Uneven Agreement

The feasibility of using offsets in the future has been significantly compromised by the long-awaited Trans-Pacific Partnership (TPP), footnote 73, an economic integration agreement on trade and investment recently concluded between twelve Pacific countries: the United States, Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Under its current membership (even without China and Korea), the TPP is Asia`s largest agreement including government procurement obligations. Given that China, Korea and other countries could eventually join the TPP, the economic size of this agreement means that it will play a key role in setting procurement standards for trade agreements in Asia. Footnote 74 The TPP chapter on government procurement defines offsets in almost identical language to that of the revised GPA. Footnote 75 The most important thing is that the TPP follows the example of the GPA by prohibiting the imposition by a party of compensation for covered purchases. Footnote 76 The TPP also grants a waiver to developing countries, subject to a termination obligation. Footnote 77 The procurement chapter of the TPP contains its own wto-style general exceptions, themselves identical to those of the revised GPA, note 78, as well as a self-condemning national security provision, footnote 79, both of which could lead to facilitating compensation in certain circumstances. Interestingly, the TPP also allows parties to take temporary measures to address serious balance of payments or external financial difficulties,footnote 80 a provision that is missing from the revised GPA. Such circumstances could justify benefits to markets, provided that they are taxed on a most-favoured-nation basis and are not more burdensome than necessary.

Given that offsets in the TPP (as elsewhere) are partly defined as measures to ”improve the balances of payments of a contracting party”, they seem to invite the use of this derogation as a possible justification. The limitation in time of the balance of payments exception would do little to help to control the compensation linked to certain lucrative tenders. Further indications as to the nature of the compensation, which would fall within the balance of payments exception, may finally be disclosed by the case-law. The EU also supports the World Trade Organisation (TF) Trade Facilitation Agreement concluded last year in Bali, Indonesia. Trade facilitation focuses on reducing trade costs by minimizing the rules and procedures necessary for international traffic in goods and services. The Bali Tf Agreement – an offsteps of the unsuccessful 2001 Doha Round – calls on countries to put in place swift and efficient customs procedures. In search of regulations that give legal effect to ”unequal treaties”, the author reiterates that States are free to conclude and determine the content of the agreement. Caflisch recalls that there is no norm imposing the need for equal duties and that inequality does not necessarily mean that a treaty is null and void or countervailable (except in situations resulting from physical or military force). In 1895, Japan won the First Sino-Japanese War.