Both the Appendix and the updated report are available as part of the working paper series at the AHRC Research Centre for Studies in Intellectual Property and Technology law at the University of Edinburgh.

Working papers at the Centre.

MANAGUA, Nicaragua: President Daniel Ortega has asked the United States and the European Union to set up “compensation funds” to offset the effects of free trade and globalization on poorer nations like Nicaragua.

Ortega said Wednesday that he had broached the idea with representatives of the EU – with which Nicaraguan is discussing a possible trade deal – and the United States, which along with Nicaragua is part of the Central American Free Trade Agreement.

“We have explained to the Europeans that if there is no compensation fund, the association (agreement) would have no future,” Ortega told a meeting of businesspeople.

Could this be an influence of Nicaragua’s recent accession into ALBA – the Bolivarian Alternative for the Americas – that Chavez and Morales started?

In the rest of the article, Ortega argues for a development plan similar to that used by the EU for new member states in order to get their infrastructure up to par with the rest of the Union.

The article points out, in short, that the reality of NAFTA did not lead to greatly decreased illegal immigration. The key factor is that the projections on government spending to increase infrastructe did not turn out to be true. Dani Rodrik, an economist and trade specialist at Harvard’s John F. Kennedy School of Government explained:

“We have indeed had one disappointment after another on this score,” Mr. Rodrik said, noting that the same assumption about government spending is part and parcel of the agreements, now before Congress, with Columbia, Peru and Panama.

Rodrik also compared the NAFTA (and DR-CAFTA) approach to the EU:

The European Union, in contrast, assumes little about government spending on the part of economically weaker nations joining it. The union itself has hugely subsidized the improved services needed by entering countries like Portugal, Spain, Greece and Poland, rather than leave financing to the relatively meager resources of entering countries.

Though this goes into the bigger picture questions of FTAs, I note that several legal scholars who have looked at e-commerce in Latin America have noted that a solid infrastructure is required in order to expand e-commerce as well. Roads and other transportation networks are key to deliver products ordered over the internet, as well as increasing telecom infrastructure to get people on the internet in the first place.

DR-CAFTA will become a fertile ground for more comparative study in this area. As this is just the beginning of the agreement, only time will tell.

an appropriate procedure for the settlement of disputes based on the principles established in the Uniform Domain-Name Dispute Resolution Policy.

For those of you who don’t know, a ‘ccTLD’ is the Top Level Domain name (TLD) based on the individual nation’s country code (cc). A TLD is the last part of any domain name, i.e. the ‘.com’, ‘.uk’ or ‘.eu’. Individual countries have control over how their own ccTLD is administered, and this Article requires parties to use a specific method of resolving domain name disputes — the UDRP developed by ICANN.
The ‘UDRP-like’ requirement is in other FTAs involving the United States:

• Chile-US in Article 17.3
• Singapore-US in Article 16.3
• Australia-US in Article 17.3

In addition, a UDRP requirement can be found in the drafts of the Free Trade Area of the Americas agreement.

In the course of conducting my research, I haven’t run across much in the way of legal academic work examing the proliferation of the UDRP in the FTA context. Searches in the UK and US Westlaw databases (UK-JLR & TP-ALL), and on the general web, have turned up few mentions of the subject. This looks like at least one area that will come out of this project as being identified for further research.

Follow up posts on this issue to come.

• Intellectual Property and its impact on the field, including domain name issues and peer-to-peer file sharing;
• Internet governance;
• Taxation and e-payments;
• Contracting electronically;
• Security and reliability issues, including spam and DDOS attacks;
• Authentication issues and digital signatures;
• Consumer protection issues;
• Content regulation issues, including defamation and pornography;
• Competition law aspects of e-commerce related businesses;
• Human rights issues, in particular privacy;
• Jurisdictional issues and the internet;
• Telecoms issues, such as net neutrality and the interplay between telecoms policy and the law.

However, from the trade lawyer perspective, e-commerce tends to be look at in terms of:

• Does e-commerce fit (if at all) within GATT, GATS, or both agreements?
• How do trade policies involving e-commerce fit within the policy of technology neutrality in the WTO?
• Is an internet transaction Mode 1 (travelling abroad) or Mode 2 (cross-border) within GATS?
• How does ‘likeness’ fit in with providing e-commerce services? Does this conflict with policy of technology neutrality?
• In particular with telecoms and ISP issues, what are the competition law aspects and how do they fit in with GATT and GATS?
• Are digitizable products goods or services?
• What is the relationship between e-commerce and MFN and national treatment obligations?

The first set, the IT lawyer perspective, doesn’t really make it the sections on ‘e-commerce’ in these agreements. It is true, however, that issues such as telecoms policy and IP do get addressed in FTAs. Taxation issues tend to be addressed in tax treaties and not in trade agreements. As to human rights issues, whether or not these can (or should) be addressed in the trade context is an area of some research.

This leaves issues such as:

• Internet governance;
• Contracting electronically;
• Security and reliability issues, including spam and DDOS attacks;
• Authentication issues and digital signatures;
• Consumer protection issues;
• Content regulation issues, including defamation and pornography;
• Jurisdictional issues and the internet.

The above ‘e-commerce’ issues are generally not addressed (at least not directly) in these agreements. Though it falls outside of the scope of the core goal of this project, looking at the possibility of addressing these issues in FTAs is interesting. This kind of study would by necessity have to look at the institutional aspects of regulating in these areas — I’m thinking of the forum shift from WIPO to the WTO that happened in relation to IP.

Could we see issues such as the Proposed Convention on Jurisdiction and Foreign Judgments in Civil and Commercial Matters be brought up within the trade context?

I attended a lecture/talk at a meeting of the Legal Theory Reading Group here at the University of Edinburgh last night by Professor Zenon Bankowski about a new paper he is working on. I’m certainly no legal theory expert, but this is what I gathered was the core of his idea:

• The act of giving necessarily means that you will change because of that gift — this is related to the idea that you expect/get something in return whenever you give, even if it is just a warm fuzzy feeling.
• People naturally fear change.
• The fear of change is reduced by giving only to people who are like you (or act within your expectations).
• Law structures how we give and reduces the risk with giving.
• The entire process, and especially the idea of law as an institution governing our relationships, is in a process of feedback with our individual acts.

Now I don’t want to get into to much of the theory, but I was thinking about this as illuminating to the psychology of FTAs — specifically about the idea of only transacting business (giving) with those whom you understand (i.e. are like you). This seems to me to have some relationship with Foreign Direct Investment (FDI), which is the key goal for many developing countries when they decide to sign an FTA.

A Free Trade Agreement is a means to structure the law, and perhaps thus a society, to a model familiar to businesses that would like to compete in that market. Businesses, if we can speak of them as having a personality, would be risk-adverse to experiencing new ways of doing business. They ‘want’ to do business in ways known to them in order to limit their risks.

In addition, from an economics standpoint we should also discuss transaction costs — there will be a fixed set of costs to expand business into a new foreign market. The closer that market resembles a familiar model, the less expanding into that market might cost.

Do and Watson, in Economic Analysis and Regional Trade Agreements, ask the question:

Would transaction costs in an RTA-riddled world be that much higher than in a world in which each nation-state established its own tariffs and ran a full set of non-tariff barriers?

Their ‘optimistic reverie’ is that if the world was divided up ‘into 10 or 15 RTAs within each of which WTO rules held sway’ that this would facillitate trade and would alleviate some of the institutional difficulties of the WTO. Note that Regional Trade Agreements is used as a term to describe both FTAs and Customs Unions.
Now, I don’t want to ramble on too long, but it is worth thinking about how these agreements export a set of values and way of doing business. This is a topic that often arises in the IP context when discussing Traditional Knowledge (and how to protect it, especialy ‘bio-prospecting’) and Access to Medicines issues surrounding patent law.

In the IT field, the DR-CAFTA agreement exports features of the US Digital Millenium Copyright Act (ISP liability and anti-circumvention measures) to the other signatories. This locks these countries in to a certain way of interpreting the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT).

Though this project focuses more on how things are ‘on the ground’, the intellectual exercise of stepping back and looking at the big picture has many benefits.

“free trade” does not exist–it’s a marketing phrase intended to blind people by using two words that few people would find objectionable (everyone likes the idea of trading and who is against something that’s FREE!!!)

This kind of talk reminds me of that other famous ‘free’ — the one in ‘free software’. Stallman’s saying for elaborating that free is ‘free as in free speech, not as in free beer‘.

It also is, as Tasini rightly points out, that part of the politics behind these agreements is the language used — as any politician can tell you. Any geek can as well — there is an entire debate over the terms ‘open source’ versus ‘free software’, with many people (myself included) often compromising with FOSS (Free and Open Source Software).

The only other term that I can think of for the agreements (as opposed to the concept generally) is ‘regional trade agreements’, which is the phrase used in the (excellent) new book Regional Trade Agreements and the WTO Legal System edited by Edinburgh academic Lorand Bartels and Federico Ortino (I just got it for this project).

So should this blog be called the ‘regional trade blog’?

One answer is simply that ‘Free Trade Agreement’ is much more popular than the alternative (1 million+ hits versus 58,000 on Google) and therefore is the better in terms of site recognition and accepted use.

Another answer would be that ‘free trade’ is the simply the name of the market concept that is driving these agreements, even if the result is less than the pure concept. ‘Free trade’ is the condition where trade is not restricted by tariff or non-tariff barriers. I’ll be posting more about the concept, and its relationship to IP and IT, in the coming weeks and months.

This post also triggered memories of discussing the Sapir-Whorf Hypothesis in undergraduate anthropology classes. In short, Sapir-Whorf is a hypothesis about how language shapes thought (or vice versa). The idea reinforces the need to be clear and concise in picking words when discussing these issues. I’ll concede that speaking and writing about all the concepts inherent in these agreements as ‘free trade’ may indeed obfuscate the real impact of these agreements.

However, getting to the real impact is exactly what this study is about, and we aim to provide detailed materials about both the big picture issues as well as what these agreements mean to individual businesses on the ground.

As a side note, Adam Smith was, of course, one of the first free trade theorist. His grave is, amaazingly enough, down the street from my office — maybe I’ll have to pay it a visit and reflect on the impact one book can have on the whole world.