International Law & Trade - Law Firms Global Competition: An Accelerating Trend

Saturday, October 1, 2005 - 00:00

Editor: Would each of you tell our readers something about your professional experience?

Georgi: Until joining Arent Fox last week, I was a one-firm lawyer. I had been at Coudert Brothers for fifteen years following graduation from Cornell Law School. I was attracted to Coudert by its international practice, which allowed me to develop my own international trade and exports clientele and practice. I was attracted to Arent Fox for a similar reason: its highly regarded and longstanding international trade practice.

Gurley: I have been practicing international trade law for 20 years. Arent Fox was one of the first big firms in Washington, DC to have a significant international practice. In fact, I was at Arent Fox from 1997 to 2001. I left because of a client conflict. When Arent Fox approached me a few months ago, it became very apparent to me that the firm would be a great platform for me to continue practicing international trade. When I was first here they had a terrific trade department, and I think it is even stronger now.

Editor: Please tell us about your practice. How has it evolved over the course of your career?

Georgi: As a young associate at Coudert, I dabbled in a number of different fields, including trade, antitrust litigation and even environmental law. But in 1994 - when I was still a junior associate - all of the partners in the DC office who were engaged in international trade and export compliance work left in one day. I had to make a decision whether to follow or stay and develop my own trade practice. Coudert was very supportive, and, with the help of some distinguished practitioners such as John Gurley, I created a solid international trade and compliance practice. Over time, my practice has turned increasingly toward the compliance side, specifically export controls and embargoes. This trend has accelerated since 9/11 and now I spend the majority of my time on export control and sanctions work.

Gurley: My own practice has also evolved over time. As a young associate, I worked primarily on antidumping, customs and Section 337 IP cases. I was also involved in civil litigation and some commercial transactions. My focus now is primarily on trade and customs matters. I also do a significant amount of work before the Office of United States Trade Representative as well as the Office of Foreign Assets Control.

At the beginning of my practice, many of the cases I was involved with were in Western Europe. Now, with the changing nature of global trade, much of our work is in Asia, Russia and Central and Eastern Europe.

Editor: You are both new to Arent Fox. Nevertheless, can you tell us something about the firm's international trade practice and how your practice fits into it?

Gurley: Arent Fox has long had a very sophisticated international trade department, but no law firm is going to have expertise in every jurisdiction. Our practices are complementary in the sense that we possess a great deal of expertise with respect to Russia, China, India and Thailand. That serves to provide Arent Fox with a certain momentum in these arenas. In addition, I think my work with the United States Trade Representative enhances the firm's standing in this area. We also bring depth to some of the key industries where trade cases are ongoing, such as steel, bearings and seafood.

Georgi: My outbound export compliance practice fits very nicely with the inbound customs compliance practice of David Hamill, who is with Arent Fox, as well as the substantial government contracts practice here. And I am pleased that I will be able to work with the firm's white collar defense attorneys, John Nassikas and Steve Kimelman.

Editor: What are the key issues that you face today in a global customs practice?

Gurley: With respect to customs, the world has tried to become harmonized in the sense of customs rules and classifications becoming similarly enforceable in every jurisdiction. The reality is that each of the major jurisdictions can interpret the law and regulations in its own way. We try to help clients navigate all the different customs systems. We cannot simply impose the American point of view on every jurisdiction, and we seek the advice of local counsel when necessary to make sure our advice is correct.

Georgi: On the embargo side, there is constant movement on U.S. export controls and embargoes. A number of countries are subject to economic embargoes, and changes to both U.S. law and policy for trade with these countries are continuous. For example, North Korea reached a tentative compromise with the United States and other countries to give up its nuclear weapons programs in exchange for aid, diplomatic assurances and security guarantees, and promises by the West to consider the country's demand for a light water nuclear reactor. This could potentially lead to a further relaxation of the controls on exports to North Korea.

Other countries are constantly shifting as well. The Iranian President spoke at the United Nations just recently, and his speech has served to support a hardening of attitudes among the Western countries. Iran represents one of the more complete embargoes, with the exception of some medical devices, medicines and agricultural products. North Korea is much less of an issue in this regard than either Iran or Libya because the latter two countries have the means of paying for their imports. While Iran remains an important concern to U.S. exporters, Libya has declined somewhat as a consequence of the lifting of the Libyan embargo, although there are still anti-terrorism controls in place. The raising of embargoes in one place and their imposition elsewhere only tends to increase export control advice work.

Georgi: Speaking of Libya, there is certainly an increase in licensing work because licenses for many items will now be granted. But there is a decline in compliance work because there is no longer a complete embargo on trade with Libya, only controls on the export of certain products.

Editor: How about the import of goods into the U.S? Can you give us your thoughts on some of the issues that continue to plague our relations with Canada?

Gurley: As you know, one of our Arent Fox partners, Matt Clark, represents the government of Quebec in one of the longest-standing trade disputes, that concerning lumber. In NAFTA we have a free trade agreement with Canada. Nevertheless, because Canada is our single most important trading partner, there are bound to be trade disputes on a regular basis. While there has been a strong general effort around the world to lower trade barriers and promote free trade, that trend brings difficulties in its wake. Domestic industries across the world - and ours are no exception - are increasingly anxious to protect their own markets.

Editor: Over the course of your career each of you has seen two contradictory developments: the increasing integration of the world's economy, and the appearance of a series of security concerns that threaten, among many other things, our ability to do business in the global arena. Can you share with us your thoughts about the tension here?

Georgi: I think there is always going to be some tension between the integration of the world's economy and security concerns. However, in my view, security concerns have not historically trumped globalization. In fact, the contrary has occurred. In the 1990's, for example, there were tight U.S. export controls on computers that today are so antiquated that they have virtually lost all relevance. Our allies, and not a few of our adversaries, are capable of doing most of the things that we do today, at least in the dual use area. There is a constantly moving edge of technology that the U.S. and its allies can effectively control, and as the edge moves outward more and more items behind the edge become decontrolled.

Gurley: In the area of customs, the law has become much more complicated as a consequence of post-9/11 security concerns. While we are in the process of working toward a system that allows importers and exporters to receive or send their goods with a minimum of bureaucracy, the enhanced concern for security has meant that companies have had to introduce more rigorous systems internally to meet the concerns of the authorities for global terrorism. That does not exactly reflect a tension between security and globalization, but it can result in some unanticipated side effects. U.S. companies, for example, are not above utilizing national security as a means of advocating their particular agendas. The Buy America rules constitute a good example of this, and they are still in place in a variety of areas, most particularly with respect to defense applications.

Editor: During the past ten years or so China has emerged as a major player in the world trade arena. What has this meant for your practice?

Gurley: With respect to my practice, the emergence of China has meant a shift away from Western Europe and toward China. At least a quarter to a third of my practice today is concerned with China. To the extent that China is now the largest exporting country in the world, everyone is affected, but the tremendous investment in that country on the part of U.S. companies has meant that law practices such as ours are increasing focused on what is an accelerating two-way traffic.

Georgi: The increased investment by U.S. companies in China has resulted in a whole new raft of export control and compliance issues which companies must address. That has attracted more and more attention from international trade practitioners such as John and me, and that trend is only going to accelerate with the passage of time.

Editor: How do you see all of this evolving over the next few years?

Gurley: I think the world is going to become increasingly competitive. China is certainly becoming a massive presence on the stage of world trade, but others are going to be heard from, and sooner rather than later. India is making great strides in terms of technology, and their ability to export is formidable. India's ability to import is also on the increase. Brazil has always been a major player in the Latin American arena and is quickly extending its reach beyond the region. There are other emerging countries in Latin America and Southeast Asia, and they will all contribute to the increasing competitiveness of international trade.

Editor: Given this evolution, how do you see your practices changing over the next few years?

Gurley: The activities of our clients are becoming increasingly global, and they carry on their activities not just in one or a few countries, but in many. What I see developing is a challenge for a company to develop an integrated, company-wide strategy with respect to trade policy - and one that acknowledges the inevitability of trade disputes - in an environment of conflicting interests, even within the company. As a result of this development, I see practitioners with this particular expertise becoming even more important contributors when companies develop their own international trade policies.

Georgi: I would add that as U.S. companies take more and more of their activities abroad, an increasing volume of U.S. law accompanies the exodus. More and more companies are dealing with multiple export control regimes simultaneously using their experience with U.S. export control laws and enforcement to handle these issues. I think we are going to be very busy.