Theresa Carpenter

Lost in Translation: Communication and Interpretation Challenges Related to Economic Evidence in Trade Disputes

Recent years have witnessed numerous instances in which economic evidence has been submitted to adjudicators in the context of WTO disputes. As it turns out, adjudicators have used this evidence only hesitantly as a basis for their decisions. In this paper we argue that a number of communication and interpretation challenges arising from the use of quantitative economic evidence can explain this phenomenon. In particular, we argue that it is in the current context difficult for adjudicators to assess the reliability and (un)biasedness of such evidence. Guidelines on how to assess quantitative evidence and benchmarks against which to evaluate the quality of such evidence may represent a useful if not necessary step in order to raise the acceptance of the use of quantitative evidence in trade disputes.

The use of economics in international trade and investment disputes

Global markets have become increasingly integrated both in terms of the size of trade and investment flows and in terms of the number of players involved. Global trade and investment flows are governed by a set of national, regional and global legal frameworks that interact at different levels. Increasingly, questions arise regarding how those frameworks fit together and how they can be made more coherent. This volume focuses on one particular aspect of this question: how dispute settlement arrangements in the different fields of international economic law covered by the agreements fit together, with the focus on the fields of international trade law and international investment law, and how in each of these fields the discipline of economics has played or can play a role. It brings together contributions from practitioners and academics to assess both the latest academic insights on the use of economics in international economic law and the practical implications of increased interweaving of the two disciplines for those involved in a dispute. The overarching theme of the volume is highly technical and potentially complex because it invokes the expertise of different disciplines, notably economics and law. At the same time, this theme is of high practical relevance as it goes to the very heart of the raison d’être of treaties of international economic law and of their acceptance by the general public. Indeed, public debate on and protest against international treaties has repeatedly arisen around decisions taken in disputes, notably when such cases dealt with important public policy issues, such as in the case of the so-called hormones or biotech products disputes (US-EC) at the WTO or the ISDS

An Economic Assessment of Contracts, Requests for Contract Reform, and Damages in International Arbitration

In international arbitration, economic experts take legal instructions from counsel and the arbitral tribunal to assess damages. It is important that the economic assessment is conducted in accordance with the relevant legal standards. In this way, the damage calculation is not simply a detached profits calculation or business valuation – even though valuation techniques are drawn upon – but an economic assessment that aligns damages and liability under the relevant contract and applicable law. The interaction between legal and economic practitioners is not a one-way street. Economists can provide conceptual and factual inputs that help establish how the damages quantum should be brought into line with the claimant’s loss. Moreover, while claims for damages have a legal basis (and arbitral decisions are fundamentally legal decisions), economics can provide analysis that informs the decision on the merits of a claim, including the key question of whether the claimant has been harmed. After all, at the core of international arbitration lie commercial and investment activities, which are understood through economic principles. In his chapter on assessment of damages in investment arbitration, Wolfgang Alschner (Chapter 14) establishes a theoretical framework for how