Trade & Customs Roundtable 2014

Who’s Who Legal brings together Edmund Sim of Appleton Luff, Adrián Vázquez of Vazquez Tercero & Zepeda, Ekaterina Zabello of VMP Vlasova Mikhel & Partners and Daniel Crosby of King & Spalding to discuss a range of key issues, including present activity in traditional trade measures, the growing body of work in the sanctions area, the impact of trade agreements and the growth in trade-related work in Africa.


Edmund Sim 
Appleton Luff
Adrián Vázquez
Vazquez Tercero & Zepeda
Ekaterina Zabello
VMP Vlasova Mikhel & Partners
Daniel Crosby 
King & Spalding




In which aspects of the field have you seen the most activity over the past year? Has the work in the typical areas of trade measures, anti-dumping and countervailing duties remained steady?

Edmund Sim: Work in trade remedy measures has been steady for Appleton Luff, but not necessarily in any particular market. Recently we have represented clients in anti-dumping and countervailing duty cases conducted by the US, EU, Australia, Canada, Korea, India, Thailand, Malaysia, Indonesia and Brazil, involving products ranging from solar panels to wheat flour. Our diversification allows us to deal with the ebb and flow of individual markets, and the resulting comparative experience helps us in dealing with complex problems, not just in trade remedy cases, but in all aspects of international trade. Beyond trade remedy work, we are seeing greater demand for trade-related legal services from developing countries seeking to understand the increasing number of regional and bilateral trade agreements (more on this below). Work is also substantially increasing for our firm in regulatory areas as they involve non-tariff barriers to trade.

Adrián Vázquez: In Mexico, trade and customs work has regularly focused on trade remedy cases and customs procedures. Trade remedy cases have grown over the past year because of the increasing trade flow of Chinese imports and the pressure of the Mexican steel industry to obtain protection, mainly from Asian countries. In customs work, Mexico has been active in origin verification procedures, in-bond (maquiladoras) logistics security and value-added tax certifications, as well as regulatory matters. An area in which our firm has been quite active over the past year has been in export controls – a recent practice in Mexico as per the Wassenaar Arrangement.

Ekaterina Zabello: In general we don’t note any significant changes in work and projects related to the mentioned areas of trade measures. Our work flow remains steady.
On the other hand we expect growth in work related to developing distribution agreement schemes and intellectual property-related border control matters.

Daniel Crosby: Our trade group has seen a strong increase in “market access” work as companies turn to trade agreements to push back against protectionist measures in global markets. We have been able to find solutions “under the radar” in many cases where trade commitments exist, but several cases have evolved into – or are moving towards – WTO disputes. We see the increasing focus on health and environmental measures as a major source of trade policy friction over the coming period.
Because the WTO Doha Round negotiations are frozen, our clients are pursuing other approaches for resolving trade issues, including regional negotiations (TTIP, TPP, etc), in the hope that FTA solutions will be multilateralised when the WTO process eventually gets back on the rails. As for trade remedy work, we have seen a surge over the past year both in US investigations and globally. In addition to strong petitioner work in Washington, our US mandates include trade remedy settlement negotiations in the US–China solar/polysilicon cases and in the context of Mexico sugar.
In Latin America we have been particularly active in Brazil and Mexico, while in Asia, China and India have kept the usual investigations coming. We have a strong client base in the Arab Gulf whose exports have recently been investigated by authorities in Turkey and Egypt, and were hit by Taiwan’s first safeguards investigation.
In short, we are experiencing a major uptick in activity and see more of the same on the horizon, especially in the trade remedy arena, and are staffing up to meet strong demand.

Many lawyers we spoke to commented on the growing body of work in the sanctions arena. Has this been the case in your jurisdiction? If so, do you expect this trend to continue?

Edmund Sim: In Asia, we actually had a reduction in sanctions work as the West dismantles its “Burma sanctions” against Myanmar. Hopefully this will continue as the country continues its economic and political reforms. In the EU, instead, our firm was confronted with a substantial demand related to sanctions and successfully litigated three cases before the European Courts. Two more are pending.

Adrián Vázquez: Indeed, sanctions are a growing area of work. Mexico, as a global player and host to many multinational companies, is advocate to most international sanctions regimes and compliant with all. Our firm has a solid sanctions practice.

Ekaterina Zabello: Yes, Belarus is currently subject to a number of sanctions itself. But, first of all, the trade policy of Belarus is much affected by the sanctions imposed on Russia in 2014. Due to the fact that Belarus and Russia are in a common customs territory and trade area, in practice we faced a growth in demand for developing contractual schemes and trade algorithms with Russia through customs union member states. Certainly over the short term – in 2015 – this trend can be expected to continue.

Daniel Crosby: Sanctions work has certainly developed beyond the established Washington compliance work over the past year, for all the known reasons. Major penalties applied for non-compliance have attracted high-level attention from many clients, and all of our offices are now expected to field competence in sanctions compliance.
In addition to the relative novelty of measures against Iran, and now Russia, the more recent sanctions are more comprehensive and coordinated than they have been in the past, so companies (especially banks) have experienced much greater scrutiny and impact on their operations in the United States, the EU and Switzerland than they have in the past. We expect this new normal to continue into the forseeable future.

We have heard reports of a slowdown in classic WTO cases. Is this the case in your jurisdiction? If so, what do you believe to be the key reasons for this?

Edmund Sim: In Asia, we have not seen a slowdown. China, Indonesia and other major Asian trading partners have been participating in most of the recent WTO panels. The perception that the WTO is in a slowdown can probably be linked to the underlying disputes for most of the current WTO panels, with a particular focus on trade remedies, and to the general stalemate in the WTO Doha Round of negotiations. In relation to the WTO, our firm is involved in negotiating activities and accessions and work has not declined in the last year.

Adrián Vázquez: I agree very much with Edmund’s comments. In contrast to Asia, Mexico is not very active on WTO panel cases. First, it must be said that Mexico favours bilateral negotiations before reaching the WTO. A clear example may be found in the footwear and textile negotiations with China. The current sugar dispute with the US may eventually lead to a WTO dispute; however, Mexico is trying to reach a suspension agreement before it decides challenging in WTO forums. Second, despite the numerous anti-dumping measures implemented on Chinese products, China has not taken any steps towards a WTO case. Mexico feels comfortable that China may not want to challenge it in the WTO arena; as long this does not happen, the Mexican policy towards China will not change.

Ekaterina Zabello: Belarus is not a member of the WTO, therefore this is not the case in our jurisdiction.

Daniel Crosby: There is no slowdown in WTO cases. On the contrary, we see an increasing caseload, with bigger disputes in terms of numbers of interested parties, complexity of cases and economic effects. WTO’s director general Roberto Azevêdo recently gave a speech where he clearly documented this trend, and confirmed that active proceedings have doubled since 2012. He added, “This is not just a temporary surge and I do not believe that dispute settlement volume will soon diminish.” We agree wholeheartedly.
In light of the now-confirmed deadlock in WTO Doha Round negotiations, members are turning to the WTO dispute settlement system to address trade policy and economic issues that in the past might have been resolved through trade negotiations or settlement discussions. Our impression is that many countries do not even want to settle disputes where they believe they have a strong case, but would rather litigate and “win” under the current multilateral circumstances.

Africa has been highlighted as a “region to watch”. Are there any particular jurisdictions with which you are anticipating a growth in trade-related work?

Edmund Sim: Appleton Luff has been focused on Africa for many years, with name partners Arthur Appleton and David Luff very active in trade and investment projects, and with the opening this year of our new office in Kampala, Uganda, by Swithin Munyantwali. We anticipate growth in sub-Saharan Africa in trade and investment issues related to energy, resources, and the improving markets in the region.

Adrián Vázquez: Yes. The international community has turned its eye towards Africa and its many wealths. Mexico and South Africa, as fresh economic players are working together, and our country is looking to expand its economic reach in other nations, mostly through world companies operating in Mexico.

Ekaterina Zabello: Historically Russia has always been and remains the main trading partner for Belarus, but in recent years there has been a trendency to increase trade relations with Middle East and Southeast Asia regions. I think local lawyers are sensible to look for this trend.

Daniel Crosby: Although there is plenty of continuing activity in Africa in the technical assistance and training space, and certainly in the investment context, we see very little substantive trade policy or disputes work, with the exception of trade remedy work in North Africa. We are representing Liberia in its WTO accession negotiations, and hope to finish this work during the coming year.
We see a potential for increased technical assistance funding if governments in sub-Saharan Africa implement (multilaterally or unilaterally) the WTO Trade Facilitation Agreement, but have not seen proactive trade policy positions being advanced or many disputes originating from Africa.

With the increasing numbers of free trade agreements, what impact do you think this will have on the legal market? Do you anticipate any new entrants, or a change in the genre of firm in this field?

Edmund Sim: The rise of free trade agreements has already affected the legal market. Appleton Luff lawyers have assisted governments and companies in dealing with the complexities of regional and bilateral trade agreements. However, our work with regard to the two types of agreements has differed. In bilateral trade agreements such as the EU’s preferential agreements with Africa, we have assisted governments and companies in securing market access in the final text and implementation process. In regional trade agreements in Asia and Africa, we have focused more on the growing regional institutions and frameworks being established. For example, I teach law school courses, maintain a blog and have co-authored two books on the ASEAN Economic Community, which are due to be established at the end of 2015. Our partner David Luff is assisting the African Union Commission to organise the private sector’s input in relation to a possible continental free trade area. We have also assisted regional organisations in areas such as trade facilitation and informal trade.

Adrián Vázquez: Mexico maintains a number of free trade agreements around the globe. Notwithstanding the number of these agreements, the bulk of Mexico’s trade continues to be with the United States under NAFTA. Mexico has also joined TPP negotiations which may and certainly will affect the legal market in Mexico in many ways, particularly in preferential and origin enforcement. Currently, our country is negotiating new trade agreements with Turkey and Jordan, and while many wonder why the need to negotiate new free trade agreements when Mexico already has a very open economy, our firm is actively participating in negotiations with Turkey as per the concern of our clients to face fierce competition from Turkish industries. We at Vazquez Tercero see the rise in free trade agreements as a win-win opportunity for developing new clients in TPP markets, and building and continuing the growth of our strong relations with law firms throughout the world. However, new free trade agreements are welcomed to the extent that they bring prosperity and development; the challenge and responsibility of our firm is becoming a tool for development in the legal market front.

Ekaterina Zabello: As I mentioned above, Belarus is not a member of the WTO, but of the custom union of Belarus, Kazakhstan and Russia. I don’t think that any substantial changes in trade targets could be expected in the nearest future.
In addition, according to experts’ view, even under the most favourable conditions Belarus’ joining of the WTO is hardly possible until at least 2016–2017 because of technical circumstances.

Daniel Crosby: We see the legal market for FTA-related services as divided between, on the one hand, technical assistance and negotiating support to developing countries; and on the other hand, highly specialised support to a very limited range of multinational clients who have major issues in large markets, as illustrated in the TTIP and TPP context.
Although many FTAs now follow templates for certain established issues, “next generation” rules are being proposed in regional agreements that require sophisticated legal (and lobbying) support in order to take the results across the line – which is an uphill process in most scenarios at present.
We do not see major changes in the types of firms operating in the FTA area. The established mix of international firms, niche firms and academics all have roles to play going forward.

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