Abstract
Until recently, only limited attention is paid to institutional issues in terms of the TPP, with the exception of requirements for entry into force of the TPP and possibility of new members’ accession. However, it is inevitable that membership issues will arise throughout a treaty’s lifecycle. Providing a broader perspective on membership issues that would affect proper decision-making and enforcement of the TPP or its successors is the primary objective of this chapter. Namely, there are systemic concerns that deserve attention during the course of discussions to revive or rewrite the TPP. First, with regard to the ‘late ratification’ issue in the phase the TPP takes effect, imposing an additional burden on a late ratifier regarding membership of the TPP may create incentives for early ratification. However, it may also incentivize early birds for rent-seeking by way of renegotiations or side payments, which will endanger the thin balance that drafters originally reached. Second, with regard to the ‘second ratification’ issue in the phase of amending the TPP, the rationale that requires ratification by all member states for an amendment to take effect is not clear. The current requirement may prevent the TPP’s expedited adjustment to subsequent changes in circumstances. Finally, with regard to the ‘litigation risk of withdrawal’ issue in the phase where a Party withdraws from the TPP, the leaving Party is free from risk of ISDS arbitration if the notification of the withdrawal from the TPP precedes the request for consultation by a foreign investor.
The Jetavana Temple bells ring the passing of all things. Twinned sal trees, white in full flower, declare the great man’s certain fall.
The Tale of the Heike
Royall Tyler (translation; original author unknown in 13–14th Century Japan), The Tale of the Heike (Viking 2012) 1.
This is a preview of subscription content, log in via an institution to check access.
Notes
- 1.
USTR, 2009 Trade Policy Agenda and 2008 Annual Report (2009) 127. https://ustr.gov/about-us/policy-offices/press-office/reports-and-publications/2009/2009-trade-policy-agenda-and-2008-annual-report accessed 9 April 2016.
- 2.
In the end, all of the TPSEP member states signed the TPP as original signatories in February 2016. However, it does not affect effectiveness of the TPP among them.
- 3.
For the official text of the TPP Agreement, see the website of the Ministry of Foreign Affairs and Trade of New Zealand, which is the ‘Depositary’ of the TPP Agreement, https://www.mfat.govt.nz/en/about-us/who-we-are/treaty-making-process/trans-pacific-partnership-tpp/text-of-the-trans-pacific-partnership accessed 9 April 2016.
- 4.
Note that the title of this chapter is not changed from previous version presented in May 2016 at the annual meeting of the Asia WTO Research Network (AWRN) held in Hong Kong.
- 5.
In contrast with other membership issues typically included in regional FTAs, there are no specific provisions in the TPP to address termination of the entire agreement. However, the TPP will cease to function if all but one Party withdraw, and will be terminated, de facto, if all Parties withdraw.
- 6.
GG Fitzmaurice, ‘Do Treaties Need Ratification?’ (1934) 15 British Year Book of International Law 113.
- 7.
IMF website https://www.imf.org/external/pubs/ft/weo/2015/02/weodata/index.aspx accessed 9 April 2016.
- 8.
Note that the letter from the USTR to the TPP Depositary on January 30, 2017 of its intention not to become a Party to the TPP would not change the legal status of the US as an original signatory to the TPP. According to Article 30.6 (Withdrawal) of the TPP as is shown in Section IV.1 below, any ‘Party’ may withdraw from this Agreement by providing written notice of withdrawal to the TPP Depositary. However, according to Article 1.3 (Definitions), ‘Party’ means a state or a separate customs territory for which the TPP is ‘in force.’ Lacking the ratification by the US, Article 30.6 is not applicable because the TPP is never in force for the US and the US is not a Party who can withdraw from the TPP. Although the US could have cancelled its signature to the TPP, it did not do so in the aforementioned letter. Therefore, the US remains as an original signatory to the TPP. Nevertheless, with that notification, the US is free from the obligation not to defeat the object and purpose of the TPP, in accordance with Article 18(a) of the Vienna Convention on the Law of Treaties.
- 9.
Article 7 of Chapter 18 of the AANZFTA; see also, Article 19 of the Treaty Establishing a Common Market between the Argentine Republic, the Federal Republic of Brazil, the Republic of Paraguay and the Eastern Republic of Uruguay (Treaty of Asunción establishing MERCOSUR) http://www.sice.oas.org/Trade/MRCSR/MRCSRTOC.ASP accessed 9 April 2016; see also Article 41 of the Treaty of the Southern African Development Community (SADC) http://www.sadc.int/documents-publications/sadc-treaty/ accessed 9 April 2016.
- 10.
See Article 30.5(2) and 30.5(3) of the TPP.
- 11.
Note that Website of the Ministry of Foreign Affairs and Trade of New Zealand, ‘Depositary of the TPP Agreement’, https://www.mfat.govt.nz/en/about-us/who-we-are/treaty-making-process/trans-pacific-partnership-tpp/text-of-the-trans-pacific-partnership accessed 9 April 2016, Article 27.3 clarifies that ‘any such decision on alternative decision-making by the Parties shall itself be taken by consensus.’
- 12.
See, e.g., Secretary of State for Foreign and Commonwealth Affairs of the United Kingdom, The Process for Withdrawing from the European Union, Cm9216 (February 2016), p. 14 [paras. 3.6–3.7] https://www.gov.uk/government/publications/the-process-for-withdrawing-from-the-european-union accessed 26 April 2016.
- 13.
Australia, Brunei, Malaysia, New Zealand, Singapore and Vietnam.
- 14.
Article 7(3), Chapter 18 of the AANZFTA.
- 15.
According to Article 30.2, it is the ‘Parties’ that can amend the TPP text. Therefore, as is shown in Section II.1 above, there are no ‘Parties’ to the TPP if the US fails to ratify it, which prevents other 11 original signatories to modify texts of the TPP including the requirements for its entry into force.
- 16.
See II.1 above. [K: Requires full references].
- 17.
Article 20.7(2) of the TPSEP.
- 18.
Article 24.2(2) of the Free Trade Agreement between the United States and Chile.
- 19.
Article 2202(2) of the NAFTA.
- 20.
Article 7 of Chapter 17 of the Singapore-Australia FTA http://dfat.gov.au/trade/agreements/safta/Pages/singapore-australia-fta.aspx#documents accessed 9 April 2016.
- 21.
Hoyt 1959, 80–81.
- 22.
Ibid., at 246.
- 23.
See para 3 of Article X of the Marrakesh Agreement Establishing the World Trade Organization.
- 24.
For the sake of comparison, amendments to the Charter of the United Nations (UN) applies to all members if they have been ratified by two-thirds of the members, including the five permanent members of the Security Council. See Article 108 of the UN Charter.
- 25.
Article 48(4) of the Treaty on European Union, OJ C 326, 26.10.2012.
- 26.
Article 48(5) of the Treaty on European Union, OJ C 326, 26.10.2012.
- 27.
Article 36(1) of the SADC Treaty.
- 28.
Article 32 of the Agreement Amending the Treaty of the Southern African Development Community (2001); Article 7 of the Agreement Amending the Treaty of the Southern African Development Community [amending Article 22] (2007); Article 8 of the Agreement Amending the Treaty of the Southern African Development Community (2008); Article 3 of the Agreement Amending the Treaty of the Southern African Development Community [amending Articles 10A] of the Treaty (2009); Article 4 of the Agreement Amending the Treaty of the Southern African Development Community [amending Articles 10 and 14] (2009).
- 29.
Again, note some of the bilateral FTAs concluded by the TPP original signatories do not require second ratification. See n [K: Requires full references].
- 30.
It is another question how an amendment to the text applies to acceding parties to the TPP later in time. In cases of accession, Parties usually specify relevant conditions in the accession protocol.
- 31.
Needless to say, accession of a Party and the second ratification of an amendment are completely different in context; however, under the TPP, unanimous ratification is required for both situations. In this sense, they share the same problem in terms of the scope in personam of the treaty rights and obligations.
- 32.
It is not clear in the text if the Commission has the power to set a specific time limit on the part of existing Parties for their ratification of the agreed amendment, but this uncertainty about the power of the Commission can be avoided by setting a time limit on the existing Parties to decide whether or not to approve it as part of the substantive text of the proposed amendment. S Yee, ‘The Time Limit for the Ratification of Proposed Amendments to the Constitutions of International Organizations’ (2000) 4 Max Planck Yearbook of United Nations Law 203.
- 33.
This also prevents the effectuation of the treaty rights and obligations vis-a-vis the acceding country and other Parties that have ratified the accession protocol. In contrast, Article 23.1(2) of the bilateral US-Australia FTA allows accession to take effect between the acceding country and either of the two original member states that ratified the accession protocol.
- 34.
Several countries withdrew from the General Agreement on Tariffs and Trade (GATT) within a few years after its provisional application Provisional application . See HW Cho, ‘Legal Eligibility of Taiwan’s Accession to GATT/WTO’ (2000) 3 Maryland Series in Contemporary Asian Studies 4.
- 35.
MS Jank and MQM Jales, ‘On Product-, Box-, and Blame-Shifting: Negotiating Frameworks for Agriculture in the WTO Doha Round’ in William Alexander Kerr and James D Gaisford (eds) Trade Negotiations in Agriculture: A Future Common Agenda for Brazil and Canada? (University of Calgary Press 2006) 74 (Footnote 2). See also discussions regarding the so-called ‘Brexit’ problem.
- 36.
See e.g., Article 2205 of the NAFTA; Article 20-07(1) of Mexico-Chile FTA; Article 23.5(3) of Chile-Australia FTA; and Article 23.4(2) of the US-Australia FTA.
- 37.
In contrast, FTAs concluded by Japan tend to require a period of one year before the withdrawal takes place. Those arrangements are supposed to serve to improve predictability for transition. Recent examples are Article 17.5 of Mongolia-Japan FTA; Article 147 of Japan-India FTA; Article 224 of Peru-Japan FTA; Article 154 of Switzerland-Japan FTA; Article 129 of Vietnam-Japan FTA; and Article 173 of Thai-Japan FTA. See T Kobayashi, ‘Running Many FTAs is Like Balancing between Many Bicycles: A Multidimensional Comparison of Institutional Provisions in Japan’s FTAs’ in Shotaro Hamamoto and others (eds) L’être Situé, Effectiveness and Purposes of International Law: Essays in Honour of Professor Ryuichi Ida (Brill, 2015) 141. A similar provision appears in Article 57(1) of the Convention Establishing the European Free Trade Association (EFTA).
- 38.
There are inconsistent practices in date counting; for example, the AANZFTA sets forth that it enters into force ‘60 days after […] the notification’ of the ratification. In the case of entry of Thailand, Laos and Cambodia, the parties included the date of the notification of ratification while counting the waiting period. See A de Jonge, ‘Australia’ in Wenhua Shan (ed), The Legal Protection of Foreign Investment: A Comparative Study (Hart Publishing, 2012) 140.
- 39.
Mahathir Mohamad, ‘TPPA’ (Dr. Mahathir Mohamad: Blogging to Unblock, 31 December 2015) http://chedet.cc/?p=1949 accessed 9 April 2016.
- 40.
Mahathir Mohamad, ‘TPPA’ (Dr. Mahathir Mohamad: Blogging to Unblock, 31 December 2015) http://chedet.cc/?p=1949 accessed 9 April 2016.
- 41.
Bernama, ‘MITI: Withdrawal from TPP will not bankrupt Malaysia’ New Strait Times (Singapore, 2016) http://www.nst.com.my/news/2016/01/120466/miti-withdrawal-tpp-will-not-bankrupt-malaysia accessed 9 April 2016.
- 42.
See footnote 41.
- 43.
Bernama, ‘M’sia can still exit TPPA if found to have more disadvantages than benefits’ New Strait Times (Singapore, 2016) http://www.nst.com.my/news/2016/03/135606/msia-can-still-exit-tppa-if-found-have-more-disadvantages-benefits accessed 9 April 2016.
- 44.
As another procedural requirement, ‘[a]t least 90 days before submitting any claim to arbitration under this Section, the claimant shall deliver to the respondent a written notice of its intention to submit a claim to arbitration (notice of intent)’ in accordance with Article 9.19(3).
- 45.
See, e.g., Articles 1120 of the NAFTA; Article 96(4) of Japan-India FTA; Article 94(3) of Switzerland-Japan FTA; Article 11.16(3) of the US-Korea FTA (KORUS).
- 46.
Australia, Canada, Mexico and New Zealand are not exempted from claims by foreign investors under certain conditions set out in Annex 9-H of the TPP, in accordance with footnote 31 to Article 9.19(1)(a)(i)(B).
- 47.
See Article 11.17 and 11.18 of the KORUS FTA.
- 48.
Paragraphs 1 and 2 of Article 9.20 (emphases added).
- 49.
World Bank website https://icsid.worldbank.org/apps/ICSIDWEB/icsiddocs/Pages/ICSID-Convention.aspx accessed 9 April 2016.
- 50.
Whether a claimant may argue for earlier submission of complaint by reason of futility or other equitable reliefs will be the subject of separate research.
- 51.
A claimant must deliver a written request for consultation in order to commence the consultation phase, in accordance with Article 9.18(2). In addition, it can file a claim to arbitration if the dispute has not been resolved within six months of receipt by the respondent of a written request for consultation, as set forth in Article 9.19(1). Thus, the date of the receipt by the respondent matters more than the date the request was sent.
- 52.
Even if the consultation period within six months included Day 0, the respondent Party can easily delay the receiving date by notifying their intention to withdraw to the Depository after business hours. For the purpose of the notification of withdrawal, merely providing written notice of withdrawal to the Depositary is required. Thus, notification through any diplomatic channel will suffice, regardless of business hours. On the other hand, close of business can be an excuse to reject the receipt of the request for consultation filed by a foreign investor. By doing so, the responding Party can ‘buy’ one additional day.
- 53.
Needless to say, it would be rather rare for a country to calculate that the total economic loss from ISDS arbitration would exceed the aggregate benefits to remain in the TPP.
- 54.
Articles 1120 and 2205 of the NAFTA; again, this would not become a real concern if each of the NAFTA member states considered the membership as compelling.
- 55.
See recent Japanese FTAs and the EFTA shown in n 38 above.
- 56.
Article 10.20 of Mongolia-Japan FTA has an identical provision (emphasis added).
- 57.
Article 23.4(3) of the US-Australia FTA; Article 2.9(3) of the US-Singapore FTA.
- 58.
See e.g., the letters exchanged between Ambassador Michael B.G. Froman of the USTR and Mr. Shuichi Takatori, State Minister of the Cabinet Office of Japan, on 4 February 2016, which state that ‘[t]his understanding is without prejudice to the outcome of the processes initiated by Japan and the United States’ but still ‘this understanding, shall constitute an agreement between our two Governments, which shall enter into force on the date of your letter in reply.’
- 59.
See e.g., the letters exchanged between Ambassador Froman and Mr. Takatori on 4 February 2016, which include statements such as ‘Japan and the United States confirm that each government will maintain at least the current level of consistency with Article 3 (Procedural Fairness) of Annex 26-A (Transparency and Procedural Fairness for Pharmaceutical Products and Medical Devices)’. See also, letters exchanged between the Honourable Chrystia Freeland, Minister of International Trade, Canada, and Mr. Takatori on 4 February 2016, which include statements such as ‘[a]t the time of signature of this letter, the Government of Japan recognizes that the indications listed in Part A of the Annex to this letter (hereinafter referred to as “the Annex”) are protected geographical indications in Canada.’
- 60.
Another longstanding issue of debate is the blurring distinction between formal treaties and executive agreements. See J Yoo, ‘Rational Treaties: Article II, Congressional-Executive Agreements, and International Bargaining’ (2011) 97 Cornell L Rev 1.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2017 Springer Nature Singapore Pte Ltd.
About this chapter
Cite this chapter
Kobayashi, T. (2017). Memento Mori: Membership Issues Surrounding Entry into, Modification of, and Withdrawal from the TPP. In: Chaisse, J., Gao, H., Lo, Cf. (eds) Paradigm Shift in International Economic Law Rule-Making. ODS 2017. Economics, Law, and Institutions in Asia Pacific. Springer, Singapore. https://doi.org/10.1007/978-981-10-6731-0_26
Download citation
DOI: https://doi.org/10.1007/978-981-10-6731-0_26
Published:
Publisher Name: Springer, Singapore
Print ISBN: 978-981-10-6730-3
Online ISBN: 978-981-10-6731-0
eBook Packages: Law and CriminologyLaw and Criminology (R0)