Most-favoured Nation Treatment Research Articles

African Continental Free Trade Agreement's Conditional Most Favoured Nation: A Necessary Compromise?

AbstractThe inception of the African Continental Free Trade Agreement (AfCFTA) constitutes a major advancement in Africa's economic integration process. Diverging from what appears to be the norm in contemporary trade treaties, the agreement adopts a conditional Most Favoured Nation (MFN) clause hinged on the principle of reciprocity. Without the promise to reciprocate preferential treatment, the beneficiary state does not assume the right to demand MFN treatment. In broader discussions, this feature has been criticized for possessing the tendency to restrict trade. However, examining it in the context of Africa's trade paradigm, this paper argues that the non-automaticity of the AfCFTA's MFN clause is a cardinal feature safeguarding its existence.

As inconsistências da solução investidor-Estado na proteção internacional do investidor estrangeiro: análise das principais cláusulas substantivas dos BITs a partir dos casos arbitrais ad hoc, sob a perspectiva dos países receptores de capital

International investment law is historically structured by the unilateral protection of the foreign investor. The dissemination of the Bilateral Investment Treaty (BIT) model dates back to the second half of the twentieth century, and its expansion occurred only after the 1980s. BITs consist of an international agreement comprising substantive and procedural rules, defining the protection of foreign investment and investors in a territory other than their nationality, as well as establishing a dispute resolution model, with the adoption of the Investor-State solution system via ad hoc arbitration. In the 21st century, after decades of prevalence of BITs, there have been numerous criticisms of this model, characterized by subjective and controversial decisions, incongruous interpretations and, above all, by blocking the legitimate exercise of the State to dispose of its public interest, such as environmental protection, health and economic measures. The article analyzes these substantive rules from ad hoc arbitration cases: (i) National Treatment (NT); (ii) Most-Favored-Nation Treatment (MFN); (iii) Minimum Standard of Treatment (MST) principle; (iv) Fair and Equitable Treatment (FET); (v) Full Protection and Security (FPS); (vi) Direct and Indirect Expropriations and Compensation; and (vii) Umbrella Clause. Finally, the article concludes that the arbitral awards are inconsistent and inflict serious damage to the exercise of the States, especially to host States, which is evidenced by the recent amendments of the BITs by more restrictive models of international investment protection.

Incoming: How International Investment Law Constrains Foreign Investment Screening

Abstract Domestic screening of foreign investment, often on national security grounds, has intensified in recent years. More countries are introducing such regimes, while others expand their scope or allow retrospective screening. These developments increase the potential for investor–State claims under international investment agreements, even sometimes regarding investments that are not yet established. Host States need to be aware of the potential for adverse screening decisions, the imposition of conditions, or due process shortcomings to conflict with investment obligations, such as fair and equitable treatment or most-favoured nation treatment. Although tools exist in some treaties to exclude or exempt investment screening, these may not prevent a successful investment claim. For example, listing a screening regime as a non-conforming measure may not cover all future amendments, and general and security exceptions are subject to considerable uncertainty. Host States need to ensure compliance with international investment law in creating and developing screening regimes.

Implementation of Tourism Activities on MFN (Most-Favoured- Nation Treatment) and (NT) National Treatment Principle

This study aims to find out the principles of Most Favored Nation (MFN) and National Treatment (NT) in the Provisions of Law of the Republic of Indonesia Number 10 of 2009 concerning Tourism. This type of research is normative legal research with a statutory approach. The research materials used are primary and secondary by connecting problems from various sources, literature studies into data collection techniques and data processing systematically and logically and analyzed with perspective analysis methods. In accordance with the formulation of the problem, this research is to examine the principles of Most Favored Nation (MFN) and National Treatment (NT) contained in the Provisions of Law of the Republic of Indonesia Number 10 of 2009 concerning Tourism.

On the Validity and Scope of Macro-Coherence

The scope of coherence, as a grounds justifying measures interfering with the fundamental freedoms, is limited by the concept of macro-coherence. This article analyses the origin and rationale of macro-coherence and how the concept relates to the balanced allocation of taxing rights. The authors argue that it should be abandoned. If not, this could reignite discussions about fundamental issues of EU tax law, such as most-favoured nation treatment and the obligation of Member States to conclude tax treaties.

DIGITAL SERVICES TAX REGULATION AND WTO NON-DISCRIMINATION PRINCIPLE: IS THE DECK STACKED?

A growing debate on the imposition of digital services tax emerged as one of the latest trade war battlegrounds. Indonesia and the European Union (EU) are among the countries that have taken unilateral actions to implement digital services tax. This paper examines (i) digital services tax regulation in Indonesia and the EU and (ii) whether the digital services tax regulation violates the non-discrimination principles of WTO according to the GATS. By comparing the statutory and practice of digital services tax in Indonesia and the EU, this work concludes that firstly, digital services tax in Indonesia is regulated by law, which implements significant economic presence (SEP) criteria. In the EU, digital services tax is regulated through the Council Directives and implements ring-fencing method as well as SEP criteria. Secondly, the non-discrimination principles in the GATS are promulgated in Article II concerning Most-Favored Nation Treatment and Article XVII concerning National Treatment as well as relevant jurisprudence of WTO case laws. Indonesia and the EU’s digital services tax regulation are not discriminatory, because based on existing indicators, the existence of both de jure and de facto discrimination is not proven. This paper suggests that in the event that there are member states who decide to challenge the measures to the WTO, Indonesia and the EU should provide evidence that shows the absence of unfavorable treatment of certain WTO member states in digital services tax practices by Indonesia and the EU.

MOST-FAVORED NATION TREATMENT CLAUSE IN INVESTMENT ARBITRATION

Bilateral and regional investment agreements have proliferated in the last decade and new ones are still being negotiated. Most-Favored-Nation (MFN) clauses link investment agreements by ensuring that the parties to one treaty provide treatment no less favorable than the treatment they provide under other treaties in areas covered by the clause. MFN clauses have thus become a significant instrument of economic liberalization in the investment area. Moreover, by giving the investors of all the parties benefiting from a country’s MFN clause the right, in similar circumstances, to treatment no less favorable than a country’s closest or most influential partners can negotiate on the matters the clause covers, MFN avoids economic distortions that would occur through more selective country-by-country liberalization. Such a treatment may result from the implementation of treaties, legislative or administrative acts of the country and also by mere practice. The present article provides a factual survey of jurisprudence and related literature on MFN treaty clauses in investment agreements with a view to contributing a better understanding of the MFN interfaces between such agreements. Key words: dispute resolution, foreign investment, ICSID, most-favored nation treatment, third party treaty, mandate of the arbitration tribunal, a selective import

Legal perspectives on the protection of bilateral investment between China and Switzerland

ABSTRACTGiven the rapid increase of bilateral investments between China and Switzerland over the last decade, the legal framework applicable to foreign investment has become more and more sophisticated reflecting the various interests regarding foreign investment. These interests do not only include the protection and promotion of foreign investment in order to facilitate economic growth, but also the safeguard of the effective functioning of the markets as well as the protection of national security from undue influence by foreign actors. In light of this, this paper takes a comparative law perspective on the applicable legal framework for foreign investment flowing from China to Switzerland and vice versa. By doing so, it focuses on the rights of investors under the bilateral investment treaty concluded between the two countries as well as on two ex ante review mechanisms screening transactions involving foreign investment, this being merger control and national security review. Finally, it analyzes the possibilities of Chinese investors to enter the European Union market through investments made in Switzerland and draws lessons from the Swiss experience for a future bilateral investment agreement between China and the European Union. The paper finds that, with the exclusion of ‘letter-box’ companies, Chinese and Swiss investors can benefit from a high degree of protection provided in the bilateral investment treaty between the two countries, which can be enforced through investor-state arbitration. The merger review processes in the two countries are largely comparable, except for the fact that the Chinese merger review can potentially be based on non-competition factors. Regarding the safeguard of national security, the two countries adopt very different approaches. While China provides for a review mechanism for individual transactions, Switzerland has conducted a general risk assessment screening all potential transactions in the foreseeable future. The two approaches fit the respective circumstances of the two countries. With respect to access to the European Union market, Chinese investors in Switzerland can expect favorable conditions only regarding very specific sectors, this being civil aviation and insurance. In view of negotiations of a future bilateral investment agreement with the European Union, China could notably consider extending most-favored nation treatment to European Union investors with respect to market access.

Direct Taxes and the GATS: Substantive and Procedural Defences for Non-compliant Income Tax Measures

This article reviews the applicability of substantive and procedural defences for non-compliant income tax measures. It is argued that increasing legislative action on the domestic level will require detailed knowledge not only of the substantive obligations of the General Agreement on Trade in Services (GATS) but also its various exception clauses. GATS Article XXII:3 is reviewed that shields violations of the national treatment (NT) requirement from challenge in WTO dispute settlement proceedings where the measure falls within the scope of a double taxation agreement (DTA). The ambiguous wording and the lack of jurisprudence on the provision leave states with little guidance on its application. This article explores issues that arise under the provision ratione materiae, temporis, and personae. The quantitative reach of the provision is equally examined. Subsequently, the once-off opportunity to immunize violations of the most-favoured-nation (MFN) clause by means of inclusion in the List of Article II Exemptions is reviewed. Few states have submitted tax exemptions all of which are, with the exception of the US’, narrowly framed. Lastly, the scope of the subparagraphs of the general exception clause, Article XIV, is analysed. In addition to subparagraph c) which may serve to justify a wide range of violations, subparagraphs d) and e), relating to national and MFN treatment respectively, are scrutinized.

Antidumping Measures and the Most-favoured Nation Treatment Requirement

Decision of the Appellate Body in two cases has raised the issue whether antidumping measures should be applied on MFN basis. One view is that it should be. Another view is that it need not be. Author supports the idea that it need not be but on arguments different from what is given by other writers. Author contends that interpretation of Article VI and Antidumping Agreement do not support the idea of application of antidumping measures on MFN basis.

Most-Favoured-Nation Treatment: Survival Clauses and Reform of International Investment Law

In the last decade, international investment law has been on a trajectory of rapid evolution with reform high on agenda priorities. Reform requires a reconciliation of competing interests, which is generally so difficult to achieve that it is often unclear whether an option constitutes ‘reform’ or unwanted change. Two specific treaty provisions, the most-favoured-nation (MFN) treatment and survival clauses, can interfere with the reform process and become an impediment to changing the rules of the game. This is particularly true when political will is present. The MFN treatment, a guarantee of non-discrimination present in the quasi-totality of investment treaties, can have far-reaching ramifications for newly negotiated provisions, especially where international investment agreements confer pre-establishment rights and a clause expressly covers ‘all matters’ within a treaty. Survival clauses, a type of provision that extends the validity of an investment agreement beyond its termination, can delay the onset of the new options for an average of between five and twenty years after expiry of the treaty’s minimum period of application. This article explores these two types of clauses and discusses their potential impact on the reform of international investment law.

SVHC in imported articles: REACH authorisation requirement justified under WTO rules.

The purpose of the REACH Regulation is to ensure a high level of protection of human health and the environment as well as the free circulation of substances on the internal market while enhancing competitiveness and innovation. To this end, REACH introduces, among other instruments, the authorisation regime for substances of very high concern (SVHC) that are listed on Annex XIV of the regulation. After expiration of the transitional period for each Annex XIV-SVHC, articles, such as most products of daily use, produced in the European Economic Area (EEA) may not contain such substances unless an authorisation was granted for the specific use or this use falls within the scope of an exemption from the authorisation requirement. The authorisation scheme does, however, only apply to SVHC used in the EEA. As a consequence, REACH does not regulate SVHC entering the European market as part of imported articles which burden human health and the environment. Moreover, from an economic perspective, domestic articles are subject to stricter requirements than those which are produced abroad, putting actors from within the EEA at competitive disadvantage and thus impeding the intention of REACH to enhance competitiveness and innovation. One option to close this regulatory gap could be to extend the authorisation requirement to SVHC present in imported articles. A legal appraisal on behalf of the German Environment Agency (UBA) assesses whether such option would be in accordance with the specifications of WTO world trade law. It concludes that, measured by the standards of the WTO dispute settlement practice, such an extended authorisation scheme would neither violate the principles of national treatment and most-favoured nation treatment. Also, such regulation would not constitute an unnecessary obstacle to trade, since the extended authorisation requirement would pursue a legitimate objective covered by the regulatory autonomy of the EU and, furthermore, the regulation would not be more trade-restrictive than necessary. The contribution at hand summarises the main findings while taking into account first reactions to the legal appraisal.

Challenging Compliance with International Intellectual Property Norms in Investor–state Dispute Settlement

Enforcing intellectual property (IP) rights abroad is not easy—not least because international IP treaties do not create global rights that can be invoked in national courts. International investment law offers potential routes for overcoming these hurdles. Whenever investment treaties include IP rights as an investment and allow for investor–state dispute settlement (ISDS), investors can challenge host state measures affecting their IP rights in ISDS proceedings. As this article will show, this in turn offers a unique opportunity for invoking the standards of protection under international investment agreements (IIAs) to challenge host state compliance with international IP treaties. While challenging national IP regimes is an attractive option for right holders, these challenges potentially amount to a sea change for the international IP regime and cause serious concern for host states. I, however, argue that most of the routes pursued by right holders under IIAs are unlikely to be successful. Investment protection standards such as fair and equitable treatment, umbrella clauses, and most-favoured nation treatment should not be construed to allow invoking alleged breaches of international IP norms in ISDS. Some IIAs, however, contain clauses that subject expropriation claims against compulsory licenses and other IP limitations to a test of consistency with the international IP rules governing these limitations. As they offer the only feasible route for investors to challenge host state compliance with international IP treaties, I review the implications of these clauses, recent reform proposals, and suggest alternative mechanisms for aligning international IP and investment protection based on general international law.

한중일 FTA와 투자를 둘러싼 법적체계와 제약요소의 개선

한중일은 새로운 경제성장을 위한 고민과 더불어 외자를 유치함에 있어 새로운 도전과 어려움에 직면해 있다. 향후 한중일 FTA는 3국간의 투자를 더욱 촉진 할 것으로 기대되고 있다. 이 논문은 한중일 3국간의 투자에 관한 법적체계와 제약요소 및 투자규칙에 관한 연구를 하였다. 3국간의 무역경제 관계와 투자흐름을 검토하고, 이를 배경으로 3국의 외국투자에 관한 법적체계 및 투자규칙에 관한 검토를 통하여 상대국에 있어서 투자에 관한 주요한 제약이 무엇인지, 향후 한중일 FTA는 3국간의 투자를 더욱 촉진하기 위해서는 한중일 FTA 투자 장(章)에 포함해야 할 것이 무엇인지를 제시하고자 하였다. 한중일 FTA는 3방향의 투자 흐름을 원활화하고 3국간에 투자자와 투자보호를 강화하기위한 효과적인 수단이 될 것이다. 이 점에서 향후 한중일 FTA 투자 장은 내국민 대우, 최혜국대우, 특정조치의 이행요구의 금지 및 경영진이나 이사회의 국적 요건, 자금의 이전, 세이프가드 조치, 수용 및 보상, 손실에 대한 보상, 공정 형평 대우, 투자자 대 국가의 분쟁 해결 및 3국 간 합의 된 다른 요소를 포함해야한다. South Korea, China and Japan is struggling for a new economic growth and facing new challenges and difficulties in foreign investment. In this paper, I Studied on the Legal System and Limits or Rules on the Investment Between Korea, China and Japan. First, FTA between Korea, Chin. The trade and economic relations and the investment flows between the three countries were examined. Based on the background of the three countries, it has been studied on the Legal System and Rules in the foreign investment Between Korea, China and Japan. Based on this, and the following were examined. What are the major limits in the foreign investment Between Korea, China and Japan? In the future, what should be included on the FTA investment chapter in FTA between Korea, China and Japan in order to facilitate more investment? FTA between Korea, China and Japan would be an effective means to strengthen the protection of investors and investment facilitation, and investment flows between the three countries will be activated. In the future, FTA between Korea, China and Japan is expected to further promote investment among the three countries. In this regard, in the future, the FTA investment chapter in FTA between Korea, China and Japan should include NT(National Treatment), MFN(Most-Favoured-Nation (Treatment)), Prohibition of the implementation of specific measures, the nationality requirements of management or the board of directors, movement of funds, safeguard measures, expropriation and compensation, compensation for loss, fair and equitable treatment, the settlement of disputes between foreign investors and investment promotion country(Investor-State Dispute Settlement), and other agreement between the three countries.

Who Else Benefits from CETA? Some Implications of Most-Favoured Nation Treatment

Investors from US and Mexico and other third-party countries will benefit from the Canada-EU trade deal when it comes to investing in Canada, according to a report released today by the C.D. Howe Institute. In “Who Else Benefits from CETA? Some Implications of Most-Favoured Nation Treatment,” respected trade lawyer Lawrence L. Herman concludes that investors from countries that have preferential trade agreements with Canada will be entitled to the same preferential benefits as EU investors under the Canada-EU trade deal.While the recently negotiated trade agreement between Canada and the European Union (EU) will provide greater market access for exports of goods, services and investments from each party to the other, an intriguing question is whether the trade pact will have beneficial side effects for Canada’s other trading partners, by virtue of the “Most-Favoured Nation” rule of internationaltrade law.This E-Brief finds that under the terms of Canada’s WTO membership and Foreign Investment Protection Agreements (FIPAs), the answer is no. However, with respect to investors and investments from the United States, Mexico, Peru, Chile and others with which Canada has preferential trade agreements (PTAs), the answer is yes.

The Scope of the New Exclusive Competence of the European Union with Regard to ‘Foreign Direct Investment’

Article 207 TFEU confers upon the European Union exclusive competence with regard to 'foreign direct investment'. This article argues that this competence may be broad enough to cover most, if not all, the matters usually addressed in a Bilateral Investment Treaty. It covers both the initial 'admission' of investments and 'post-admission' matters, such as 'national treatment', 'most-favoured nation treatment' or 'equal and fair treatment'. Member States retain the right to expropriate the assets of foreign investors, but the Union may subject its exercise to certain conditions. Article 207 TFEU does not cover 'portfolio investments', but the Union may have implied exclusive competence by virtue of the common rules on capital movements (Articles 63-66 TFEU). Competence in the 'field of transport' remains, in principle, 'shared'. Member States may maintain the restrictions 'grandfathered' by Article 64(1) TFEU. It is arguable, but more doubtful, that Article 65(1)TFEU also provides an exception.

Multilateralism and Regionalism from an American Perspective: Parallels and Contrasts with the Langhammer Vision

AbstractThe paper discusses various milestones in the process of multilateral trade negotiations, pinpoints current challenges facing the world trading order, and proposes possible ways out of the persistent impasse. Hufbauer argues that the success of the multilateral approach is at least partly because the GATT departed from the strictly unconditional definition of the most-favored nation (MFN) rule in the late 1970s already. Regional agreements such as NAFTA complemented, rather than hindered, multilateral trade liberalization in the past. The political economy of further multilateral liberalization has become increasingly complicated since countries such as Brazil, China, and India have emerged as relevant players. Against this backdrop, Hufbauer expects regionalism to become the strongest vehicle for delivering liberalization in the future. This could still leave a bright future for the WTO as a “house of plurilaterals”, i.e., agreements on specific issues such as services liberalization with conditional MFN treatment of varying membership.

Is There an Alternative to Intra-European Bilateral Investment Treaties Framework under European Law?

In order to facilitate trade, bilateral investment treaties create a favourable framework for the promotion and protection of foreign investment. The core guarantees present in most bilateral investment treaties include national and most-favoured nation treatment, fair and equitable treatment, free transfer of funds, protection against expropriation and an international dispute settlement mechanism. In the light of the problematic status of intra-European Union bilateral investment treaties, the purpose of this article is to assess whether there is a viable alternative under the European law comparable to the protection of investments given in BITs among member states of the European Union.Common standards of European law offer similar protection in terms of guarantees for free transfer of capital and protection against expropriation. National and most-favoured nation treatment, which are replicated by the EU principle of non-discrimination, has even broader ambit, providing investors with higher safeguards on pre-entry stage of investments. EU law does not contain the same forms of protection, which are covered by fair and equitable treatment clauses in BITs. Nonetheless, EU law does embrace some features attributed to the protection under fair and equitable treatment through the application of omnipresent principles of European law. National court systems of the European Union may not be able to offer competitive procedure of asserting investment claims. Therefore, submission to the national courts instead of arbitration tribunals remains the most contentious difference between BITs and EU law. In relation to this, establishment of a specialised European court dealing with international investment claims is proposed.

The (Unnoticed?) Contradictory Overlapping of International and Domestic Rules on FDI: Getting the Legal Facts Right

This intends to be a very “empirical” paper. We want to let the facts (legal facts, but facts nevertheless) speak by themselves. We simply present them in an organized way and limit to the minimum our own comments. The overall objective is to show, “by getting the legal facts right”, “the (unnoticed?) contradictory overlapping of international and domestic rules on foreign direct investment (FDI)”. The paper is structured in three main sections: the first deals with the regulation of the nationality of juridical persons, taking into account general international law and different particular international rules; the second, with the generalized violation of Most Favoured Nation Treatment (MFN) and National Treatment obligations in the area of FDI; and the third, with the current confusion between movements of capitals and right of establishment, showing how the development of EC/EU law has blurred the clear distinction between them initially established in the Treaty of Rome. In our opinion, at least one main conclusion stems from the analysis of the legal facts. The present state of the international legal framework of foreign direct investment is not satisfactory, because, among other reasons: a) There is a flagrant lack of adequate articulation between general international law and the different specific multilateral, regional and bilateral treaties and agreements. b) The contradiction between the BITs and the GATS cannot go any longer unnoticed and should be addressed; and it seems unacceptable that, in application of existing EU law, EU Member States violate systematically and permanently the BITs to which they are Parties. c) A revision of the approach followed both by the EU legislator and the ECJ seems perfectly well justified in order to allow Member States to regulate the conditions of establishment without having to assume that such a regulation is, in principle, contrary to EU law.

Carbon Leakage Measures and Border Tax Adjustments Under WTO Law

One of the major obstacles toward the adoption of mandatory limits on greenhouse gas emissions is the impact of such limits on the international competitiveness of domestic firms. Limits on greenhouse gas emissions – be they in the form of regulation, a carbon tax or a cap-and-trade system – may impose extra costs on domestic industries. Where foreign firms do not bear similar costs, domestic firms may lose their competitive edge. In particular, with a domestic climate policy in place, imports from countries without mandatory carbon restrictions may gain a price advantage over domestic goods. It is exactly this asymmetry that led the US Senate to reject the Kyoto Protocol , an international agreement that did not require emission cuts from developing countries. The competitiveness impact of climate change policy may play out both at home (on the domestic market) and abroad (on world markets). It can be particularly acute for energy-intensive manufacturers such as the iron and steel, aluminium, cement, glass, chemicals and pulp and paper industries.This paper examines the extent to which domestic climate policy could alleviate this competitiveness concern. More particularly, the paper assesses the limits imposed by World Trade Organization (‘WTO’) agreements on possible competitiveness provisions in climate legislation. Such competitiveness provisions would essentially aim at leveling the playing field by imposing the same or similar costs on imports, as domestic climate policy imposes on domestic production. To level the playing field on world markets, exports could also be exempted from domestic climate restrictions. As WTO Members are internationally bound by WTO law, any competitiveness provision that violates WTO agreements risks a challenge by trading partners before the WTO dispute settlement body. If competitiveness provisions were to be used as a sweetener to enable the adoption of domestic climate legislation, the WTO consistency of such provisions is, therefore, crucial.Section 2 briefly examines the policy reasons for and against competitiveness provisions in climate legislation and discusses recent initiatives to this effect. Section 3 explains how competitiveness provisions can take the form of trade measures, but that non-trade alternatives are also available. Section 4 elaborates on the types of trade restrictions that would most likely not pass WTO muster (import bans, punitive tariffs, anti-dumping duties and countervailing (anti-subsidy) duties). Finally, Sections 5 and 6 provide alternatives that the WTO would most likely accept. First, a carbon tax or emission allowance requirement on imports could be framed as WTO permissible ‘border adjustment’ of a domestic carbon tax or cap-and-trade system (Section 5). Crucially, if such ‘border adjustment’ does not discriminate imports as against domestic products (national treatment), and does not discriminate some imports as against others (most-favoured nation treatment), this type of competitiveness provision could pass WTO scrutiny without any reference to the environmental exceptions in Article XX of the General Agreement on Tariffs and Trade (‘GATT’). Second, even if ‘border adjustment’ would not be permitted for process-based measures such as a domestic carbon tax, regulation or cap-and-trade system imposed on producers, and/or such ‘border adjustment’ would be found to be discriminatory, the resulting GATT violation may still be justified by the environmental exceptions in GATT Article XX (Section 6). Such justification would then most likely centre on whether, under the introductory phrase of GATT Article XX, a carbon tax, emission allowance requirement or other regulation on imports is applied on a variable scale that takes account of local conditions in foreign countries, including their own efforts to fight global warming and the level of economic development in developing countries.