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 Respondent: The John Marshall Law School.

Position2007-08 NIAGARA INTERNATIONAL MOOT COURT COMPETITION

QUESTIONS PRESENTED

  1. Whether the Western Hemisphere Travel Initiative (WHTI) is contrary to the North American Free Trade Agreement (NAFTA) Chapters 12 and 16 and the General Agreement on Trade in Services (GATS) and falls outside of a national security or general exception under NAFTA, the General Agreement on Tariffs and Trade (GATT), or the GATS.

  2. Whether the Animal and Plant Health Inspection Service (APHIS) user fees are contrary to NAFTA Article 310 and GATT Articles I and VIII and fall outside of a national security or general exception under NAFTA, GATT, or the GATS.

  3. Whether the Fuel Export Charge violates NAFTA Articles 314, 315, 604, and 605 or GATT Articles I, VIII and XI and falls within the national security or general exceptions under NAFTA Articles 607, 2101, 2102 or GATT Articles XX and XXI.

    JURISDICTIONAL STATEMENT

    The parties to this matter, Canada and the United States of America, hereby submit this dispute to a Chamber of the International Court of Justice pursuant to Articles 40(1) and 36(1) of the Statute of the International Court of Justice. (1) Both Parties have agreed to immediately bring their actions and positions into conformity with the conclusions of this Court.

    STATEMENT OF FACTS

    On August 25, 2006, the United States (U.S.) Animal and Plant Health Inspection Service (APHIS) of the U.S. Department of Agriculture (USDA) announced in the U.S. Federal Register (Volume 71, No. 165) an interim rule to impose Agricultural Quarantine and Inspection (AQI) user fees on all commercial shipments entering the U.S. from Canada beginning on November 24, 2006. (2) Canada was exempted from the user fees. (3) However, this exception was removed. (4) Starting January 1, 2007, air passengers arriving in the U.S. from Canada began paying user fees regardless of whether they were traveling with fruits or vegetables or whether they were processed through customs and immigration at a Canadian airport. (5) The amount of the user fee for air passengers is $USD 5.00 per passenger and $USD 70.50 per aircraft entering the U.S. from Canada. These fees are incorporated into the price of airline tickets. (6)

    Beginning March 1, 2007, APHIS removed the inspection exemption for all commercial vessels (ships) entering the U.S. from Canada. (7) The amount of the user fee for each maritime vessel is $USD 490.00 per entry and is imposed irrespective of its cargo. (8) Furthermore, as of June 1, 2007, a user fee of $USD 7.75 is imposed on each rail car moving from Canada to the U.S. and $USD 10.75 on each truck moving from Canada to the U.S. (9) Canada's Department of Foreign Affairs and International Trade (DFAIT) conveyed to its counterparts at the Department of Homeland Security (DHS) and the U.S. Trade Representative its view that the APHIS user fees are customs user fees and contrary to NAFTA and GATT.

    On June 26, 2007, the U.S. Department of State (D.O.S.) and the DHS jointly published a Notice of Proposed Rulemaking to implement the second phase of the Western Hemisphere Travel Initiative (WHTI). (10) The WHTI requires all travelers to carry a valid passport or other appropriate secure documentation when traveling to the U.S. from within the Western Hemisphere. (11) Specifically, this second phase requires U.S. citizens and non- resident aliens from the Western Hemisphere, including Canada, to possess and provide at the time of entry in the U.S. a valid passport or certain prescribed identification. (12) Canada raised issues with the U.S. government that the WHTI disproportionately affects Canada given the extent to which the free movement of persons limits the free movement of goods and service. Nevertheless, the U.S. justified the WHTI as a national security-related measure.

    On August 21, 2007, Canada's Prime Minister Harper, U.S. President Bush, and Mexico's President Calderon issued a Joint Statement at the conclusion of the 2007 Montebello North American Leader's Summit. (13) In the Joint Statement, the leaders asked their Ministers to focus their collaboration on five priority areas for the next year. (14) The priority that is relevant to the dispute at hand is "Smart and Secure Borders," which call for effective border strategies that minimize security risks, while facilitating the efficient and safe movement of goods, services and people, as trade and cross-border travel increase in North America. (15)

    After the release of the Joint Statement, a number of U.S. Presidential candidates made statements in the media that Canada must take the security of North America seriously. Additionally, these candidates made unsupported statements that the September 11, 2001 hijackers entered the U.S. from Canada. Thereafter, U.S. Secretary of Homeland Security Chertoff, U.S. Vice President Cheney, and Canada's Prime Minister of Public Safety Day immediately began discussions with the view to make an announcement on September 11, 2007 that plans were developed to meet the security-related action points in the Joint Statement.

    On September 11, 2007, Canada and the U.S. issued a Joint Statement that Canada would spend one billion dollars to implement a variety of border initiatives. (16) These initiatives include building screening facilities at least one kilometer from border crossings, erecting ground sensor towers, and installing advanced radiological detection technology at all its ports. (17) In addition to announcing these initiatives, Canada's Prime Minister's Office also announced an export tax of twenty-five Canadian dollars per barrel on fuel transported via pipeline. (18)

    During the announcement of the export tax, Canada's Prime Minister Harper explained that the imposition of the fuel export tax was necessary for Canada to fully partake in ensuring the security of North America. (19) Prime Minister Harper stated that Canada is imposing an export tax on fuel to raise money to pay for the infrastructure projects and technology purchases that it agreed to make. (20)

    In order to support the Fuel Export Charge legislation, the Softwood Lumber Product Export Charge Act, 2006 was used as precedent. The Fuel Export Charge requires that all exporters of fuel by pipeline register for export tax purposes, file monthly returns, and remit the export taxes on a monthly basis according to the barrels of fuel put into the pipeline for export. All exporters of fuel by pipeline are required to apply for export permits for each transaction involving such an export of fuel and provide prescribed information. Opposed to Canada's imposition of the export tax on fuel, the U.S. took the position that the export tax was contrary to several NAFTA and GATT provisions. However, Canadian Ambassador Wilson reaffirmed that the Fuel Export Charge would remain in effect.

    On September 23, 2007, the U.S. filed a dispute with this Court with respect to the Fuel Export Charge. Canada responded on October 23, 2007 by filing a dispute with this Court regarding the WHTI requirement that all American and Canadian citizens provide a passport as identification to border and immigration officials, as well as to the APHIS user fees.

    SUMMARY OF ARGUMENT

    The Applicant violated international law by enacting the WHTI because it accords less favorable treatment to Canadian service suppliers and adversely affects trade in services. APHIS user fees also constitute customs user fees, thereby violating both NAFTA and MFN treatment. Neither the WHTI nor the APHIS user fees are justified by general or national security exceptions. Accordingly, both the WHTI and APHIS user fees are unlawful. Further, Canada's Fuel Export Charge is valid because the Softwood Lumber Agreement permits parties to implement export charges and it is justified by general and national security exceptions.

    ARGUMENT

    1. THE WHTI IS CONTRARY TO NAFTA CHAPTERS 12 AND 16 AND THE GATS AND FALLS OUTSIDE OF A NATIONAL SECURITY OR GENERAL EXCEPTION UNDER NAFTA, GATT, OR THE GATS.

    Article 26 of the Vienna Convention on the Law of Treaties (VCLT) requires a party to perform its treaty obligations according to the principles of pacta sunt servanda, which states that "[e]very treaty in force is binding upon the parties to it and must be performed by them in good faith." (21) As such, a treaty interpreter must "seek to give effect to the object and purpose" (22) of the treaty. As the specific nature of the treaty is so significant to its interpretation, (23) international tribunals have not hesitated to resort to the preamble of a treaty in order to determine the treaty's principal object. (24)

    All three treaties, NAFTA, GATT, and the GATS, should be interpreted pursuant to the rules of the VCLT. (25) Under Articles 31 and 32 of the VCLT, a treaty's terms must be interpreted according to their ordinary meaning, and if terms remain ambiguous, the travaux preparatoires may be consulted. (26) Specifically, NAFTA Article 102(2) provides a mandatory standard for the interpretation of the detailed provisions of the Agreement. (27) It states, "[t]he Parties shall interpret and apply the provisions of this Agreement in the light of its objectives ... and in accordance with applicable rules of international law." (28) As a free trade agreement, NAFTA has "the specific objective of eliminating barriers to trade among the three contracting Parties." (29) As a result, "[a]ny interpretation adopted by ... [a] Panel must, therefore, promote rather than inhibit NAFTA's objectives." (30)

    1. The WHTI Accords "Less Favorable" Treatment to Canadian Service Suppliers than to American Domestic Suppliers and Obstructs the "Temporary Entry for Business Persons" Between the Countries.

    The WHTI is contrary to Articles 1202 (national treatment for cross-border services) and 1203 (most-favored-nation treatment (MFN) for cross-border services), as well as Chapter 16 (temporary entry for business persons) of NAFTA because it accords "less favorable" treatment to Canadian service suppliers than it does to...

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