Andrew T. Guzman

A Compliance-Based Theory of International Law

Introduction ............................................................................................ 1826 I. Existing Theories of International Law ........................................... 1830 A. Traditional Legal Theories ........................................................ 1830 B. International Relations Theories ............................................... 1836 II. A Theory of Compliance ................................................................. 1840 A. A Theory of the Irrelevance of International Law .................... 1841 B. A Theory of the Relevance of International Law ..................... 1844 C. An Application of the Model: Bilateral Investment Treaties... 1851 D. Dynamic Issues ......................................................................... 1853 E. The Level of Commitment ........................................................ 1854 F. International Law and Coordination ......................................... 1857 III. Violation and Compliance ............................................................... 1860 A. Reputational Sanctions ............................................................. 1861 B. Direct Sanctions ........................................................................ 1865 C. When Will Sanctions Work Best? .......................... . . .. . . . .. . . .. . . .. . 1868 D. Acceptance of Sanctions ........................................................... 1871 IV. Rethinking International Law .......................................................... 1872 A. Rethinking Treaties ................................................................... 1873 B. Rethinking Customary International Law ................................. 1874 C. Rethinking International Law ................................................... 1878 D. The Problem of Large Stakes .................................................... 1883

Power Plays and Capacity Constraints: The Selection of Defendants in World Trade Organization Disputes

This paper examines the relationship between the wealth and power of states and their ability to participate fully within the World Trade Organizations system of dispute resolution. Two alternative hypotheses are considered. The power hypothesis predicts that politically weak countries will refrain from filing complaints against politically powerful states for fear of costly retaliation. The capacity hypothesis predicts that low‐income states will tend to complain about behavior by high‐income states because the latter offer a higher expected return. We test these two hypotheses and find considerable support for the capacity hypothesis and no support for the power hypothesis. We conclude that poor states behave differently than their rich counterparts because they lack the financial, human, and institutional capital to participate fully in the dispute resolution system.

The Design of International Agreements

T HE D ESIGN OF I NTERNATIONAL A GREEMENTS Andrew T. Guzman * This Draft: November 10, 2004 Professor of Law, Boalt Hall School of Law, University of California at Berkeley. I owe thanks to Stephen Choi, Jeff Atik, Allen Ferrell, Ryan Goodman, Oona Hathaway, Larry Helfer, Louis Kaplow, Kal Raustiala, Steven Shavell, Beth Simmons, Joel Trachtman, Fred Tung, and participants at faculty seminars at Harvard Law School, Loyola Law School, Temple University’s James E. Beasley School of Law, the University of Toronto School of Law, UCLA Law School, and Yale Law School, for helpful comments and discussions. Special thanks to Daniel Frederick and Nicholas James. Jennie Wang and Rachel Anderson provided excellent research assistance.

International Soft Law

Although the concept of soft law has existed for years, scholars have not reached consensus on why states use soft law or even whether “soft law” is a coherent analytic category. In part, this confusion reflects a deep diversity in both the types of international agreements and the strategic situations that produce them. In this paper, we advance four complementary explanations for why states use soft law that describe a much broader range of state behavior than has been previously explained. First, and least significantly, states may use soft law to solve straightforward coordination games in which the existence of a focal point is enough to generate compliance. Second, under what we term the loss avoidance theory, moving from soft law to hard law generates higher sanctions that both deter more violations and, because sanctions in the international system are negative sum, increase the net loss to the parties. States will choose soft law when the marginal costs in terms of the expected loss from violations exceed the marginal benefits in terms of deterred violations. Third, under the delegation theory, states choose soft law when they are uncertain about whether the rules they adopt today will be desirable tomorrow and when it is advantageous to allow a particular state or group of states to adjust expectations in the event of changed circumstances. Moving from hard law to soft law makes it easier for such states to renounce existing rules or interpretations of rules and drive the evolution of soft law rules in a way that may be more efficient than formal renegotiation. Fourth, we introduce the concept of international common law (ICL), which we define as a nonbinding gloss that international institutions, such as international tribunals, put on binding legal rules. The theory of ICL is based on the observation that, except occasionally with respect to the facts and parties to the dispute before it, the decisions of international tribunals are nonbinding interpretations of binding legal rules. States grant institutions the authority to make ICL as a way around the requirement that states must consent in order to be bound by legal rules. ICL affects all states subject to the underlying rule, regardless of whether 1 Professor of Law, Berkeley Law School 2 Assistant Professor of Law, University of Georgia School of Law. We are grateful to Ken Abbott and the participants in the ASIL/IELIG 2009 Research Colloquium, held at UCLA Law School, for helpful comments and to Ryan Lincoln for research assistance. D ow naded rom http/academ ic.p.com /jla/article-ct/2/1/171/846831 by gest on 05 M arch 2019 172 ~ Guzman, Meyer: International Soft Law they have consented to the creation of the ICL. As such, ICL provides cooperationminded states with the opportunity to deepen cooperation in exchange for surrendering some measure of control over legal rules. These four explanations of soft law, and in particular the theory of ICL, provide a firm justification for the coherence of soft law as an analytic category. They demonstrate that legal consequences flow from a range of nonbinding international instruments, just as nonbinding documents in the domestic setting, such as legislative committee reports, often have legal consequences when, for example, used to interpret binding rules. Moreover, the theories offered in this paper explain the circumstances under which this quasi-legal characteristic of soft law will be attractive to states.

Keeping Imports Safe: A Proposal for Discriminatory Regulation of International Trade

The benefits of overseas outsourcing have come at a cost. Americans enjoy unprecedented levels of safety and security in the domestically-produced goods they use, food and drugs they ingest, and services they employ. Yet as U.S. firms increase the efficiency of their production, become more competitive globally, and offer better price-quality combinations to their customers by contracting with foreign companies for the production of goods and the provision of services, the mix of economic, legal, and societal forces that serve to protect consumers changes. Widespread revelations of Chinese-manufactured toxic toys and toothpaste, tainted food and drugs from abroad, and the failure of foreign call centers to protect the privacy of U.S. consumer data all illustrate the challenge for domestic governance. Though international trade in goods and services provides clear economic benefits, it can also frustrate consumer protection efforts. This paper provides a conceptual framework for understanding the mix of regulatory elements that govern domestic production of goods and services, and for understanding the ways in which international trade changes that mix. Specifically, it distinguishes between two types of domestic regulation—the first targeting the process by which goods are produced and services provided, and the second mandating particular outcomes. Foreign production disables the first type of regulation and weakens the second. Protecting domestic consumers in a globalized market, then, will frequently require the development of “substitutes†– including regulation by foreign governments and private regulators — for domestic forms of governance that are ineffective abroad. We propose a novel and necessary solution for addressing the threat posed by the foreign production of goods and provision of services to consumer welfare. Specifically, we make the case that the best “substitute†for domestic regulation will often be oversight of safety issues by U.S. partners in global trade. To provide incentives to domestic firms U.S. regulators should make those firms legally accountable for harmful products that make it to the United States Furthermore, they regulations should discriminate between domestic and foreign activity in regulation requiring safe outcomes, imposing higher penalties for violations of safety norms when production has taken place abroad.

Research Handbook in International Economic Law

This major work consists of carefully commissioned original and incisive contributions from leading scholars in the field of international economic law. Covering a full range of topics, the Handbook provides an accessible treatment of the law in each area, as well as a thoughtful synthesis and discussion of related public policy issues from a broadly social science perspective.

The Global Diffusion of Markets and Democracy: Competing for capital: the diffusion of bilateral investment treaties, 1960–2000

Over the past forty-five years, bilateral investment treaties (BITs) have become the most important international legal mechanism for the encouragement and governance of foreign direct investment. Their proliferation over the past two decades in particular has been phenomenal. These intergovernmental treaties typically grant extensive rights to foreign investors, including protection of contractual rights and the right to international arbitration in the event of an investment dispute. We argue that the spread of BITs is driven by international competition among potential host countries - typically developing countries - for foreign direct investment. We design and test three different measures of competition. The evidence suggests that potential hosts are more likely to sign BITs when their competitors have done so. We also control for diffusion via coercion, social learning, and cultural networks. We find some evidence that coercion plays a role, but less support for learning or cultural explanations. Our main finding is that diffusion in this case is associated with competitive economic pressures among developing countries to capture a share of foreign investment. We are agnostic at this point about the benefits of this competition for development.

How International Law Works: Introduction

How International law works offers a theory to explain why states comply with their international legal obligations. It then applies that theory to the field of international law, testing the conventional wisdom on how international law operates and why it looks the way it does.

Chapter 10. Importers as Regulators Product Safety in a Globalized World

In the wake of scandals involving lead toys, toxic toothpaste, poisonous pet food, and other dangerous products in recent years, policymakers have proposed a variety of strategies that purport to address safety concerns. Though many of these proposals would have salutary effects on consumer product safety, they do not provide, either individually or collectively, a full solution to the problem. This chapter offers a different proposal for addressing the challenges that global production poses for state-centered regulation of import safety. We argue that regulators should structure administrative penalties to make private importers regulate the foreign manufacturing processes from which they benefit.Specifically, we make the case that where U.S. regulators expect a threat to consumer protection from foreign goods and services, they should augment the legal penalties imposed against foreign and domestic partners in international trade that are within the reach of American authorities. This enhanced threat of legal liability would serve to ensure that these parties act as de facto regulators of the foreign activity from which they benefit, even when those activities themselves are beyond the reach of American law. Trade in domestic goods and services would not trigger the same penalties because these products face regulation of the production process that, in principle, achieves the desired level of safety.

International competition law

This major work consists of carefully commissioned original and incisive contributions from leading scholars in the field of international economic law. Covering a full range of topics, the Handbook provides an accessible treatment of the law in each area, as well as a thoughtful synthesis and discussion of related public policy issues from a broadly social science perspective.