A Sneak Peek at Professor Kelly’s Latest Research: “The Promises and Perils of Global Governance: The Case of the G20”

Professor Claire Kelly has been working with Professor Sungjoon Cho (of Chicago Kent School of Law and currently visiting at Fordham Law School) to study the workings of international coordinated governance through the use of networks. They presented their initial project at the 2010 World Trade Organization Public Forum and subsequently presented their research at a variety of venues throughout the country in 2010-2011.

In the wake of the 2008 financial crisis, a new global governance structure emerged. During and subsequent to the crisis, the G20 emerged as a coordinating executive among international governance institutions. It set policy agendas and prioritized initiatives. Working through the Financial Stability Board, the G20 coordinated with other governance institutions and networks to set standards, monitor enforcement and compliance, and aid recovery. Its partners included the International Monetary Fund, the Basel Committee on Banking Supervision, the Organization of Economic Cooperation and Development, the World Trade Organization, the International Association of Insurance Supervisors and the International Organization of Securities Commissions. Its authority cuts across regimes and creates collaborative linkages between economic law and social issues such as food security and the environment. Its leadership role, born out of exigency, now continues to evolve as part of the new international order of economic laws.

The G20’s coordination of institutions and networks exemplifies a new form of global governance. Network coordination offers an opportunity to confront complex problems with a needed comprehensive approach. The institutions and networks engage in an ongoing dialectical process that propels standard setters toward convergence on a number of fronts. The actors in this process employ a variety of tools to forge consensus and the G20 leverages this consensus-creating process to achieve its goals. Unpacking these tools can help scholars tackle intricate questions that arise from the G20’s coordination role. In particular, we focus on concerns regarding the effectiveness and legitimacy of the G20’s coordination of multiple networks and institutions.

Their paper, “The Promises and Perils of Global Governance: The Case of the G20,” is being published in the Chicago Journal of International Law.

Federal Reserve Bank of New York

The Federal Reserve Bank of New York is one of 12 regional Reserve Banks which, together with the Board of Governors in Washington, D.C., make up the Federal Reserve System. The Fed, as the system is commonly called, is an independent governmental entity created by Congress in 1913 to serve as the central bank of the United States. It is responsible for
· formulating and executing monetary policy,
· supervising and regulating depository institutions,
· providing an elastic currency,
· assisting the federal government in its financing operations, and serving as the banker for
the U.S. government.

In addition, the Federal Reserve System has important roles in operating the nation's payments systems, protecting consumers' rights in their dealings with banks and promoting individual community development and reinvestment.




The New York Fed oversees the Second Federal Reserve District, which includes New York State, the 12 northern counties of New Jersey, Fairfield County in Connecticut, Puerto Rico and the U.S. Virgin Islands. Though it serves a geographically small area compared with those of other Federal Reserve Banks, the New York Fed is the largest Reserve Bank in terms of assets and volume of activity.

The New York Fed (as it is commonly referred to) has several unique responsibilities, including conducting open market operations, intervening in foreign exchange markets, and storing gold for foreign central banks, governments and international agencies. Foremost among its functions is the implementation of monetary policy. The other two missions are supervision and regulation and international operations. http://www.newyorkfed.org/aboutthefed/whatwedo.html


STUDENT EXPERIENCE:
Yael Port ‘13

In the summer of 2011, I worked for The Enforcement, Litigation, Protection and Investigations Division of the Federal Reserve Bank of New York. This department has attorneys, investigators and staff handling litigation in which the Bank has an interest. In addition, this Division pursues regulatory enforcement investigations and formal actions under authority delegated by the Board of Governors. The Division is also responsible for conducting internal investigations in the Bank as well as having the responsibility of overseeing the Federal Reserve Law Enforcement Unit, which entails providing training and legal support for the law enforcement officers.

When interviewing for the position last year, I had mentioned that I have an interest in international law, but I did not think that would make a difference in my assignments. When I arrived, however, I found out that my mentor had saved an international tax law case for me to work on. It started out simple: looking through memoranda of understanding, finding applicable cases on Westlaw and LexisNexis, researching international standards, etc. I soon realized, however, that in order to write my memo I would have to draw on a variety of skills, some of which I would need to learn.

It was not easy at first, and I spent some time googling every possible permutation of my research terms to get a better idea of the big picture. I asked the librarians in residence for help, and they pointed me in the right direction. I learned how to find treaties using the Library of Congress and how to check their status via the United Nations. I discovered how problems arise when one country or organization has ratified a treaty but the other has yet to do so. For example, treaties often include new provisions that completely replace sections of an older treaty. One contracting state may ratify the treaty right away, but another country could take a long time to review it. If a dispute arises during that time, each country will likely claim to be bound by the version of the treaty that is most favorable to it, even the treaty itself contains a provision specifying that it does not come into effect until all parties have ratified it.

Additionally, I analyzed bilateral tax treaties in conjunction with a particular country’s tax laws in order to find ways for privileged information to be exchanged in cases of possible tax evasion and/or fraudulent activity. Furthermore, I examined not only the tax treaties and tax laws, but I also tried to tie in with the particular fact pattern at issue the relevant international guidelines, such as the Organization for Economic Co-operation and Development (OECD) Model Tax Treaty, so that I could come up witha favorable definition of tax fraud for the scenario at hand.

Ultimately, one of the most important things I learned over the summer is that bilateral agreements are only as strong as the existing relationship between the contracting states. It seems obvious now, but before I spent my summer analyzing them, I had the idea that treaties existed separately from everyday diplomacy and cross-country relations. It seemed to me that once written, signed, and ratified a treaty was binding. Now I know that while that may be true, treaties may not be executed fully if the relationship between the two states is strained or tenuous. A country may seek to act under a treaty, particularly one that is outdated and likely to be replaced, in order to persuade another state to act a certain way. It may even delay negotiations on a new treaty or amending protocol because it knows that the current treaty has become unfavorable to both sides and so it is unlikely that the other contracting state will execute the treaty against it.

It was an amazing and incredibly eye opening experience to learn about how countries actually interact with each other and how such interaction is influenced by third parties such as international or regional policy organizations. Thanks to my summer experience, my international research skills are much better than before, and I have become an expert on tax treaties!

Yael Port can be reached at yael.port@brooklaw.edu

Setting Standards at the United States Court of International Trade

Peter Tringali ’13 Block Fellow

This summer I worked as a judicial intern at the United States Court of International Trade (“the Court”). One of my responsibilities involved drafting an order and opinion on a Motion for Judgment regarding the Department of Commerce’s calculation of an antidumping duty for a “separate rate”1 company in a non-market economy investigation.

Antidumping duties are assigned to goods that are imported in to the United States and sold for less than fair value. Due to the fact that the Department of Commerce has limited resources, they cannot fully investigate each importer or producer of the merchandise at issue. The “separate rate” calculation is therefore necessarily imprecise to some extent. However, the Department still has an obligation to calculate an antidumping duty rate that is reasonably reflective of potential dumping margins, that is a rate that will ensure the goods are sold at fair market value.

The Court will hold unlawful any determination “unsupported by substantial evidence” or “not in accordance with the law.” Supporting a finding with substantial evidence essentially requires the Department of Commerce to make a rational connection between the facts found and the choice made. Here, the Department calculated the separate rate by using a simple average of the rates of the only two fully investigated parties (the mandatory respondents). A de minimis rate was assigned to one of the respondents, and an adverse facts available rate was assigned to the other for failing to cooperate with the investigation. An adverse facts available rate is calculated using facts that are adverse to the interests of that party when selecting among the facts otherwise available. The practical effect of using such an adverse facts available rate is that the uncooperative party is assigned the highest possible rate based upon the record.

To determine whether the Department’s decision was in accordance with law, the Court relies on the two-part Chevron test: 1) whether Congress directly spoke to the precise question at issue by expressing its purpose and intent in the statute; 2) if the first prong is not satisfied, whether the Department’s interpretation amounts to a permissible construction of the statute. Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984).

Analyzing this factual issue posed to be the most challenging aspect of the case in addition to raising interesting trade implications, particularly with regards to United States’ relationship with China (a country that is still considered a non-market economy by the Department of Commerce). The Department, with its limited resources, faced a difficult situation. While their decision to select only two mandatory respondents is permissible under the relevant statute, they are also obligated, statutorily, to calculate rates accurately, fairly, and realistically.

Ultimately, the Court held that the Department of Commerce failed to support their separate rate calculation with substantial evidence. There was no evidence indicating that the prohibitively high separate rate calculation (half of the adverse facts rate assigned to the non-cooperating respondent) was reflective of plaintiff’s commercial activity. Furthermore, the calculated separate rate was exceptionally higher than the rate calculated for the one cooperative respondent.

While balancing these considerations, I was struck by the economic implications of the decision. In particular, I realized the fine line between applying an antidumping duty that prevents the sale of imports for less than fair value and a rate that does not accurately reflect dumping margins. If the rate is too low, domestic industries cannot compete and are shut out of the market. Conversely, if the calculated rate is too high, smaller companies would be swiftly foreclosed from the market, thereby frustrating the theory of comparative advantage, one of the guiding principles promoting international trade.

Although calculating antidumping duty rates can be a technical and fact intensive inquiry, it is an important area of regulation that constantly implicates interesting policy concerns that can have significant affects on international trade.

1 “Separate rate” companies are parties to a non-market economy investigation that establish their de jure and de facto independence from government control, thereby avoiding the (likely) prohibitive adverse facts available rate that applies to companies that cannot establish their governmental independence.

Peter Tringali can be reached at peter.tringali@brooklaw.edu

Watching the Sun Rise in the Far East

Mark Falcon '13
Associate Editor

Whether you are a 1L or 2L, you cannot pass up on the amazing experience that is the China Study Abroad program at BLS. Yes, the flight will be over twenty hours long with, hopefully, a lay over, but think of it this way: hasn’t the school year prevented you from seeing all those bad movies that you really wanted to pay $15 for? The flight is well worth the two week immersion into a completely foreign culture with peers that will grow into close friends.

Usually led by Dean Gerber, students this past summer had the pleasure to be accompanied by statutory interpretation master Professor Solan. The program offers two courses that are worth up to 3 pass/fail credits. Even though the Professors do a good job of recognizing that it is a study abroad program, I would recommend registering for one class to have more time to explore. Besides classes, the program includes paid-for excursions to legal institutions

There are two law related trips that provide students with a good overview of China’s legal system. One outing takes students to visit the Headquarters of the China International Economic and Trade Arbitration Commission (CIETAC). This commission hears international economic and trade disputes through the process of arbitration, the frequency of which has rapidly increased due to China’s entry into the WTO in 2001. At the Headquarters, students participated in a panel-like discussion on the process of arbitration in China.

More impressive, however, was the outing to the Supreme People’s Court (SPC) where a Grand Justice discussed China’s judicial history, structure and civil law system.

In the early 1980s, the Organic Law of the People’s Court formed the judicial system in mainland China. The SPC reviews cases from two distinct Courts: the Courts of Special Jurisdiction, which is comprised of the military, railroad, water transportation, and forestry courts; and the Local People’s Courts, which is a three-tiered system comprised of the basic, intermediary, and high people’s court. The SPC is made up of 13 Justices: one Chief Justice or President of the SPC, one Grand Justice of First Rank or VP, and 11 Grand Justices. Unlike in the U.S., The SPC does not have a ‘cases or controversies’ requirement when reviewing appeals, hearing original jurisdiction cases or adjudicating disputes that have the greatest influence in China.

From this visit, I was most impressed by the development of China’s judicial system within a civil law system. A common law judiciary will turn to precedent to explain gaps or ambiguities in legislative law. Court decisions are interpretations of law which are later relied upon by judges in their process of applying legislative law to novel but similar facts. Contrastingly, in a civil law system, gaps in legislative law are not recognized. The role of the judiciary is to apply the law as intended, not to “interpret” laws as in common law traditions. Decisions are reduced to an application of a clear law rather than an interpretation of a law that supplements the written legislative law. In a civil law system, the concept of stare decisis does not exist. However, the SPC has a novel third responsibility: to give judicial explanations of the specific utilization of laws in the judicial process that must be carried out nationwide. This additional responsibility provides the SPC with the ability to influence legislative law application, similar to the role judicial decisions play in a common law system.

The judicial system in China will continue to strengthen in its process and application of the law.

In 1998, the government began a comprehensive internal shake-up of the judiciary resulting in the punishment or dismissal of over 4,200 judicial branch employees. Along with governmental actions legitimizing the judicial system, it is foreseeable that a growing affluent population will soon demand legal protection of their recently acquired “property” (generally, real property cannot be owned, but rather leased for long terms from the state). These forces provide for a strong judicial system pivotal in supporting China’s continued growth.

All this is great for China. But let’s be honest, students are not going to travel half-way around the world to solely study legal topics.

After classes, students will have time to visit cultural sites, go shopping, and experience a lively nightlife. The most famous sites, such as Tiananmen Square, the Forbidden City, and the Great Wall of China, are just the highlights of the school excursions. To help plan out your trip, I have discussed below some additional must see sites as well as what they famously have to offer.

After visiting Tiananmen Square and the Forbidden City, I would advise staying around the area and hiking up to the top of Jingshan Park. This park was the royal family’s personal playground, and is located across the street from the Forbidden City. At the end of the day, the sun will set behind the picturesque mountain line illuminating the Forbidden City and Beihai Park with its fleeting orange glow. The reflection off Beihai Park’s massive lake along with the cool breeze that hits the top of the Park will surely set the scene for a great moment of reflection.

Among all the beauty that night, just make sure to stick together with your group because it does get dark quickly, and the small paths in the park have limited visibility.

After shopping at the Pearl Market during a school excursion, spend the afternoon exploring the Temple of Heaven Park across the street. Not only does this park include the Temple of Heaven, but groups commonly gather in the impressively pedicured grounds to play board games such as mahjong– a popular pastime in China, play hacky sack with shuttlecocks, and duel their qins – a traditional Chinese string instrument.

During the weekend, take a day trip to LongQing Gorge, which is rumored to have inspired the floating mountains in the film “Avatar.” Here, there are several outdoor activities including riding the longest escalator in China that happens to be encapsulated by a colorful dragon and clinging to the side of the mountain, kayaking, and bungee jumping. Keep in mind that the gorge is about a one and a half hour bus ride from Beijing, so leave very early to avoid long lines and crowds. The sun will set behind the picturesque mountain line illuminating the Forbidden City…with its fleeting orange glow

The program will also include a visit to the Yashow market. Feel free to indulge in this market that has four floors selling popular clothing brands for cheap, and is topped off with a floor solely dedicated to tailors. You cannot and should not leave China without buying a tailored suit or shirt. Although the tailors’ style may be stuck in the 90s, they are very talented and just require detailed, consistent direction. A tailored French-cuff shirt can cost you $15, a two piece suit $150, and a three piece suit around $200, plus or minus 20% depending on your haggling ability. Furthermore, the more you buy, the greater the discounts and additional articles they may throw in to the purchase. Be careful – you may end up leaving with 8 suits!

There are also rumors that the Olympic Park will be closing soon due to the high maintenance costs. The Park includes the bird’s nest, water cube, and the fan. It is a beautiful large area, which lights up after sunset and is a must see while it’s still around.

Make sure to also visit the Hutongs or narrow traditional streets that provide you with a view into historical Beijing. The two most popular Hutongs are the Liulichang Hutong and the Yandai Xiejie Hutong. Liulichang is known for its traditional art stores–here is where you would get your loved ones beautifully personalized jewelry for fractions of the cost. Yandai Xiejie Hutong has more modern stores targeting the younger Beijing generation.

When visiting the latter Hutong, make sure the group you go with is interested in making one more stop. Yandai Xiejie Hutong leads into Houhai Lake, a man-made lake surrounded by bars whose vibrant lights are reflected off the water. As a foreigner, you will be hassled to enter every bar. Do not talk to any sponsor unless you are sure you want to enter their bar or they will follow you around the whole lake until you do. The best bars in this area have outdoor roof seating so you can take in the stunning sights and bustling streets that surround the tranquil lake.

There are two other nightlife locations that are a must. One is an expatriate area called Sanlitun (located in the Chaoyang District) which is next door to the Yashow market mentioned earlier. Sanlitun provides you with the comfort of English speaking bartenders with stunning views of modern Beijing.

Most of the bars in Sanlitun will be comparatively high-end, outdoor roof bars, and filled with foreigners, which for some reason mostly turn out to be Australian. The other must-see nightlife experience is located on the 80th floor in Beijing’s World Trade Center. If the lavish interior décor does not impress you, the views of Beijing will. It may be expensive relative to most of the bars you go to in Beijing, but the fantastic view and ambiance are well worth it. Sadly, it’s still comparable to your average NYC bar prices.

Lastly, your final week in Bejing may coincide with a DJ festival on the Great Wall of China.
This festival is on the grounds of the Great Wall and is an eight hour DJ festival. Most DJs will be of Chinese descent and unknown to the casual electro listener, but the headliner is usually famous - Fat Boy Slim was last summer’s closer. Although the festival might conflict with the last group dinner or may make your race to the airport the next day interesting, to hear the music and light-show play off the Great Wall is an experience that cannot be reduced to words.

All this traveling and site seeing may seem daunting but Beijing has several features that make it all possible. First, the subway fare is 25 U.S. cents to go anywhere. The system is expanding, incredibly clean, on time, and in English. Secondly, a cab’s starting fare is 5 yuan, and goes up in 50 cent increments after the first 2 minutes. Cab fare will never cost you more than $5. Lastly, Beijing is incredibly cheap. Lunch at the school cafeteria is 6 yuan or $1. An average beer, which is a 750ml bottle of Tsingtao costs 15 yuan or $3. Gifts can range from 50 to 200 yuan, or $8 to $30. You will not be spending a lot of money while in Beijing especially if you have any ability to do some haggling.

The only hurdle when traveling in China is the language. Most Chinese people are unable or too shy to speak English. Be prepared to improvise and letting matters just play out. Luckily, the era of smart phones has provided the tourist with a great tool: workable apps that display Chinese characters. Notwithstanding, you’ll find it helpful to learn a few commonly used phrases beforehand, so as to aid you in your travels.

I hope this article minimizes any fear of traveling to a truly foreign country, and encourages you to take a chance to greatly enhance your perspective on one of the fastest rising stars in the international community: China.