US election: President Trump heightens business and trade uncertainty

Ruth Green

As the world’s economic powers and international businesses take stock of the US presidential election result, the Trump Administration looks likely to have a major impact on key areas such as immigration and trade, should his campaign rhetoric transfer into US government policy.

Immigration, not least the repeated references to building a wall on the US-Mexican border to curb illegal immigrants, is one issue that dominated the election. The President-elect has pledged to raise the prevailing wage for those on the H-1B visa programme, which allows US companies to employ foreign workers with skills or expertise in specific fields and has proved popular in sectors such as technology that rely heavily on a foreign worker talent pool.

He has also suggested adding a new requirement that companies find US employees before hiring foreign ones. However, Monika Szabo, a partner specialising in US immigration issues at PwC in Toronto, says the logic of such policies would not stack up. ‘His rhetoric doesn’t make any sense as the prevailing wage is not set by governments, it’s set by companies and it depends on the specific company, industry, location and the relevant cost of living,’ she says. ‘Once you get an H-1B you can work but you must be paid the prevailing wage. It’s not like companies can get foreign workers for less. If anything they have to pay them more.’

Szabo says such measures are unlikely to go down well with business. ‘There are only 65,000 H-1Bs available every year and they’re always oversubscribed – last year I think there were at least 200,000 applications – therefore the odds of getting one are not great anyway.'

In terms of business and regulation, Trump’s criticism of Amazon’s ‘huge antitrust problem’ and pledge to block AT&T and Time Warner’s proposed $85.4bn merger have raised concerns. Janet McDavid is a partner in Hogan Lovells’ Washington office and Co-Chair of the IBA Antitrust Committee. ‘A Trump Administration’s positions on antitrust enforcement are difficult to predict,’ she says. ‘Based on his history and his campaign rhetoric, I expect to see a mix of traditional Republican caution in non-cartel cases, such as mergers or civil conduct investigations, with some potentially unpredictable, aggressive enforcement decisions – perhaps involving industries that Trump mistrusts, such as the media, or entities with which he has had a negative experience as a businessman.’

McDavid says it’s vital that the US continues to lead the way when it comes to international cooperation. ‘Antitrust has been one of our most successful exports and well over 100 countries now have their own antitrust laws. This growth, combined with the increasing integration of the world economy, makes cooperation between antitrust agencies around the globe more essential – and more complex – than ever. The US must be a credible advocate for the view that the antitrust laws should only be used to protect consumers from conduct that threatens to stifle competition and innovation. The US president is a position that imposes awesome responsibility and the enforcement of the antitrust laws has a significant impact on our economy and the world economy.’

On the subject of international trade specifically, there is scepticism that the President-elect’s more bullish rhetoric will inform policy. Eric Emerson is a partner at Steptoe & Johnson (in the firm’s Washington and Beijing offices) and Senior Vice Chair of the IBA International Trade and Customs Law Committee. ‘It seems likely that his most extreme positions – a 45 per cent tariff on all Chinese imports, withdrawing the US from the WTO – won’t come to pass.’

Emerson does, though, believe the President-elect is likely to honour his tough stance on trade enforcement. ‘This could come in the form of trade restrictions through the US’s Section 201 “escape clause” provision, or it could come in the form of even greater enforcement of US anti-dumping duty or countervailing duty laws, or both,’ he says. ‘As a candidate, Trump also promised more WTO cases against China… But building those cases takes time, and they are not at all easy to develop either legally or factually.’

Emerson also points out that China wouldn’t take such policies lying down. ‘In terms of a response, China may take some of these measures in its stride. But, if the US presses too hard, we should expect to see some pushback either in the form of China closing its markets to US exports, or in the form of increased penalties on US business operating in China.’ This would be bad news for many US companies since China was the US’s third-largest goods export market in 2015.

Emerson believes the Trump Administration will have a more immediate impact on certain international trade agreements. ‘First, President-elect Trump has announced his intention to pull the US out of the Trans-Pacific Partnership (TPP) on his first day in office. Even if some effort is later made to renegotiate this agreement, it seems a near certainty that the US will not ratify this agreement in anything like its current form during a Trump Administration.’

The US signed the TPP in February alongside 11 other countries following seven years of negotiations. ‘I also expect that our other existing trade agreements, including the North American Free Trade Agreement, will come under scrutiny for possible renegotiation. And as for US trade policy overall, it is surely the case that over the next four years, the US will be turning away from a trade policy that stresses openness and reduced barriers, toward something more protectionist.’

This, says Emerson, is arguably the biggest challenge facing international trade once Donald Trump assumes office: ‘The US has been a world leader in advocating policies in favour of open markets. If the US pulls back from this important commitment, other countries will surely follow, since it’s far easier for governments to accede to domestic political pressures that favour protection than it is to press for free and open markets. It is now up to the world’s other major economies to continue this fight in the hope that the US will soon return to its position as a leading advocate for this important goal.’

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Series of training videos for LPD conference session chairs and speakers

The Conference Quality Committee has produced a series of short videos aimed at speakers and session chairs. They provide practical tips on delivering effective presentations, as well as organising and chairing successful sessions. The brief length of each video makes them accessible at any time. Presenters include Pippa Blakemore, Steve Hughes and Andrew Klein. Over time the Committee intends to increase the number of videos available online.

For full details see tinyurl.com/ConferenceQuality.

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IBA President in Argentina and Chile for high-level discussions on fighting judicial corruption

On 6 October, IBA President David W Rivkin visited Santiago, Chile to discuss the IBA Judicial Integrity Initiative – a project aimed at combating the problem worldwide. He met with Don Hugo Enrique Dolmestch Urra, President of the Chile Supreme Court; Javiera Blanco Suárez, Minister of Justice at the Chile Ministry of Justice and Human Rights; and Arturo Alessandri Cohn, President of the Chile Bar Association, together with its board of directors.

On the previous day he was in Argentina, meeting Laura Alonso, Director of the Anti-Corruption Office of the Argentina Public Ethics, Transparency and Fight Against Corruption Department and Guillermo Lipera, President of the Buenos Aires Bar Association, as well as with its directors.

In recent months the IBA President has held in-country discussions with lawyers, judges and prosecutors in a number of jurisdictions – including Mexico, the Philippines and Singapore – on how better to promote integrity in the administration of justice; how to assist lawyers to more thoroughly understand the nature of corruption in their respective jurisdictions; and how to think and act when they are confronted with corruption in their dealings with the judiciary.

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Invaluable new tool helps lawyers understand business and human rights

Lawyers seeking to advise clients on the relevance of human rights to business, and law firms evaluating their own responsibilities as businesses with regard to human rights now have access to a new, additional tool to assist them. The Reference Annex to the IBA Practical Guide on Business and Human Rights for Business Lawyers is an in-depth document designed to further business lawyers’ understanding of the UN Guiding Principles (UNGPs) on Business and Human Rights – the authoritative global standard on business respect for human rights – and similar documents.

Developed by the IBA Business and Human Rights Working Group, in collaboration with the IBA Legal Policy & Research Unit, the Reference Annex explains how the UNGPs can be relevant to the advice lawyers provide to clients, as well as their potential implications for law firms as business enterprises. It is a companion to the IBA Practical Guide on Business and Human Rights for Business Lawyers, published earlier in 2016.

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IBA conference calendar for 2017

Next year’s IBA conference calendar is taking shape. With around 50 specialist conferences planned across a broad range of practice areas, there is something available to suit all learning and professional development requirements. Taking place in major cities around the world, these conferences provide unrivalled networking opportunities and information sharing with legal professionals, with the Annual Conference taking place in Sydney, Australia on 8–13 October 2017.

Visit tinyurl.com/IBAConferences for more information.

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Brexit ruling sends constitutional question to Supreme Court

Ruth Green

The recent High Court ruling that the UK government must consult Parliament before triggering Article 50 of the EU Lisbon Treaty was always going to attract considerable attention. Yet, as the case heads to the Supreme Court, the vitriolic reaction to the judgment in certain corners of the media has sparked a broader debate about the roles of both the judiciary and the press in high-profile legal cases.

Following the judgment, the Bar Council of England & Wales and a growing number of solicitors and barristers have criticised the Lord Chancellor and Secretary of State for Justice Liz Truss for failing to adequately condemn the personal attacks on the three High Court judges, who were labelled by one newspaper as ‘enemies of the people’.

Chair of the IBA’s Judges’ Forum, Justice Martin Daubney, echoes the widespread concerns in the legal community about the attacks by some sectors of the popular press. ‘No-one would deny the press the right to disagree with the decision, even in strident terms,’ says Justice Daubney. ‘But it is quite another thing to vilify the judges personally. Beyond the words of their judgments in court, judges are precluded from commenting on cases which are, or have been, before them. That makes them soft targets, as demonstrated by the personal attacks on the judges in this case.’

‘In former times, the convention in common law countries was that senior law officers in government would speak in vigorous defence of judges,’ he adds. ‘However that convention seems to be on the wane, and it is being left to the leaders of the independent profession – the bar associations and law societies – to speak in defence of the judiciary.’

Lawrence McNamara, Deputy Director and Senior Research Fellow at the Bingham Centre for the Rule of Law, says the press is within its rights to comment on the ruling. ‘The press should not be prevented from saying what they have said,’ he told Global Insight. ‘Happily, we no longer have the offence of contempt by “scandalising the court”, which criminalises some forms of criticism of judges. But what the press says should be subjected to scrutiny. One of the reasons that there should not be tighter restrictions on the press with regard to criticism of judgments and of the judiciary is that the judiciary has a statutory and constitutional defender, which is the Lord Chancellor. As such, the judiciary as individuals and as an institution are – rightly – able to be the subject of robust comment.’

However, McNamara said the Lord Chancellor’s reaction to date had left a lot to be desired. ‘At this point, there is a great deal more that the Lord Chancellor could and, I think, should do in addressing the substance of what has appeared in the press,’ he said. ‘There is a wide space between accepting the headlines and policing the headlines. It is not an either/or choice.’

The government, which says it wants to initiate talks on leaving the EU in March 2017, has appealed the decision. The Supreme Court will now consider whether the High Court was right to rule that the government must gain parliamentary approval before it triggers Article 50 – the formal process for withdrawing from the EU. The appeal began at the start of December, with the judgment expected to be handed down in January 2017.

Professor Tony Travers, a local government expert at the London School of Economics, believes the media has contributed to a general misunderstanding of what the legal challenge and the ruling itself could mean for the UK’s process of leaving the EU.

‘There is a paradox in all of this that one of the many purposes of Brexit was to repatriate power to the British courts and to Parliament and at the point that the British courts within the United Kingdom act and suggest Parliament has a vote, that produces a sort of counter-revolution,’ he told Global Insight. ‘You could easily assume that what the High Court has done is strike down the referendum, which they most definitely did not, but I can see how people might interpret it like that given some of the media coverage.’

Consequently, Travers suspects the adverse reaction to the ruling is less about the courts or even the judges themselves, but fears in some circles that Parliament could push for a ‘soft Brexit’ or even reverse the referendum result altogether. ‘The courts are just caught in the cross-fire of a struggle about how radical Brexit turns out to be,’ he says. ‘Therefore by opening the possibility of Parliament having a role in all of this and softening Brexit – because the majority of parliamentarians are almost certainly against Brexit – the courts have just caught themselves in the middle of a vast culture war.’

‘The Supreme Court is being put into the position of effectively being a constitutional court for a country that doesn’t have a written or codified constitution, so we’re in interesting territory here,’ adds Travers.

Indeed, the case is of such ‘fundamental constitutional significance’, as Lady Brenda Hale, the Court’s Deputy President, said in a recent speech in Kuala Lumpur, that all 11 justices will hear the appeal in December, marking the first time in the Court’s history that all of its justices have sat for a single case.

While the outcome of the appeal at this stage is anybody’s guess, Travers says the importance of the independence of the judiciary in the UK shouldn’t be lost in the Brexit debate. ‘One of the UK’s most attractive attributes is that it has the rule of law and part of the rule of law is independent courts and indeed independent legal systems. I’m 100 per cent certain that if there were elected judges or politicians stepping in to overrule judges, the system would not be as effective as the one that we have.’

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IBA podcasts examine implications of the Trump and Brexit votes

Following the election of Donald Trump as the next President of America, the IBA podcast series considers some of the major human rights and rule of law issues likely to arise under his leadership. The President-elect has stated his support for the use of torture as part of counter-terrorism operations and that he will reverse plans to close the Guantanamo Bay detention camp. Discussing what a Trump Presidency could mean for human rights and rule of law are: David Scheffer, US Ambassador at Large for War Crimes 1997–2001; Juan Mendez, United Nations Special Rapporteur on Torture 2010–2016; and Cori Crider, Director of the Abuses in Counter-Terrorism team at Reprieve 2009–2016.

Another recent addition to the IBA podcast series examines Brexit. It analyses the factors that led to the UK voting to leave the European Union. It also assesses the subsequent legal challenge, the High Court ruling that Parliament must vote to start a formal exit, and the Government’s appeal to the Supreme Court against this ruling. Discussing these and related issues, including sovereignty, trade, immigration and security, are: former UK Home Secretary and Foreign Secretary Jack Straw; Professor Tony Travers of the London School of Economics and Political Science; and Arlene Foster, First Minister of Northern Ireland.

Both podcasts are available at tinyurl.com/IBAPodcastsHome and throughiTunes.

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Doing Business in Latin America manual published by Forum

The Latin American Regional Forum has recently published a new, innovative guide entitled Doing Business in Latin America. It focuses on common traps and cultural differences of conducting business throughout the region. The guide covers 14 jurisdictions and the topics: foreign investment, capital markets, rendering of public services, and real estate regulations. Doing Business is available to download as a PDF from the IBA website.

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Election of IBA officers for 2017–2018

At this year’s Annual Conference in Washington, DC, the IBA Council met and elected the incoming IBA President, Vice-President and Secretary-General. Officers elected were: IBA President – Martin Šolc, Czech Republic (pictured); IBA Vice-President – Horacio Bernardes-Neto, Brazil; and IBA
Secretary-General – James Klotz, Canada.

Incoming officers for the BIC, LPD and SPPI were also elected. All terms of office will run from 1 January 2017 through to 31 December 2018.

Full details of the election results can be found at tinyurl.com/IBAElections2016.

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IBA and King’s College London partner on new Executive LLM degree

The IBA and King’s College London have pooled experience and expertise to launch a world-class professional law course for ambitious legal practitioners – typically with between six and eight years of professional experience.

The two year part-time advanced Master of Laws course has been developed for lawyers working in private practice; commercial in-house lawyers; lawyers considering partnership; and those practicing in regulatory agencies. It is an online distance learning programme with five London-based immersive residential weekends culminating in a degree awarded by King’s College London on successful completion of the intensive course.

The Executive LLM is comprised of modules that focus on some of the most challenging global legal issues facing commercial firms and policymaking, including: ethics for multi-nationals, risk communication and management, advanced law, transnational law, advanced negotiation, leadership skills and decision-making. Course participants will be arranged into study groups focusing on areas as varied as: technology, infrastructure, healthcare and the extractive industries.

Tuition will draw on the academic excellence of King’s College London and the practical experience of the IBA’s global membership. Leading academics from across the globe, together with top lawyers from international law firms and in-house divisions, senior judges and authorities from regulators, will connect theory with practical examples to equip those on the course with advanced legal commercial and policy knowledge, wide-ranging legal perspectives and expertise from around the world.  

The first Executive LLM students will be enrolled in March 2017. For more information about the course visit: www.kcl.ac.uk/executiveLLM.