3 October 2018   Leave a comment

The International Court of Justice (ICJ) has ruled against some of the sanctions the US re-imposed on Iran after the US left the Joint Comprehensive Plan of Action (JCPOA–commonly referred to as the Iranian Nuclear Agreement).  Specifically, the ICJ ruled that the re- imposition of sanctions on certain goods violated the 1955 Treaty of Amity, Economic Relations, and Consular Rights between Iran and the US which gives the ICJ jurisdiction over legal disputes between the two states.  The Court ruling is straightforward:

”  THE COURT,

Indicates the following provisional measures:

(1) Unanimously, The United States of America, in accordance with its obligations under the 1955 Treaty of Amity, Economic Relations, and Consular Rights, shall remove, by means of its choosing, any impediments arising from the measures announced on 8 May 2018 to the free exportation to the territory of the Islamic Republic of Iran of

      (i) medicines and medical devices;

      (ii) foodstuffs and agricultural commodities; and

      (iii) spare parts, equipment and associated services (including warranty, maintenance, repair services and inspections) necessary for the safety of civil aviation;

(2) Unanimously, The United States of America shall ensure that licences and necessary authorizations are granted and that payments and other transfers of funds are not subject to any restriction in so far as they relate to the goods and services referred to in point (1);

(3) Unanimously, Both Parties shall refrain from any action which might aggravate or extend the dispute before the Court or make it more difficult to resolve.

There is no likelihood whatsoever that the US will obey this ruling as the ICJ has no enforcement powers.  Indeed, immediately after the ruling the US pulled out of the 1955 Treaty. 

Jen Kirby has written a very succinct piece for Vox  on how the trade agreement among the US, Mexico, and Canada–once known as as NAFTA–has changed.  Many of these changes are largely symbolic, but there are some important provisions that benefit certain economic sectors.  The Washington Post summarizes the changes:

“A handful of major industries scored big wins in President Trump’s North American trade agreement — at times at the expense of ordinary consumers in the United States, Canada and Mexico.

“The winners include oil companies, technology firms and retailers, but chief among them are pharmaceutical companies, which gained guarantees against competition from cheaper generic drugs.”

It seems as if the new trade deal does not change much in terms of trade, i.e., lowering tariffs or quotas or the other types of constraints on the movement of goods and services.  Instead, it seems to focus more on how labor and capital are treated across borders.  In a sense, it seems more like a cartel agreement designed to control competition more than a trade agreement to facilitate movements across borders. 

Posted October 3, 2018 by vferraro1971 in World Politics

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