A dispute arising under: the Statute of the International Court of Justice: March 2008: the Government of the United States of America (applicant) v. The Government of Canada (respondent) Memorial of the Applicant : American University Washington College of Law.

• Position: 2007-2008 NIAGARA INTERNATIONAL MOOT COURT COMPETITION

QUESTIONS PRESENTED

1. Whether the fuel export charge is inconsistent with Canada's obligations under NAFTA Chapters 3 and 6 and GATT Articles I, VIII, and XI, when the charge is not applied to domestic consumption of fuel or fuel delivered to other contracting parties, and is imposed in order to raise revenue for a project unrelated to fuel transportation?

2. Whether Canada can justify the fuel export charge under the general exceptions or national security exception of NAFTA Chapter 21 or GATT Articles XX or XXI, when there is a reasonable alternative measure available to Canada that is consistent with Canada's obligations under NAFTA and GATT?

3. Whether the Animal and Plant Health Inspection Service user fees are consistent with the United States' obligations under NAFTA Article 310 and GATT Articles I and VIII, when the user fees are uniformly applied to all contracting parties, are limited to the approximate cost of services rendered, and are further justified by the general exceptions or national security exceptions of NAFTA and GATT because they are necessary to protect animal and plant life from foreign pests and diseases, as well as to protect the national security interests of the United States from bioterrorism?

4. Whether the Western Hemisphere Travel Initiative is consistent with the United States' obligations under GATS and Chapters 12 and 16 of NAFTA, where the passport requirement is uniformly applied to citizens of all countries, including American citizens, and where it is further justified by the national security exception under NAFTA and GATS?

   JURISDICTIONAL STATEMENT

   The United States and Canada, the Parties to the dispute, appear before this Court pursuant to Articles 40(1) and 36(1) of the Statute of the International Court of Justice. (1) The Parties have met all the requirements of Articles 40(1) and 36(1), and by Special Agreement have agreed to submit their dispute to the International Court of Justice. The Parties have stipulated to the Court's jurisdiction and the admissibility of this case. Mexico was notified of the decision by Canada and the United States to bring this case before the International Court of Justice, lifting it out of the North American Free Trade Agreement context, and had no objection to its loss of right to appear.

   STATEMENT OF THE CASE

   1. The Western Hemisphere Travel Initiative

      The Western Hemisphere Travel Initiative ("WHTI"), which was announced by the United States' Department of Homeland Security on November 24, 2006, requires all travelers entering the United States to carry a valid passport or other appropriate secure documentation when entering the United States. (2) The WHTI applies to all travelers, regardless of nationality, including Canadian and American citizens. (3) Prior to the implementation of the WHTI, Canada had been exempted from these requirements and Canadian and American citizens could cross the U.S.--Canada border with only a valid photo identification (driver's license) and a birth certificate. (4) The WHTI also applies to Mexico and Bermuda which had also previously been excepted from this requirement. (5)

   2. Animal and Plant Health Inspection Services User Fees

      On August 25, 2006, the United States Animal and Plant Health Inspection Services ("APHIS") announced the introduction of agricultural quarantine and inspection user fees on all commercial shipments and passengers entering the United States from Canada. (6) Canada was previously exempted from the user fees. (7) The exemption was lifted due to the need to expand border inspection efforts to combat the rising number of prohibited items crossing the border into the United States. (8) Most of these prohibited materials originate from outside of Canada and present a high risk of carrying plant pests and animal diseases into the United States. (9) The exemption was lifted in order to recover the cost of the United States' current inspection activities at the border and to expand inspections in order to keep pace with the increase in traffic coming across the border. (10)

      APHIS sets the price of the user fees by calculating the annual cost of the agricultural inspection program for each mode of transportation and then dividing that amount by the estimated number of air passengers for the given mode of transportation to determine the individual user fee for each mode of transportation. (11) APHIS user fees are only spent on agricultural quarantine and inspections activities. (12)

      The cost of the user fee for each mode of transportation is listed in the table below.

   3. "Smart and Secure Borders"

      On August 21, 2007, U.S. President Bush, Canada's Prime Minister Harper, and Mexico's President Calderon, issued a Joint Statement asking their Ministers to focus on five priority areas for the next year, including a "Smart and Secure Borders" initiative. (13) The leaders of the three countries recognized their long cooperative history of border management and committed themselves to facilitating the safe and secure movement of trade and travelers across their borders. (14)

      On September 11, 2007, Canada and the United States issued a Joint Statement that Canada would spend $1 billion on a variety of border initiatives, including building screening facilities and erecting ground sensor towers along the U.S.--Canada border. (15)

   4. The Fuel Export Charge

      On September 11, 2007, Prime Minister Harper's Office announced the implementation of a fuel export charge for all fuel transported by way of pipeline of $CDN 25/barrel. (16) The Fuel Export Charge legislation requires all exporters of fuel by pipeline to register for export tax purposes, to file monthly returns, and remit the export tax on a monthly basis according to the barrels of fuel put into the pipeline for export to a location outside of Canada. It also requires all fuel exporters to apply for export permits for each transaction involving an export of fuel by way of pipeline and to provide prescribed information. (17)

      Canadian Prime Minister Harper stated that Canada is imposing the fuel export charge because "the security of North America depends upon Canada playing its part" and Canada is "willingly taking the steps requested by its closest trading partner, the United States." (18) Prime Minister Harper added that his government recognized its obligation to ensure a secure North America as well its obligation to its citizens to lower taxes instead of raising them. To that end, Harper stated that Canada is imposing the export charge on fuel transported by pipeline "to raise the money to pay for the infrastructure projects and technology purchases that it has agreed to make." (19)

   5. Procedural Posture

      On September 23, 2007, the United States filed a dispute with the International Court of Justice (ICJ) regarding the fuel export charge. (20) On October 23, 2007, Canada responded by filing a dispute with the ICJ regarding the WHTI and the APHIS user fees. (21) Both governments agreed to refer their disputes to the ICJ rather than the Dispute Settlement Body of the World Trade Organization (WTO), a Chapter 20 North American Free Trade Agreement (NAFTA) panel or any other body. Both governments also agreed that the ICJ would have jurisdiction to consider the issues set out below. (22)

      Regarding the fuel export charge, the United States takes the position that it is contrary to NAFTA Articles 309, 314, 315, 604, and 605 and General Agreement on Tariffs and Trade (GATT) Articles I, VIII, and XI and not justified under with the general or national security exceptions of NAFTA or GATT. Canada takes the position that the fuel export charge is consistent with its obligations under NAFTA and GATT or that it is justified under the general or national security exceptions of each agreement. (23)

      Additionally, Canada takes the position that the APHIS user fees are contrary to NAFTA Article 310 and GATT Article I and VIII, and that the user fees are not justified under either the general or national security exceptions of NAFTA and GATT. (24) The United States argues that the APHIS user fees are consistent with its obligations under NAFTA and GATT or in the alternative, that the user fees are justified under either the general or national security exceptions of NAFTA and GATT. (25)

      SUMMARY OF THE ARGUMENT

      The fuel export charge is not consistent with Canada's obligations under GATT Articles I and XI and NAFTA Chapters 3 and 6 because it is not imposed on domestic consumption, or on fuel exports not transported by way of pipeline, and fails to grant the United States most favored nation status. In addition, the charge violates GATT Article VIII, because Canada is imposing the charge for a fiscal purpose and raising revenue for a project unrelated to the transportation of fuel. Further, the fuel export charge cannot be justified by either the general or national security exceptions under NAFTA or GATT because it is not "necessary" to the essential security interests of Canada.

      Additionally, the APHIS user fees are consistent with the United States' most favored nation obligations under GATT Articles I because the user fees are applied consistently to all contracting parties. Furthermore, the APHIS user fees are consistent with the United States' obligations under GATT Article VIII because the user fees are limited to the approximate cost of inspection services rendered and do not serve a fiscal purpose. Moreover, even if the user fees are not consistent with the United States' obligations under NAFTA Article 310 or GATT Articles I and VIII, the user fees are nonetheless justified under the general exceptions or the national security exception of NAFTA and GATT because the user fees are necessary to protect animal and plant life from foreign pests and diseases, as well as to protect the national security interests of the United States from bioterrorism.

      Furthermore, the WHTI is consistent with the United States' obligations under GATS and NAFTA...