International Law
Should U.S. policy give it more weight?
By Kenneth Jost

The Bush administration has been widely condemned for skirting international law in its harsh handling of enemy combatants after the war in Afghanistan and bypassing the United Nations in the invasion of Iraq. Critics at home and abroad say the policies weakened international support for U.S. actions and could endanger any U.S. service members captured in future conflicts. Liberal advocacy groups are. . . .

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Should there be a right of pre-emptive self-defense?

John Yoo Professor of Law, University of California at Berkeley School of Law. Written for The CQ Researcher, December 2004	Mary Ellen O'Connell William B. Saxbe Designated Professor of Law and Fellow, Mershon Center for International Security, The Ohio State University. Written for The CQ Researcher, December 2004

Do Trade Treaties Challenge U.S. Authority?

The tiny Caribbean nation of Antigua and Barbuda recently taught the United States a potentially costly lesson in the power of international law. It won a ruling from the World Trade Organization (WTO) in November 2004 that two U.S. laws prohibiting Internet gambling — along with four similar state laws — violate a global agreement liberalizing trade in services. Antiqua and Barbuda had complained before the WTO that its offshore gambling industry declined more than 50 percent after the United States cracked down on Internet gambling.

The Bush administration is appealing the ruling, arguing that states and the federal government can regulate gambling under their longstanding authority to protect public morals and public order. But legal scholars say the Antigua decision could encourage other countries to challenge any law restricting gambling, including gambling monopolies run by state lotteries and Indian tribes and limits on the number of slot machines or casinos allowed in a state.

“If Antiqua can challenge federal and state laws related to Internet gambling, then other countries can challenge state laws related to bricks-and-mortar gambling,” says Georgetown University law Professor Robert K. Stumberg. Moreover, he adds, “lots and lots of state laws” could conceivably be seen as restraints of trade and are now vulnerable to challenges from overseas corporations.

Antigua's WTO triumph underscores growing concern that international trade laws grant dispute-settlement tribunals broad, new powers that enable them to challenge the legality of a variety of federal, state and local laws both here and abroad, and, in at least two cases, have even challenged U.S. court decisions.

“There are grave implications here,” California Supreme Court Chief Justice Ronald M. George said. “It's rather shocking that the highest courts of the state and federal governments could have their judgments circumvented by these tribunals.”

The controversial tribunals have been established by the WTO, created in 1995 to regulate global trade, and the North American Free Trade Agreement (NAFTA), adopted in 1994 to open up trade between Canada, Mexico and the United States. But because the trade arbitration panels give top priority to the free flow of goods and services above all other considerations, critics say they can force local, state and federal governments to either eliminate or weaken domestic laws that protect health, safety, the environment and worker rights.

WTO rulings that have raised concerns include cases in which countries have challenged U.S. laws designed to protect dolphins and sea turtles; Clean Air Act rules requiring clean-burning gasoline; and regulations to prevent the importation of invasive species into the United States. For its part, the United States has challenged or threatened to challenge, among other things, Japan's automobile efficiency and emission policies designed to meet an international anti-global warming treaty and a European Union ban on the sale of furs from animals caught with steel jaw leg traps.

Global trade advocates point out that a WTO tribunal cannot actually overturn or nullify a domestic law. The government whose law is declared a barrier to trade can either change the offending law or keep it on the books. But by retaining the law, the government must pay damages, which can range in the hundreds of millions of dollars. Most governments choose to change their laws rather than pay the damages. Often, say critics of the current global trade regime, the mere threat of a WTO challenge discourages lawmakers from even proposing certain environmental, safety or workers'-rights laws.

Moreover, under a little-known provision of NAFTA, called Chapter 11, broad, new powers are granted to corporations that some legal scholars and critics say redefine property rights in a way that goes far beyond the rights recognized by U.S. courts or enjoyed by U.S. companies. In fact, the U.S. Congress has repeatedly rejected the broader definition of property rights allowed under the new NAFTA provision.

Under Chapter 11, any foreign corporation that might potentially lose money due to a government action, such as a local zoning law or a state court decision, may sue the national government for damages. The provision ostensibly was included to protect international investors from having their property expropriated by foreign governments, as Mexico did in 1938 when it nationalized its oil industry.

However, under the NAFTA provision corporations are claiming damages even though no actual property has been seized, but when the company perceives that a government action could potentially cut into a portion of its future profits. Already, more than 20 Chapter 11 cases have been filed, demanding almost $14 billion from U.S., Canadian and Mexican taxpayers as compensation for corporate “losses” that allegedly occurred due to local land-use decisions, environmental and public health policies, and even adverse court rulings. (American companies are not allowed to file such cases in U.S. courts.)

For instance, in 1999 the Canadian methanol manufacturer Methanex Corp. sued the United States, demanding $970 million in damages from U.S. taxpayers to compensate the company's anticipated loss of profits due to California's ban on the use of the gasoline additive methyl tertiary butyl ether (MTBE), a potentially carcinogenic chemical that was leaking into groundwater. Despite the environmental damage, Methanex claimed California's ban was an unfair restraint of trade under NAFTA. The case is still pending.

In two unprecedented Chapter 11 cases foreign corporations that lost cases in U.S. domestic courts have taken those cases to be “reheard” under NAFTA's Chapter 11 provision. One case challenged the concept of sovereign immunity involving a contract dispute with the City of Boston, and the other challenged the rules of civil procedure, the jury system and a damage award in a Mississippi state court contract dispute.

Having an international tribunal reviewing U.S. court judgments amounts to “the biggest threat to United States judicial independence that no one has heard of, and even fewer people understand,” said Georgetown University law Professor John D. Echeverria.

Recently, the Conference of Chief Justices, the National Association of State Attorneys General, the National League of Cities and the National Conference of State Legislatures have criticized the Chapter 11 provisions for impinging on state and court authorities.

University of Chicago law Professor Alan O. Sykes says concerns about NAFTA's two Chapter 11 challenges of U.S. court decisions are largely a tempest in a teapot — at least so far. “It could turn out to be a bigger deal down the road, but so far no great damage has been done by these cases.” Technically, he points out, trade tribunals cannot overturn a U.S. court decision; they can only hold a state liable for damages if the tribunal finds the court's decision discriminated against a foreign corporation.

With regard to Chapter 11 decisions redefining corporate property rights, Sykes says, the NAFTA governments have issued a clarification that the provision was not meant to do that. “My feeling is that the arbiters have gotten the message that their decisions have gone too far. They've figured out which end is up, and are trying not to create all sorts of mess.”

Critics of the global trading system particularly chafe at the secretiveness and lack of accountability of the often-anonymous three-judge panels that make WTO and NAFTA decisions. “Hidden beneath the 'free trade' cover was an entire, anti-democratic governance system under which policies affecting our daily lives in innumerable ways are decided out of our sight or control,” says a Public Citizen assessment of NAFTA.

Indeed, the Methanex case was heard by a three-judge panel in closed-door proceedings, and no one from the California state government or the environmental and consumer-protection groups that had fought for the MTBE ban were notified of the hearings, nor were they allowed to file briefs supporting the measure.

But Sykes dismisses charges that the international trade regime threatens democracy. “Democratically elected leaders signed these treaties because they felt it was in their national interest,” he says. “Any time you agree to something under international law, you restrict a country's freedom of action.” In exchange, the United States “gets a lot out of these treaties. We get less-expensive imported goods, lower inflation, access to foreign markets and protection for intellectual property abroad.”

However, Georgetown's Stumberg says the secrecy is part of a pattern in which a growing number of “hot-button issues” that conservatives have long sought unsuccessfully in Congress and the U.S. courts — such as tort reform, “regulatory takings” reform, sovereign immunity, curtailment of states' regulatory powers and local permitting authority — are now being debated in inaccessible international venues.

“All the kinds of things that investors and governments fight about in U.S. courts are migrating over to these international forums,” says Stumberg, adding that he did not think the migration was “by accident.”

Indeed, NAFTA's architects knew exactly what they were doing when they wrote Chapter 11, contends Daniel Price, a Washington lawyer who helped to write the provisions. “The parties did not stumble into this. This was a carefully crafted definition. NAFTA checks the excesses of unilateral sovereignty.”

[1] Quoted in Adam Liptak, “Review of U.S. Rulings by Nafta Tribunals Stirs Worries,” The New York Times, April 18, 2004, Sec. 1, p. 20.

Footnote: 1. Quoted in Adam Liptak, “Review of U.S. Rulings by Nafta Tribunals Stirs Worries,” The New York Times, April 18, 2004, Sec. 1, p. 20.

[2] Under U.S. law, a company can claim damages from a “regulatory taking” only if its actual property has been rendered almost 100 percent useless because of a government action. But the international trade panels are interpreting Chapter 11 to mean that a company's property has been “taken” if a small percentage of its estimated future profits has been impacted. The U.S. government is including Chapter 11 powers in other bilateral and regional trade agreements currently being negotiated, and would eventually like to expand the powers to cover the entire Western Hemisphere under the proposed Free Trade Agreement of the Americas.

Footnote: 2. Under U.S. law, a company can claim damages from a “regulatory taking” only if its actual property has been rendered almost 100 percent useless because of a government action. But the international trade panels are interpreting Chapter 11 to mean that a company's property has been “taken” if a small percentage of its estimated future profits has been impacted. The U.S. government is including Chapter 11 powers in other bilateral and regional trade agreements currently being negotiated, and would eventually like to expand the powers to cover the entire Western Hemisphere under the proposed Free Trade Agreement of the Americas.

[3] “The Ten Year Track Record of the North American Free Trade Agreement: Undermining Sovereignty and Democracy,” Public Citizen, 2004.

Footnote: 3. “The Ten Year Track Record of the North American Free Trade Agreement: Undermining Sovereignty and Democracy,” Public Citizen, 2004.

[4] See William Greider, “The Right and US Trade Law: Invalidating the 20th Century,” The Nation, Oct. 15, 2001.

Footnote: 4. See William Greider, “The Right and US Trade Law: Invalidating the 20th Century,” The Nation, Oct. 15, 2001.

[5] The cases are Loewen v. United States (Mississippi) and Mondev International Ltd. v. United States (Massachusetts).

Footnote: 5. The cases are Loewen v. United States (Mississippi) and Mondev International Ltd. v. United States (Massachusetts).

[6] Greider, op. cit.

Footnote: 6. Greider, op. cit.

[7] Public Citizen, op. cit.

Footnote: 7. Public Citizen, op. cit.

[8] Greider, op. cit.

Footnote: 8. Greider, op. cit.

Bibliography

Books

Carter, Barry E., Phillip R. Trimble and Curtis A. Bradley , International Law (4th ed.), Aspen Law & Business, 2003. The law school casebook provides comprehensive coverage of court decisions, executive branch action and other materials on international law issues. Carter is a law professor at Georgetown University; Trimble at the University of California, Los Angeles; and Bradley at the University of Virginia.

Damrosch, Lori F., Louis Henkin, Richard Crawford Pugh, Oscar Schachter, and Hans Smith , International Law: Cases and Materials (4th ed.), West, 2001. The law school casebook thoroughly covers international law topics, including a succinct introduction to the history of international law. Includes a four-page guide to official and private Internet sources on international law. Damrosch and Smith are professors and Henkin and Schachter professors emeriti at Columbia University School of Law; Pugh is a professor at the University of San Diego School of Law.

Murphy, John F. , The United States and the Rule of Law in International Affairs, Cambridge University Press, 2004. The book analyzes and assesses the role of international law in U.S. foreign policy. Includes chapter notes. Murphy is a professor at Villanova Law School.

Murphy, Sean D. , United States Practice in International Law: Volume 1, 1999-2001, Cambridge University Press, 2002. The reference book combines original source material with explanatory narratives to cover U.S. practice in international law, topic by topic, from 1999-2001. The next volume covers 2002-2004 [forthcoming, 2005]. Murphy, a professor at George Washington University School of Law, is also coauthor with Thomas Buergenthal of Public International Law in a Nutshell (3d ed.), West, 2002.

Rose, David , Guantanamo: The War on Human Rights, New Press, 2004. The British journalist presents a highly critical account of detention and interrogation policies at the Guantanamo Bay Naval Base as inconsistent with international law standards.

White, Richard Alan , Breaking Silence: The Case That Changed the Face of Human Rights, Georgetown University Press, 2004. The book vividly recounts the torture-murder of Joelito Filártiga, teenaged son of a prominent Paraguayan opposition leader; the Filártiga family's use of the Alien Tort Claims Act to sue the responsible police inspector in U.S. courts and the impact of the court decisions in favor of the suit. White is a senior fellow at the Council of Hemispheric Affairs in Washington.

Articles

Alford, Roger P. , “Misusing International Sources to Interpret the Constitution,” American Journal of International Law , January 2004. An associate professor at Pepperdine University School of Law argues against the Supreme Court's use of foreign and international law in constitutional interpretation.

Greene, Jenna , “Gathering Storm: Suits That Claim Overseas Abuse Are Putting U.S. Executives on Alert and Their Lawyers on Call,” Legal Times , July 21, 2003. The story gives an overview of issues surrounding suits against corporate defendants under the Alien Tort Statute.

Kelly, J. Patrick , “The Twilight of Customary International Law,” Virginia Journal of International Law , Vol. 40, winter 2000, pp. 445-539. A professor at Widener University School of Law argues that treaties are replacing customs and practices as the major sources of international law.

Neuman, Gerald L. , “The Uses of International Law in Constitutional Interpretation,” American Journal of International Law , January 2004. A professor at Columbia University School of Law argues in favor of the Supreme Court's use of foreign and international law in constitutional interpretation.

Reports and Studies

Hufbauer, Gary Clyde, and Nicholas K. Mitrokostas , “Awakening Monster: The Alien Tort Statute of 1789,” Institute for International Economics, July 2003. The tract traces the history of the Alien Tort Statute and strongly criticizes its recent use in broad-based human rights suits in U.S. courts against foreign officials and, in particular, multinational corporations. Includes summaries of 23 suits brought under the act since the seminal case, Filártiga v. Pena-Irala (1980). The study was partially funded by the National Council on Foreign Trade, a business group that opposes expansive use of the act.

United Nations, “A More Secure World: Our Shared Responsibility: Report of the Secretary-General's High-level Panel on Threats, Challenges and Change,” Nov. 30, 2004 The report is aimed at forging a “new security consensus” to deal with threats to peace and order posed by terrorism, failed states and nuclear proliferation. The United States, however, rejected one of the major premises — that only the Security Council can authorize the use of force as preventive action against a threat to stability.