Table Of Contentpublic purpose in international law
RethinkingRegulatorySovereigntyintheGlobalEra
Thistextexploreshowthepublicpurposedoctrinereconcilestheoftenconflict-
ing, but equally binding, obligations that states have to engage in regulatory
sovereignty while honoring host-state obligations to protect foreign investment.
Theworkexaminesthemultiplepermutationsanditerationsofthepublicpurpose
doctrineandconcludesthatthisprincipleneedstobereconceptualizedtomeet
theimperativesofeconomicglobalizationandofanewparadigmofsovereignty
thatisbasedontheinterdependence,andnotindependence,ofstates.Itcontends
that the historical expression of the public purpose doctrine in customary and
conventional international law is fraught with fundamental flaws that, if not
corrected, will give rise to disparities in the relationship between investors and
states, asymmetries with respect to industrialized nations and developing states,
and,ultimately,processlegitimacyconcerns.
PedroJ.Martinez-FragaisapartnerinBryanCaveLLP’sInternationalArbitration
andLitigationPracticeGroup,whereheisthefirm’scoleaderandthecofounder
oftheMiamioffice.Hehasrepresentedeightcountriesasleadcounsel,andhehas
served as an arbitrator in ICSID (World Bank) proceedings. Martinez-Fraga
graduated from St. John’s College, Annapolis (BA, Institutional Awards); and
Columbia University (J.D.), where he was Harlan Fiske Stone Scholar; and he
holdsaPhD(internationallaw)(cumlaude)fromUniversidadComplutensede
Madrid.Hehaspublishedmorethanfiftyarticlesinfifteencountries,whichhave
beentranslatedintofivelanguages,andhehaswrittenfivebooksonpublicand
privateinternationallaw.
C. Ryan Reetz is a partner in Bryan Cave LLP’s International Arbitration and
LitigationPracticeGroup,whereheiscofounderandoffice-managingpartnerof
thefirm’sMiamioffice.Inadditiontoservingascounselandasarbitratorinawide
rangeofinternationalarbitrationmatters,heteachesandlecturesandpublishes
extensivelyoninternationaldisputeresolutiontopics.AmemberoftheAmerican
LawInstitutesince2005,heservedaschairoftheFloridaBarInternationalLaw
Sectionfrom2013to2014.ReetzisagraduateofHarvardCollege(A.B.magnacum
laude)andofBostonUniversitySchoolofLaw(J.D.summacumlaude).
Public Purpose in International Law
rethinking regulatory sovereignty
in the global era
PEDRO J. MARTINEZ-FRAGA
C. RYAN REETZ
32AvenueoftheAmericas,NewYork,ny10013-2473,usa
CambridgeUniversityPressispartoftheUniversityofCambridge.
ItfurtherstheUniversity’smissionbydisseminatingknowledgeinthepursuitof
education,learning,andresearchatthehighestinternationallevelsofexcellence.
www.cambridge.org
Informationonthistitle:www.cambridge.org/9781107081741
©PedroJ.Martinez-FragaandC.RyanReetz2015
Thispublicationisincopyright.Subjecttostatutoryexception
andtotheprovisionsofrelevantcollectivelicensingagreements,
noreproductionofanypartmaytakeplacewithoutthewritten
permissionofCambridgeUniversityPress.
Firstpublished2015
PrintedintheUnitedStatesofAmerica
AcatalogrecordforthispublicationisavailablefromtheBritishLibrary.
LibraryofCongressCataloginginPublicationData
Martinez-Fraga,PedroJ.,author.
Publicpurposeininternationallaw:rethinkingregulatorysovereigntyintheglobal
era/PedroJ.Martinez-Fraga,BryanCaveLLP;C.RyanReetz,
BryanCaveLLP.
pages cm
1. Publicpolicy(Internationallaw) I. Reetz,C.Ryan,author. II. Title.
kz1256.m37 2014
341.5–dc23 2014034128
isbn978-1-107-08174-1Hardback
CambridgeUniversityPresshasnoresponsibilityforthepersistenceoraccuracyof
urlsforexternalorthird-partyInternetWebsitesreferredtointhispublication
anddoesnotguaranteethatanycontentonsuchWebsitesis,orwillremain,
accurateorappropriate.
Tomymother,AnitaNun˜ezArago´n, Formyparents,HeatherandGene;
mywifeLiza,andmydaughters mywife,Susanne;andourdaughter,
AlejandraSof´ıaandValentina Samantha,fromwhomIhavelearned
Luc´ıa,andinmemoriam,Andre´s allthatmattersmost.
Fa´bianSommerfeld:
–C.R.R
“MyhandsareofyourcolourbutI
shametowearaheartsowhite.”*
–PedroJ.Martinez-Fraga
* WilliamShakespeare,Macbeth(Simon&Brown2011).
Ourconcernhereisnotwithphilanthropy,butwithright,andinthiscontext
hospitality(hospitableness)meanstherightofanaliennottobetreatedasan
enemyuponhisarrivalinanother’scountry.Ifitcanbedonewithoutdestroy-
inghim,hecanbeturnedaway;butaslongashebehavespeaceablyhecannot
be treated as an enemy. He may request the right to be a permanent visitor
(which would require a special, charitable agreement to make him a fellow
inhabitantforacertainperiod),buttherighttovisit,toassociate,belongstoall
menbyvirtueoftheircommonownershipoftheearth’ssurface;forsincethe
earth is a globe, they cannot scatter themselves infinitely, but must, finally,
toleratelivingincloseproximity,becauseoriginallynoonehadagreaterright
to any region of the earth than anyone else. Uninhabitable parts of this
surface – the sea and deserts – separate these communities, and yet ships
andcamels(theshipofthedesert)makeitpossibletoapproachoneanother
acrosstheseunownedregions,andtherighttotheearth’ssurfacethatbelongs
in common to the totality of men makes commerce possible. The inhospit-
ableness that coastal dwellers (e.g., on the Barbary Coast) show by robbing
ships in neighboring seas and by making slaves of stranded seafarers, or of
desertdwellers(theArabicBedouins),whoregardtheirproximitytonomadic
peoples as giving them a right to plunder, is contrary to natural right, even
thoughthelatterextendstotherightofhospitality,i.e.,theprivilegeofaliens
to enter, only so far as makes attempts at commerce with native inhabitants
possible.Inthiswaydistantpartsoftheworldcanestablishwithoneanother
peacefulrelationsthatwilleventuallybecomemattersofpubliclaw,andthe
human race can gradually be brought closer and closer to a cosmopolitan
constitution.
ImmanuelKant,ToPerpetualPeace:APhilosophicalSketch1,15–16
(TedHumphreytrans.,HackettPublishingCo.,Inc.2003)
Contents
ForewordbyDavidD.Caron pagexiii
Acknowledgments xv
IntroductionandSketchofHistoricalOrigins 1
1 PublicPurposeinNAFTA 11
A. PublicPurposeintheContextofReservations 24
B. ChapterElevenoftheNAFTADoesNotDevelopan
ObjectiveTest 32
C. PublicPurposeintheNAFTALacksHierarchical
Structure 34
D. TheChapterElevenFrameworkIndiscriminately
IncorporatesandComminglesTermsofArtfromthe
GATT:AnUnwantedCross-Pollenization 34
E. TheNAFTAStandardPublicPurposeExceptions
andtheTreatyReservationPublicPurposeCategory:
HarmonizingaDichotomy 39
F. BeyondtheNAFTAChapterElevenFramework:
TheNAFTA’sAnatomyProvidesforanExpansive
ConstructionofthePublicPurposeDoctrineandthe
“LegitimateObjective”Standard 44
G. ConclusionsandObservations 53
H. TheJurisprudenceofPublicPurposeintheNAFTA 55
1. TheMetalcladLegacy:OneExtreme 59
2. An“EffectsTest”BeyondthePurviewofPublic
Purpose 65
3. RevisitingMethanexthroughthePrismofthePublic
PurposeDoctrine 70
vii
viii Contents
I. TheMethanexApproachandaSwingofthe
Pendulum 71
J. BeyondMetalcladandMethanex:TheNAFTA
Jurisprudence 80
1. ThePublicPurposeLegacyofMetalcladand
Methanex 84
2. ABroaderExaminationoftheNAFTA’s
JurisprudenceandOtherInvestor-StateDecisional
Law:InSearchofaViablePublicPurpose
Framework 85
3. TheTecmedContribution 91
4. ThePolicePowerDichotomyandFeldmanv.
Mexico 104
5. ReflectionsonConventionalInternationalLaw’s
UseofPublicPurpose 109
2 IdentifyingPublicPurposeinCustomaryInternational
Law:SelectInternationalInstruments 113
A. ThePlaceofthePublicPurposeDoctrinein
CustomaryInternationalLaw 113
1. RevisitingFundamentalsofCustomaryInternational
Law 113
B. FoundationalConcernsEndemictoCustomary
InternationalLawChallengingtheDevelopmentof
aPublicPurposeDoctrine 118
C. DiscoveringandRevivingthePublicPurpose
DoctrineinInternationalInstruments 124
D. TheManyNamesofthePublicPurposeDoctrine:
ExploringUniformityandMultifarious
Nomenclature 126
E. EvidenceofScopeandSubstanceofthePublic
PurposeDoctrineinSelectInternationalInstruments 129
1. Identification,Scope,andContentofthePublic
PurposeDoctrinewithinInternationalInstruments
ConcerningTransnationalTradeandInvestment:A
DoctrineThatExpandsSovereigntywithin
InstrumentsThatLimitStateAuthority 129
2. PublicPurposeinUNConferenceonTradeand
DevelopmentandWorldTradeOrganization
Instruments 129
