Alan O. Sykes

New York University | NYU

The "non-violation" clause of GATT is Exhibit A for the proposition that international trade agreements are incomplete contracts. According to the terms-of-trade theory of trade agreements, it underpins the success of the GATT/WTO's "shallow integration" approach. Yet the observed role of the non-violation complaint is minimal. We develop a model o...

This paper provides limited comments on portions of the Appellate Body (AB) judgment. With respect to the existence of a subsidy under contracts with NASA and DOD, we find the discussion of whether Boeing has received a financial contribution to be a distraction from the core issue – whether the mix of monetary compensation, access to government pe...

International organizations use a bewildering variety of voting rules — with different thresholds, weighting systems, veto points, and other rules that distribute influence unequally among participants. We provide a brief survey of the major voting systems, and show that all are controversial and unsatisfactory in various ways. While it is tempting...

This essay, forthcoming in the NYU Journal of International Law and Politics, is adapted from the inaugural Robert A. Kindler Professorship of Law lecture at NYU School of Law. It develops an economic perspective on the utility of international law, identifying the reasons why international law is sometimes successful at orchestrating international...

The World Trade Organization (WTO) Agreement covers international commerce in goods and services including measures that directly affect trade, such as import tariffs and quotas, and almost any type of internal measure with an impact on trade. Legal and Economic Principles of World Trade Law contributes to the analysis of the texts of World Trade L...

This book provides a thorough treatment of the legal, economic, and policy issues associated with safeguard measures in the WTO system. It includes a careful treatment of the history of safeguard measures under GATT, and the impetus for the Agreement on Safeguards during the Uruguay Round. It reviews the economic arguments for and against safeguard...

The “non-violation” clause was a major focus of the drafters of GATT in 1947, and its relevance was revisited and reaffirmed with the creation of the WTO in 1995. And according to the terms-of-trade theory of trade agreements, it has an important role to play in facilitating the success of the "“shallow integration" ”approach that the GATT/WTO has...

In stark contrast to areas such as trade and investment, international cooperation on migration is scant. The lack of cooperation is puzzling given the important international externalities associated with national immigration policies. This paper identifies the relevant externalities, and suggests why cooperation is nevertheless difficult to achie...

The macroeconomic policies of states can produce significant costs and benefits for other states, yet international macroeconomic cooperation has been one of the weakest areas of international law. We ask why states have had such trouble cooperating over macroeconomic issues, when they have been relatively successful at cooperation over other econo...

The ‘non-violation nullification or impairment’ doctrine is among the more unique and perplexing features of WTO law. We examine the scope and application of the non-violation doctrine in the GATT/WTO. Observed cases raising non-violation claims are relatively uncommon, the non-violation claims that are observed are usually not adjudicated, and tho...

Litigation against corporate defendants under the Alien Tort Statute is largely an effort to enlist multinational business interests in a laudable effort to reign in the human rights abuses of repressive regimes. The hard question is whether the costs of this now extensive litigation (and related litigation under state tort law) are worth the benef...

In much of the scholarly literature on international law, there is a tendency to condemn violations of the law and to leave it at that. If all violations of international law were indeed undesirable, this tendency would be unobjectionable. We argue in this paper, however, that a variety of circumstances arise under which violations of international...

The Upland Cotton case raises a range of interesting issues regarding the rationale for retaliation in the WTO system and the proper approach to its calibration. These include: Should the approach to retaliation differ in cases involving prohibited or actionable subsidies? When should cross-retaliation be allowed? Should retaliation be based only o...

Existing formal models of the relationship between trade policy and regulatory policy suggest the potential for a regulatory race to the bottom. World Trade Organization (WTO) rules and disputes, however, center on complaints about excessively stringent regulations. This paper bridges the gap between the existing formal literature and the actual pa...

The United Nations Convention on the Law of the Sea demonstrates plausible economic logic by assigning jurisdiction over portions of the ocean to the states that value them the most and can regulate them most cheaply, while respecting other states’ interests in navigation and additional uses of the seas. For the vast oceanic areas that no state can...

The United Nations Convention on the Law of the Sea has a plausible economic logic. Jurisdiction over portions of the ocean is assigned to states which can regulate them most cheaply and value them the most. These jurisdictional rights are subject to limits that reflect the interests of other states in navigation and other uses of the seas. For the...

Various commentators have suggested that the current system of trade sanctions for violation of WTO obligations be replaced with financial compensation. The details of these proposals vary, but one option is to allow firms injured by violations to recover damages. This paper questions the wisdom of such proposals, and argues that the current system...

“Subsidization” by member governments occurs in the U.S. federal system, the WTO, and the European Union. These three legal systems have responded very differently to the issues raised by subsidies, from the largely laissez-faire approach of the United States to the elaborate “state aid” rules of the EU to the intricate but weakly enforced rules of...

Central bank intervention in foreign exchange markets may, under some conditions, stimulate exports and retard imports. In the past few years, this issue has moved to center stage because of the foreign exchange policies of China. China has regularly intervened to prevent the RMB from appreciating relative to other currencies, and over the same per...

In this paper, we consider a three-stage game in the context of a competing exporters model to compare and contrast the effects of discriminatory and uniform (Most Favored Nation, MFN) tariffs on countries' choice over environmental standards for varying degrees of pollution spillovers. Because of the presence of punishment effects and stronger own...

Plaintiffs regularly bring cases in U.S. courts seeking damages for harms that have occurred abroad, attracted by higher expected returns than are available in the jurisdiction in which the harm arose. This paper focuses on the potential distortion of trade and investment patterns that can result from implicit discrimination in the applicability of...

This paper addresses the issues that came before the Appellate Body in the Softwood V dispute, concerning an affirmative antidumping determination by the US Department of Commerce. The paper addresses both the original Appellate Body opinion in the dispute, and the later opinion reviewing the compliance panel findings. We focus primarily on the iss...

This book is part of a wider project that aims to propose a model GATT that makes good economic sense without undoing its current basic structure. It asks: What does the historical record indicate about the aims and objectives of the framers of the GATT? To what extent does the historical record provide support for one or more of the economic ratio...

This chapter reviews and synthesizes the work of economists and law and economics scholars in the field of public international law. The bulk of that work has been in the area of international trade, but many of the ideas in the trade literature have implications for other subfields. Recent years have seen a significant increase in research on othe...

In this paper, we consider a three-stage game in the context of a competing exporters model to compare and contrast the effects of discriminatory and uniform (Most Favored Nation, MFN) tariffs on countries' choice over environmental standards for varying degrees of pollution spillovers. Because of the presence of punishment effects and stronger own...

The international law of state responsibility determines when states are liable for international law violations. States are generally liable when they have control over the actions of wrongdoers; thus, the actions of state officials can implicate state responsibility whereas the acts of private citizens usually do not. We argue that the rules of s...

The Appellate Body decision in the steel dispute is the latest in a line of unsatisfactory decisions in the safeguards area. The problem stems from the fact that the treaty text regarding the preconditions for the use of safeguard measures is badly deficient. The Appellate Body with its usual emphasis on textualism has done little to resolve the pu...

Judge Richard Posner's opinion in Indiana Harbor Belt Railroad Co. v. American Cyanamid Co. offers an economic interpretation of Restatement (Second) of Torts Section 520, which imposes strict liability on actors who conduct abnormally dangerous activities. This paper, which was prepared for a University of Chicago Law Review Symposium in honor of...

Tort plaintiffs regularly bring cases in U.S. courts seeking damages for harms that have occurred abroad, attracted by higher expected returns than are available in the jurisdiction where the harm arose. Such claims are especially likely to be filed by plaintiffs from developing countries, who commonly argue that the remedies available to them in t...

This edited volume features chapters from leading legal thinkers outlining the current state and future direction of international economic law. It provides an up to date and comprehensive tour of legal issues in international economic law, addressing trade, commercial law, tax, competition law, investment, finance, intellectual property, telecommu...

The "parallel behavior is enough" standard cannot assist the courts in distinguishing horizontal agreements to restrain trade from normal competition. It would very likely impose significant costs on the economy by distorting competitive incentives and encouraging meritless litigation designed mainly to induce financial settlements.

This paper addresses the dispute brought to the World Trade Organization (WTO) by India concerning antidumping duties imposed by the European Communities (EC) on cotton-type bed linen. An earlier complaint brought by India challenged the antidumping duties on a number of points, including the EC practice of zeroing for the computation of dumping ma...

Since the inception of the WTO, safeguard measures have regularly been the subject of dispute settlement proceedings. The latest in this chain of disputes concerns the definitive safeguard measures imposed by the United States on a wide range of steel products in 2002. The safeguards investigation of steel imports was initiated under the US law by...

This paper addresses the compliance dispute brought by India alleging lack of compliance by the European Communities with an earlier WTO ruling on anti-dumping duties for cotton-type bed linen. India raised some issues relating to the EC treatment of "other factors" in the conduct of its injury analysis that India had briefly noted in the original...

This paper develops a theory of the rules regarding standing and remedy in international trade and investment agreements. Regarding investment agreements, the paper argues that a credible government-to-firm commitment (or signal) that the capital importer will not engage in expropriation or related practices is required and that a private right of...

This paper is a preliminary draft of a chapter for eventual inclusion in the Handbook of International Economic Law, edited by Andrew T. Guzman and Alan O. Sykes, forthcoming from Edward Elgar Publishing. The chapter is a survey of the law and economics of trade remedy laws, including safeguard actions, antidumping law, and countervailing duty law....

This book, published in 2005, is the second annual report of the American Law Institute (ALI) project on World Trade Organization Law. The project undertakes yearly analysis of the case law from the adjudicating bodies of the WTO. The Reporters' Studies for 2002 cover a wide range of WTO law ranging from classic trade in goods issues to intellectua...

The laws of war forbid states to use force against each other except in self-defense or with the authorization of the United Nations Security Council. Self-defense is usually understood to mean self-defense against an imminent threat. We model the decisions of states to use force against "rogue" states and argue that under certain conditions, it ma...

The Generalized System of Preferences (GSP), authorized by the 1979 Enabling Clause under GATT, allows importing nations to extend preferential tariff treatment to the products of developing countries. India recently brought a successful WTO complaint challenging aspects of the EC preference scheme, claiming that it impermissibly discriminated amon...

Subsidies present thorny problems for the international trading system. The legitimate activities of governments inevitably affect the economic position of firms within their jurisdictions, yet the perception sometimes arises that government programs confer an unacceptable advantage on those firms. The controversial task of determining which sorts...

This paper addresses the dispute brought to the World Trade Organization (WTO) by Argentina concerning certain Chilean measures affecting the importation of wheat, wheat flour, oil seeds, edible vegetable oils and sugar. The complaint by Argentina challenged two types of policies a price band system that was applicable to four of those product cate...

This paper is a preliminary draft for eventual inclusion in the Handbook of Law and Economics, A. Mitchell Polinsky & Steven Shavell editors. It reviews and synthesizes the work of economists and law and economics scholars in the field of public international law. The bulk of that work has been in the area of international trade, but many of the id...

The laws of war forbid states to use force against each other except in self-defense or with the authorization of the United Nations Security Council. Self-defense is usually understood to mean self-defense against an imminent threat. We model the decision of states to use force against "rogue" states, and argue that under certain conditions it may...

I thank Professor Jones for his thoughtful commentary on my paper regarding the safeguards mess in the November 2003 issue of this Review. I disagree with him on some key points, however, and believe that he has misread my position on others. Accordingly, I am grateful to the editors of the World Trade Review for this opportunity to offer a brief r...

The creation of the WTO revived the use of safeguard measures to protect troubled industries against surges in import competition. Many of these measures have now been challenged in the WTO dispute resolution process, and in each case the process has found the challenged measure to be a violation of WTO law. This paper examines the WTO rules on saf...

The recent WTO dispute between the United States and eight complainant nations over protective measures for the steel industry brought widespread attention to a little known area of WTO law -- the rules governing 'safeguard measures', the temporary protection of troubled industries against import surges. The use of safeguard measures is normatively...

Opponents of globalization in general and of the World Trade Organization in particular often contend that a tension exists between the growth of open markets and various conceptions of "human rights." This paper takes issue with such claims. Both theory and the available empirical evidence suggest that the growth of the trading system generally te...

This paper evaluates the WTO rules relating to subsidies and countervailing measures from a welfare economics perspective. It concludes that the rules relating to "nonviolation" subsidies, export subsidies and certain agricultural subsidies have sound economic justification. The rules governing domestic subsidies generally, by contrast, do little t...

Since September 11, 2001, insurance markets have been struggling to adjust to new information about the magnitude of risks posed by terrorism, and to the loss of tens of billions of dollars in reserves because of claims relating to the September 11 attacks. Insurance coverage for terror-related losses has become more expensive and for some risks di...

Public dissatisfaction with managed care has produced a number of legal initiatives that would increase the overall level of public regulation of managed care organizations. Among other things, these initiatives would limit the scope of remedial preemption under ERISA, expand the doctrines of vicarious liability and implied agency, adopt a general...

The WTO ministerial meeting in Doha produced a declaration that will encourage developing nations to use compulsory licensing and parallel importation to reduce the prices of patented pharmaceuticals in their markets. This paper questions the soundness of such policies. Developing nations have long had little intellectual property protection for ph...

The treaty creating the WTO replaced the GATT dispute resolution system, which contained no formal sanctions for breach of agreement as a practical matter, with a system that results in centrally authorized sanctions against recalcitrant violators of WTO trade agreements. We examine the important features of the new system, and argue that the insti...

Standard rational choice analysis explains many but not all aspects of the highly political process of international legalization. Because law engages and affects not only the interests of actors but also their normative values, the development and operation of legal regimes can be understood only by considering both motivations together. We develo...

Public dissatisfaction with managed care has produced a number of legal initiatives that would increase the regulation of managed care organizations. Among other things, these initiatives would limit the scope of remedial preemption under the Employee Retirement and Income Security Act (ERISA), expand the doctrines of vicarious liability and implie...

When tort judgments exceed the assets of tortfeasors and the tort victim has first-party insurance for a portion of the loss suffered, the question arises as to how the recovery from the tortfeasor should be divided between the tort victim on the one hand and the insurer via its rights of subrogation on the other. A common view among the courts and...

This paper challenges the conventional wisdom that the dormant commerce clause requires invalidation of most state regulation of the Internet. The paper argues that conventional wisdom is flawed in three respects: it rests on an impoverished understanding of the architecture of the Internet; it misreads dormant commerce clause jurisprudence; and it...

The debate over 'competition versus harmonization' in regulatory policy often confuses the pertinent alternatives. This comment argues that neither pure regulatory competition nor complete regulatory harmonization is desirable or feasible where important international cross-border effects of regulation arise. Instead, a considerable degree of coope...

A wide array of policy instruments can protect domestic firms against foreign competition. Regulatory measures that raise the costs of foreign firms relative to domestic firms are exceptionally wasteful protectionist devices, however, with deadweight costs that can greatly exceed those of traditional protectionist instruments such as tariffs and qu...

Government contracts are subject to a number of legal rules that have no private sector analogs, and that have received virtually no attention from law and economics scholars. This paper explores these rules from an economic perspective, with special attention to the leading modern case on the subject, United States v. Winstar. The analysis emphasi...

With the conclusion of the Uruguay Round and its agreements relating to technical barriers, much attention has been devoted to the possibility of harmonizing international regulatory policies to reduce the impediments to commerce that result from regulatory heterogeneity. This paper argues that, as a normative matter, harmonization is inferior to a...

Capital structure affects the bargaining position of a firm in the settlement of civil litigation when the civil judgment may cause the firm to become insolvent. We analyze this pretrial bargaining game under different bankruptcy priority rules. A leveraged capital structure can benefit the firm’s shareholders for two reasons. Most obviously, if th...

The essays in this 1998 collection use interdisciplinary perspectives to investigate issues in international and comparative law, primarily employing theoretical or empirical economics. They demonstrate that the economic analysis of law has much to contribute to the study of international matters, despite the fact that mainstream international lega...

Insurers may at times exploit the delay inherent in the civil litigation process to induce needy insureds to settle for less than the amount that the contract promises. The prospect of extracontractual remedies for such "bad faith" at the end of the litigation process can make these tactics unprofitable and thus serve a potentially valuable functio...

Corporate criminal liability is a relatively new development in American law, although it has been expanding rapidly. We argue that there is no need for corporate criminal liability in a legal system with appropriate civil remedies and that corporate criminal liability in practice produces serious problems of overdeterrence. Copyright 1996 by the U...

Like all bodies of law, the public international law of trade and investment requires an enforcement mechanism. The choices to be made in designing such a mechanism are many. Parties to trade and investment agreements must decide whether to create an adjudicative body to hear complaints about alleged breach of obligations, or to rely on informal di...

The WTO dispute settlement system represents a major achievement of the Uruguay Round. By most accounts, this system has worked very well. In the ongoing DSU review, WTO Members are considering proposals that might lead to further improvements in the functioning of the dispute settlement system. Many of these proposals concern different kinds of re...

This chapter reviews and synthesizes the work of economists and law and economics scholars in the field of public international law. The bulk of that work has been in the area of international trade, but many of the ideas in the trade literature have implications for other subfields. Recent years have seen a significant increase in research on othe...