Trading in lawsuits

trading pays... lawyers! 

Alan Beattie writes on the Financial Times about how lawsuits are coming to dictate the terms of trade [via Patrick]

Some years ago, American catfish farmers got cross when cheap Vietnamese catfish started flooding the US market. Their expensive lawyers forced the Vietnamese to stop calling their catfish catfish, on the grounds it was a different family to, though in the same Siluriformes order as, American catfish. The Vietnamese relabelled their exports as basa or tra (meaning, in Vietnamese, “catfish”). Sales continued to thrive.

Undeterred, the US catfish farmers’ lawyers changed their strategy, successfully securing import duties on Vietnamese catfish on the grounds that they were being “dumped”, or sold at unfairly low prices, in the American catfish market. To do so, they needed to prove that Vietnamese catfish were a “like product” to American catfish, having previously spent many thousands of dollars in fees to establish that Vietnamese catfish were not, in fact, catfish.

As far as their critics are concerned, that tells you pretty much all you need to know about what happens when trade lawyers get out of control. As the so-called Doha round of World Trade Organisation global trade talks sputters, more and more of the work of trade relations has shifted away from negotiation and towards litigation and arbitration. To its defenders, this trend represents rule and reason constraining power politics. To its critics, it means runaway jurists subverting democracy.

Read the full article here.


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