The wto-minus Strategy: Development and human rights under wto law

The WTO-Minus Strategy: Development and human rights under WTO law

Gillian Moon

I am grateful to John Basten, Andrew Byrnes, Jurgen Kurtz, Bryan Mercurio and Rosemary Rayfuse and the anonymous referees for their helpful comments.

Citation

This paper will appear in Human Rights & International Legal Discourse (HR&ILD) Vol 2 No 1, Mortsel, Intersentia. 2008.

Key words

Developing countries

Development theory

Human rights law

International human rights

International trade

WTO law

Abstract

International trade law, human rights law and development studies share the common objective of promoting higher standards of living in the poorer countries of the world. Human rights and development scholars have been critical of the law of the World Trade Organisation (WTO), as implementing a development strategy which dominates and constrains the development strategy options of developing countries but which perceives development only in a narrow, economic sense. In this paper, the different theoretical underpinnings of international trade law and international human rights law are described and compared and their differing conceptions of development are examined from the perspective of the broader development discourse. The package of rights and obligations of developing countries under WTO law (the ‘WTO-Minus strategy’) is also described and examples of significant constraints placed by this package on the development strategy options open to developing countries regarding trade in goods are examined from the perspectives of the broader development discourse and international human rights norms. The capacity of the WTO to incorporate new and multidisciplinary knowledge about development is considered.

Abbreviations

AoA Agreement on Agriculture

GATT 1947 General Agreement on Tariffs and Trade 1947 (as amended)

ICCPR International Covenant on Civil and Political Rights

ICESCR International Covenant on Economic, Social and Cultural Rights

UDHR Universal Declaration of Human Rights

LDC Least-developed country

SCM Agreement on Subsidies and Countervailing Measures

TRIMS Agreement on Trade-Related Aspects of Investment

TRIPS Agreement on Trade-Related Aspects of Intellectual Property

UN Charter Charter of the United Nations

UNCTAD United Nations Conference on Trade and Development

WTO World Trade Organisation

1. Introduction

The World Trade Organisation (WTO) was established at the end of the Uruguay Round of international trade negotiations in 1995. The preamble to the Agreement Establishing the World Trade Organisation (the WTO Agreement) committed the Member countries to an “open trading system” which would “contribute to” the objectives of “raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand.”¹ Although these objectives were not framed with a view to the WTO assuming a primary role as an international development agency, they are nonetheless typical development objectives, albeit selectively chosen and largely economic in nature. ‘Development’ is a somewhat contested term and a much studied phenomenon. The process of development must now occur in a globalising world, “in economies that are technically more complex and more dependent on global integration than before.”²

WTO law sets out to contribute to the achievement of the development objectives of raising standards of living and incomes and ensuring full employment by implementing what is essentially an economic development strategy derived from economic theory. It is argued in this paper that constraints in WTO law regulating trade in goods hinder developing countries from pursuing a development strategy which is focused, first and foremost, on the realization of human rights and fundamental freedoms. Trade policy is a significant part of any development strategy. Supporting the creation of trade policy which does not exacerbate inequality or cause retrogression in developing countries but, on the contrary, stimulates their development while respecting, protecting and promoting human rights and freedoms, will require a change in approach within the WTO. In a nutshell, the WTO will need to accept as both valid and essential a stronger distinction in the treatment of developing and industrialized countries under WTO law and the reintroduction of the principle of ‘non-reciprocity.’ Under that principle, developing countries would be permitted to reap the benefits of trade liberalization by the industrialised countries without being expected to reciprocate in their own countries.
At present, WTO law does not differentiate sufficiently strongly in favour of developing countries, leaving them with too narrow a repertoire of development strategy options and constraining their capacity to pursue a development strategy which is focused on the realization of human rights and freedoms. For low-income, largely agrarian countries, the repertoire should include a comprehensive capacity to shield socially- and economically-vulnerable local producers and communities from the negative consequences of the trade liberalization process. The ability to control the speed, emphasis and nature of the process through the use of trade barriers is essential to being able to control the impacts on individuals, sectors and communities and to ensuring distributional equity. As presently formulated, WTO law restricts this capacity. The repertoire should also include the industrial support strategies (many of which are prohibited or restricted under WTO law) which, historically, have been shown to be powerful stimulators of development. Finally, the development process and repertoire of strategies should be bolstered by a much more useful system of preferential market access for the exports of developing countries than is currently offered. The system should operate within a structure which is fully focused on the exports of greatest value to developing countries, yet is sufficiently flexible to accommodate changes in those exports over time.
Part 2 of this paper traces the historical and doctrinal development of both the economic theory underlying international trade law and the theory underlying human rights law. It considers the nature and elements of the theoretical basis for international trade law from the perspective of the broader development discourse and of international human rights norms. Part 3 identifies three areas of significant constraint imposed by WTO law regulating trade in goods, in conformity with its underlying theory, on the development strategy options open to developing countries and considers their developmental and human rights ramifications. Part 4 reflects on the scope for change in the approach of WTO law towards ensuring that trade strategy enhances development of a kind which facilitates the realisation of human rights and freedoms.