Timothy Meyer

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.

Epistemic Institutions and Epistemic Cooperation in International Environmental Governance

Much recent scholarship in international law on the relationship between science and policy argues that the expert bodies that generate policy-relevant scientific advice (“epistemic institutions”) should be autonomous from the institutions which use that advice as an input to make international legal rules (“legal institutions”). In this article, I argue that legal institutions’ acquisition of policy-relevant scientific advice is akin to the make-or-buy decision faced by firms: legal institutions can either acquire such advice from independent epistemic institutions or they can seek such advice from an internal and hierarchically subordinate epistemic institution. I then apply the theory of the firm to show that the conventional wisdom about the benefits of scientific autonomy is incorrect.Scientific advice must be credible in the eyes of non-expert regulators in order to support the widespread adoption of legal rules to address transnational environmental problems. Where states individually lack the incentive to regulate an environmental problem absent a collective decision, states that lack the capacity to directly assess the credibility of the scientific record may block the adoption of legal rules in international institutions out of fear that the scientific assessment process is biased to produce particular policy outcomes. Hierarchical control of epistemic institution can overcome this problem by giving such states direct oversight of the scientific assessment process, thereby reassuring them of the credibility of the scientific record.By contrast, where states internalize a sufficient amount of the benefit from regulating an international problem unilaterally, fragmenting legal and epistemic institutions is optimal. Where a collective decision is not necessary to coordinate state behavior, the decentralized adoption of policy-relevant scientific recommendations signals to scientifically-disadvantaged states that the scientific record is credible, thereby eliminating the need for hierarchical controls to perform the same function. Fragmentation is thus the ideal mode of organization because it best facilities the development and diffusion of policy-relevant science. This framework explains much of the variation we observe in the independence of international scientific bodies from legal institutions. Legal institutions governing commons issues, such as the International Whaling Commission or a variety of fisheries regimes, have integrated scientific bodies to deal with the opportunism issues created by the need for collective decision-making. By contrast, organizations such as the International Renewable Energy Agency – an independent epistemic institution that produces and disseminates information about renewable energy technologies and their economic viability – do not create the same kinds of opportunism issues because states have an incentive to act individually on the basis of the epistemic institution’s recommendations. More generally, the application of new institutional economics to explain vertical integration decisions within international institutions opens a field of inquiry that might be expanded to explain a variety of regime design puzzles in international law, such as for example the variation in the extent to which international legal institutions create institution-specific courts (such as the International Tribunal for the Law of the Sea) or outsource disputes to standing bodies (such as the International Court of Justice).

Explaining energy disputes at the World Trade Organization

Abstract The international trade regime has seen an explosion of challenges to government support for renewable energy in recent years, yet fossil fuel subsidies, which dwarf renewable energy subsidies, have remained unchallenged. Existing explanations for this puzzling discrepancy have focused on four rationales: major fossil fuel exporters have not historically been members of the General Agreement on Tariffs and Trade/World Trade Organization (WTO); WTO subsidies rules are inadequate to deal with the specifics of the fossil fuel trade; nations have developed separate institutions to govern energy; and all states have fossil fuel subsidies, so a challenge to one country’s subsidies will prompt a reciprocal challenge. This article makes two contributions. First, it uses a survey of existing renewable energy trade disputes to critique the existing explanations. Most importantly, the article shows that the threat of reciprocal litigation exists in the renewable energy sector, and that WTO subsidies rules are rarely used to challenge renewable energy subsidies. Hence, neither the threat of reciprocal litigation nor the relative ease of applying WTO subsidies rules explains the discrepancy in the number of disputes. Second, the article hypothesizes that the economic diversification of energy-producing countries is correlated with and may drive whether energy-producing countries face WTO challenges to their energy support policies. Most major fossil fuel producers lack significant non-fossil fuel exports that could be restricted in order to induce them to reform their fossil fuel policies, the usual mechanism for enforcing a WTO judgment. States may also be more likely to challenge new, rather than long-standing, trade restrictions. This suggests that trade challenges will arise more frequently where innovation leads to competition and a demand for new trade restrictions (as in renewable energy), as opposed to in mature sectors of the economy (i.e., the fossil fuel industry). Economic diversification, in turn, is a good predictor of innovation.

The World Trade Organization’s Role in Global Energy Governance

The World Trade Organization is by many accounts the most successful international organization in history. Yet it has been slow to address head-on the problems in one of the largest sectors of the global economy—energy. Indeed, fuel exports alone constitute roughly 18% of global merchandise exports, the single largest category. Historically, this reluctance to engage with energy can be explained partially by the fact that many major fossil fuel-producing nations were outside of the GATT. Today, however, most such nations are WTO members. While the WTO dispute settlement system has become an active tool for regulating government support of the renewable energy sector, active WTO regulation of the fossil fuel sector remains limited. This chapter presents an overview of WTO rules and how they apply or might apply to the energy sector. It further argues that this differential treatment between fossil fuels and renewable energy reflects (a) the greater number, and the identity, of nations that aspire to be “producers” of renewable energy, and (b) the expected growth in renewable energy in years to come.

Local Liability in International Economic Law

On February 4, 2016, the United States and eleven other countries signed the Trans Pacific Partnership (TPP) — the most far-reaching free trade agreement since the World Trade Organization’s founding in 1995. The TPP’s potential ratification promises to be one of the major fights during the last months of the Obama Presidency. Unlike most prior trade agreements, the TPP’s purported benefits do not come primarily from reductions in tariffs paid on goods at the border. Instead, they flow from assumptions that so-called non-tariff barriers — such as discrimination against foreign investors or service providers — will fall significantly under TPP. Yet to date unnoticed among the TPP’s 30 chapters, schedules, and annexes are provisions that exempt state, provincial, and local measures from compliance with many of the agreement’s nondiscrimination rules. Under the TPP, subnational governments such as California or Ontario — governments with substantial regulatory authority over regional economies much larger than many national economies — may indefinitely continue existing discriminatory policies against foreign investors or foreign service providers. These exemptions represent the multilateralization of a trend underway for a number of years in U.S. treaty practice: efforts to eliminate the federal government’s liability for subnational action that the federal government often cannot control and of which it is frequently unaware. Indeed, 41% of the claims brought under the investor-state dispute settlement (ISDS) provisions of the 1994 North American Free Trade Agreement (NAFTA) have challenged subnational government action. These exemptions also reflect a growing pushback against ISDS. Contrary to U.S. treaty practice and ISDS’s critics, this Article argues that foreign investors or aggrieved trading partners should be able to make their claims directly against subnational governments such as California, rather than only against national governments like the United States. I make the case by presenting and analyzing international liability rules for local action. Governments use three kinds of local liability rules: 1) immunity, under which neither the subnational nor national governments are answerable under international law for the actions of a subnational government; 2) vicarious liability, under which nations are liable for the actions of their subnational units even if they do not control them as a matter of domestic law; and 3) direct liability, under which a claimant’s case is brought directly against the offending subnational government. Vicarious liability is the default rule under the international law of state responsibility. However, immunity — the rule under an increasing number of economic treaties, including TPP’s investment and services chapters — is on the rise. Direct liability is rare, but exists in certain investment agreements and applies to the European Union. The choice among these liability rules is the most important front in efforts to reconcile a robust federalism with the increasing importance of local governments to international affairs — an ongoing battle in the United States, the European Union, and other federal nations. Direct liability best achieves the twin goals of fostering local governance and international cooperation for three reasons. First, direct liability would force subnational governments to internalize the costs of their actions, thereby deterring violations. Under vicarious liability, the costs of violations are born by the national government, and under immunity they are born by the claimant who is left with no recourse. Second, a move to direct liability would have beneficial distributional consequences, ensuring that powerful federal nations do not force liberalization in developing countries while protecting discriminatory practices within their own countries. Third, a move to direct liability recognizes the considerably more important role subnational governments play in international affairs today. From climate change and renewable energy to international trade, subnational governments are incredibly active in tackling matters of international concern. They should also bear responsibility for their actions.

The Evolution of Codification: A Principal-Agent Theory of the International Law Commission’s Influence

The International Law Commission has a mandate from the U.N. General Assembly to codify and progressively develop international law. For most of the ILC’s history, the lion’s share of its work took the form of draft articles adopted by the General Assembly as the basis for multilateral conventions. The ILC’s activities received their principal legal effect during this period through the United Nations treaty-making process, rather than directly on the basis of the ILC’s analysis of what customary international law does or should require. In recent decades, however, the ILC has turned to other outputs — such as principles, conclusions and draft articles that it does not recommend be turned into treaties. Significantly, the Commission often claims that these outputs reflect customary international law. In this chapter, we argue that increasing political gridlock in the General Assembly has led the Commission to modify the form of the work products it produces. We make three specific contributions to the literature. First, using principal-agent theory we argue that the ILC chooses the work product that maximizes its influence in shaping the evolution of custom. Our core claim is that, as gridlock has limited the General Assembly’s ability either to adopt treaties or decisively reject non-treaty outputs, the Commission has had both the incentive and the discretion to choose other outputs that do not require General Assembly approval. Second, we provide empirical support for this claim. Drawing upon a new data set that codes all ILC outputs since 1947, we show that the Commission began to favor non-treaty outputs beginning in the early 1990s. This followed a decade when ILC treaty recommendations were not adopted by the UNGA or, if adopted, did not garner sufficient ratifications for the treaties to enter into force. Third, we argue that the shift away from draft treaties increases the salience of the methodology that the ILC uses to prepare non-treaty outputs. Methodology functions as a de facto substitute for the political blessing that flows from the General Assembly’s adoption of draft treaty articles. Adherence to methodology increases the likelihood that a wider audience — government officials, international judges, national courts and non-state actors — will accept the ILC’s non-treaty work products as valid statements of custom. We thus expect the Commission to select a methodological approach that it expects will be supported by the audience(s) it hopes to persuade.