its nuclear energy program is strictly peaceful. “The imposed sanctions on Iran are cruel and illegal … lifting all the sanctions is the only way to reach a nuclear deal,” said Ali Shamkhani, secretary of Iran’s Supreme National Security Council. Bilateral and trilateral meetings with the P5+ countries will follow these one-on-ones, and the countries hope to reach a final deal by June 2015.

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March 27, 2015

By Min Wu

ZeptoLab, creator of mobile game Cut the Rope, filed a claim at the U.K. Intellectual Property Office to cancel the European registration of the trademark “candy” by King.com, developer of popular game Candy Crush Saga, according to CNet Australia. 

In the game Cut the Rope, players cut a rope to feed a small monster candy. The trademark registration, if held valid, would establish King.com’s exclusive right to use the word “candy” in the titles of video games. 

King.com has withdrawn its “candy” trademark application in the United States under intense criticism. However, it still holds a registered trademark of “candy” in the European Union, which was used as a precedent to file the U.S. application.

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April 10, 2014

By Min Wu

The European Parliament approved amendments to a telecommunications legislation package that would solidify net neutrality, according to Wired. The legislation still needs the approval of the Council of the European Union to become the law. 

Net neutrality is the notion that all traffic on the Internet should be treated equally by network service providers, without discrimination. The amendments prevent companies from arbitrarily defining services as “specialized services” to evade the net neutrality requirement. In the United States, net neutrality rules adopted by the Federal Communications Commission were struck down earlier this year.

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April 07, 2014

By Sam Obenhaus

NATO-Ukraine Commission session in Brussels |
U.S. Department of State on Flickr 

Money flows quickly.  It has no morals and tends to have a very short memory.  In the case of great powers, it’s tentacles also bind economies together in ways that are hard to define and even harder to untangle.

This last trait has, of course, been a tremendous benefit of expanding trade and interdependence since the latter half of the 20^th century.  Global trade, some like to say, is now “too big to fail.”  The interconnectedness it created pacified Europe, the most violent continent for the majority of recent history, and this is not about to change.  World War III, or even another Cold War, is not around the corner.

But has the deterrence of large-scale conflict come at the expense of reducing the expected costs associated with moderate acts of aggression?  This is the hypothesis Russian President Vladimir Put is testing in Crimea and maybe soon in Eastern Ukraine.

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April 04, 2014

By Abraham Shanedling

 

Hungarian Prime Minister Viktor Orban has said that Hungary is against the European Union imposing sanctions on Russia over its invasion of Crimea.

 

In an interview with Vilaggazdasag newspaper, Orban said that economic sanctions are “not in the interests of either Europe, or much less Hungary.”

 

The comments are not surprising given that Russia is Hungary’s largest trading partner, with Hungary relying on Russia for the vast majority of its natural gas. Hungary also recently signed a 10 billion Europe deal with Russia to expand Hungary’s nuclear plant.

 

Reuters has more on the story.

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April 02, 2014

By Abraham Shanedling

 

The World Bank has indicated that Russia’s economy could drop by 1.8 percent if the standoff in Ukraine continues and the resulting U.S. and European sanctions stay in place or intensify.

 

Although Russian leaders in the Kremlin have downplayed the impact of the sanctions, economists say that investors have pulled about $70 billion from Russia’s economy since the crisis began. Prices for food and imported items have already risen, and some Russians are reportedly having problems tapping into funds at banks designated by U.S. and European sanctions.

 

Russia’s already weak economy plus the threat of more sanctions even prompted Standard an Poor’s rating agency to change its rating of the situation from “stable” to “negative.”

Voice of America has more on the story.

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April 01, 2014

 By Stephen Kozey

The ongoing negotiation of the Transatlantic Trade and Investment Partnership (TTIP) by the United States and European Union is among the most important happenings in international trade and investment today. Recently, the parties came together in Brussels for the first substantial round of negotiations. Now, several members of the U.S. delegation are coming to George Washington University on Monday, March 24 for a panel discussion on these important developments.

If you’re on the fence about attending, perhaps the free admission and refreshments will sway you.

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March 22, 2014

By Aliza Kempner

Work on the Nord Stream pipeline.
By Bair175 (Own work) [CC-BY-SA-3.0],
via Wikimedia Commons

The political scene remains fiery in the Crimean peninsula, it’s looking like Ukrainians may soon lose the ability to keep heat in their homes. Gazprom, Russia’s state-owed monopoly of natural gas, is threatening to pull the cord on its subsidized trading of natural gas to Ukraine. This isn’t just Ukraine’s problem either - most of Europe gets its gas from Russia, and the United States may soon add our own fuel to the fire.

In December of last year, former Ukrainian leader Viktor Yanukovych brokered a deal with Russian President Vladimir Putin to allow Ukraine to purchase natural gas at a price of $268.50 per thousand cubic meters of gas rather than $400. Ukraine depends on Russia for between 60-70 percent of the gas is uses to heat homes and keep businesses running. Since then, however, Yanukovych has been overthrown in a frenzied uprising, and as the Kremlin recently reminded it, Ukraine still owes Gazprom a whopping $1.55 billion. This is a little more than most countries would be okay with spotting neighbors to cover the gas bill, especially when that neighbor was rumored to have stolen gas transported through its territory en route to Europe and already had a reputation for making late payments. Still, the loss of this deal, which had provided Ukraine with a total saving of $2 billion per year, could be catastrophic for Ukraine, especially as an unsteady new government tries to take charge and Russian troops intensify their attempts to control the region.

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March 20, 2014

By Phillip Yu

The European Union has promised Ukraine $693 million a year of trade relief to compensate for bankruptcy and the deployment of Russian troops in Crimea. This trade relief is part of a larger E.U. aid package which could total over 11 billion euros over the next seven years. The Crimea crisis itself has prompted the EU to suspend visa and trade talks with Russia and threaten sanctions against Russian officials. For the relief to take effect by June, the E.U. Parliament must act quickly and approve no later than the week of April 14.

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March 13, 2014

By Sam Obenhaus

European finance ministers are meeting this week in an attempt to resolve long-running differences over the establishment of the European Union’s bank bailout mechanism.  The heart of the debate revolves around the design of the Single Resolution Mechanism (SRM) for handling failing European banks and ensuring that they are efficiently wound-down with minimal taxpayer assistance.

The finance ministers will be working towards their second agreement on the subject.  The E.U. Parliament criticized the finance ministers’ previous SRM agreement as being too unwieldy to implement.  Both the national governments and the E.U. Parliament must approve the SRM’s design before it can come into effect.

The familiar north-south dynamic present in most E.U. financial debates is an additional point of intrigue.  Greece currently holds the E.U. presidency while Germany remains extremely skeptical of any plan to pool bailout resources.

For more on this story visit Bloomberg BNA.

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February 18, 2014

By Min Wu

The European Parliament passed a new directive regulating the practice of authors handing their right to collect copyright licensing fees over to collective management organizations, according to IP-Watch. 

Under the new directive, the authors will be given the right to choose from different collective management organizations. The directive also sets clear deadlines for payment of the fees to the authors. Importantly, collective management organizations have to open up for alternative licenses such as Creative Commons. A European Union directive is a legislative act of the European Union, requiring the implementation by individual countries to achieve certain results.

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February 14, 2014

By Min Wu

The European Patent Office (EPO) published a decision rejecting an attempt to patent human foreskin cells suitable for culturing stem cells, according to IP-Watch. The EPO said in its decision that inventions using human embryonic stem cell lines derived from the destruction of the human embryos are not patentable under the European Patent Convention.

In 2011, the European Court of Justice (ECJ) ruled that no patents may be issued on stem cell research if human embryos have been destroyed in the process. Although the ruling is not binding on the EPO, the EPO observed that its decision is consistent with the ECJ ruling.

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February 12, 2014