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

4. Confined thinking and the scope for change within the WTO

In 1990, led by Amartya Sen and Mahbub ul Haq, the UNDP introduced the notion of development as ‘human development,’ measured by human indicators, in contrast to the dominant, but more limited, notion of development as economic development, measured by economic growth. Sen saw human development as “a process of expanding the real freedoms that people enjoy;” thus, development will occur as the “major sources of unfreedom” are removed and peoples’ “capabilities” are consequently expanded.¹⁵⁸ These ideas grew into a concept of human development which fully accepts an indivisible relationship between itself and human rights. Sen presented human development in terms of ‘instrumental freedoms,’ that is, “those which allow us to live lives free from starvation, undernourishment, escapable morbidity, premature mortality, illiteracy and innumeracy.”¹⁵⁹

Building on this work, the United Nations has taken steps to incorporate new understanding and knowledge about how the process of development can be steered to facilitate the realisation of human rights and freedoms for all. In 1997, the then Secretary-General requested all UN agencies and bodies to mainstream human rights into their activities and programmes.¹⁶⁰ Many UN agencies moved to adopt a human rights-based approach to their development cooperation work and, by 2004, the UN Statement of Common Understanding on Human Rights-Based Approach to Development Cooperation and Programming had drawn them together in a relatively consistent approach. Under the Common Understanding, it was agreed that all UN programmes of development co-operation and assistance should aim to “contribute directly to the realization of one or several human rights.”¹⁶¹ It was also agreed that international human rights standards should guide all development cooperation and programming in all sectors and at all phases, including all development cooperation directed towards the achievement of the Millennium Development Goals. The guiding human rights standards identified in the Common Understanding included “universality and inalienability; indivisibility; inter-dependence and inter-relatedness; non-discrimination and equality; participation and inclusion; accountability and the rule of law.”¹⁶² The United Nations Development Group observes that the human rights-based approach,
“leads to better and more sustainable outcomes by analyzing and addressing the inequalities, discriminatory practices and unjust power relations which are often at the heart of development problems. It puts the international human rights entitlements and claims of the people and the corresponding obligations of the State in the centre of the national development debate.”¹⁶³
To a large extent, the rights-based approach to development had grown out of frustration at the “failures of contemporary processes of globalisation to resolve fundamental problems” of poverty, marginalisation, social injustice and social exclusion. The challenge of past failure was picked up by the World Bank under James Wolfensohn’s presidency at the end of the Uruguay Round. After undertaking extensive reviews and analyses of its past development assistance policies, particularly its emphasis on traditional or neo-liberal economic solutions, the Bank moved to a more holistic approach, with a strong focus on poverty-reduction. It began to support developing countries “to direct their own development strategies” and it “mainstream[ed]” the involvement of civil society, gender awareness and development perspectives.¹⁶⁴ In greater harmony with international human rights norms and conceptions of development, the changes were “underpinned by a commitment to inclusion, … partnerships, sustainability and institutional excellence.”¹⁶⁵
Although the depth of change within the World Bank and to its programmes may be questioned, the WTO has not displayed a similar interest in utilising contemporary knowledge to improve its understanding as to how international trade law might better support human rights-based development in developing countries. The Uruguay Round of trade negotiations can be seen as a missed opportunity to modernize and advance trade theory and its strategic implementation to take advantage of new knowledge gained since the end of the War about, and deepening understanding of, development needs, processes and effective strategies. While it must be acknowledged that attempting to make fundamental changes to WTO law and the WTO-Minus strategy would be fraught with political difficulties, it is also evident that the WTO itself is not sufficiently open to new knowledge and understanding. Although “[m]ainstream policy economics has been gradually lowering its claims about the positive impact of trade [liberalisation] on development and poverty reduction,”¹⁶⁶ WTO law and the WTO-Minus strategy remain firmly premised on the efficiency model and the economic dimension of development.
This has contributed to the stalling of Doha Round negotiations, which are mired in disagreement about development – its definition, its relationship to poverty and human capabilities as well as to economic growth, its links with trade (particularly when levels of development within a developing country vary greatly) and the most appropriate role for industrialised countries in supporting it globally. To become an effective, contemporary institution, the WTO must take a great leap forward, so that it “serve[s] no longer as an instrument for the harmonization of economic policies and practices across countries, but as an organization that manages the interface between different national practices and institutions.” The “manner in which the international trading regime and the WTO function” should be “reinvigorated” by a new focus on “development and poverty alleviation, along with a nuanced, empirically-based understanding of the development process.”¹⁶⁷ Development thinking has been coalescing for many years around ‘bottom up’ approaches, “delinking” international trade strategy from the theory of neo-liberalism and setting a high priority on compliance with human rights norms.¹⁶⁸ These are the paths indicated for the international community in creating trade law which enhances, rather than constrains, the development strategy options of developing countries and which facilitates the realisation of human rights and fundamental freedoms.

1 Marrakesh Agreement Establishing the World Trade Organization, opened for signature 15 April 1994, 1867 UNTS 3 (entered into force 1 January 1995), preamble (the WTO Agreement).

2 J. Remenyi, What is Development?, in: D. Kingsbury, J. Remenyi, J. McKay and J. Hunt, (eds.) Key Issues in Development 22 (Hampshire: Palgrave Macmillan, 2004).

3 B. Hettne, Development Theory and the Three Worlds: Towards an International Political Economy of Development (Essex: Longman Group Ltd, 1995).

R. Potter, Theories, Strategies and Ideologies of Development, in: V. Desai and R. B. Potter (eds), The Companion to Development Studies 61-62 (London: Hodder Arnold, 2002). Bjorn Hettne also identifies a third, related field of activity. Development ideologies influence development agendas to reflect different social, economic, political, cultural, ethical, moral and religious goals and objectives: Hettne, ibid, p. 62.

4 Potter, ibid, p. 61.

5 Id.

6 Potter, ibid, p. 62-3. Potter also suggests a helpful classification of development theories into four major categories. The first is the classical-traditional approach, which emphasises the economic dimension of development. Dominant in this approach are theories of dualism, modernization and neo-liberalism. WTO law is based on economic theories which fall within this category. The second is the historical-empirical approach, with theories purporting to build upon what has happened in the past. These include the Mercantilist model and transport theory. The third is the radical political economy-dependence approach, embracing neo-Marxism, structuralism, modes of production theories and the Latin American dependency theories. The fourth are the so-called ‘bottom-up’ and alternative theories, which emphasise the ideal.

7 United Nations Charter art. 55. Under art. 56, the international community pledged itself to act with the UN for the achievement of the aims in art. 55.

United Nations Charter art. 1, para. 2.

8 United Nations Charter art. 1, para. 3.

UNGA, Universal Declaration of Human Rights (A/RES/217 (III)). As a resolution of the UN General Assembly, not a treaty, the UDHR is not binding on states.

9 Preamble to the UDHR; Preamble to the United Nations Charter.

10 Self-interested motivations included avoiding an economic recession as the military sector of their economies wound down following the end of the War. In addition, with the start of the Cold War, international trade and development assistance became “major weapon[s] in the battle to gain support for [the] ideologies and systems” of the United Sates and the Soviet Union. These ‘self-interest’ factors made widespread economic development and international economic engagement by the non-Communist countries of central interest to the post-War Western alliance: Remenyi, supra note 2, p. 23

11 P. Streeten, Development Perspectives 61-2 (London: Macmillan, 1981), cited in: Hettne, supra note 3, p. 10.

12 T. Binns, Dualistic and Unilinear Concepts of Development, in: Desai and Potter, supra note 4, p. 75.

13 Id.

A. Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (The Strand, 1776), cited in: K. Willis, Theories and Practices of Development 32-3 (London/New York: Routledge, 2005).

14 Willis, supra note 17, p. 33.

15 D. Ricardo, On the Principles of Political Economy and Taxation Chapter 7 (London, 1817).

J. L. Dunoff, The Death of the Trade Regime, 10(4) European Journal of International Law 737 (1999).

16 General Agreement on Tariffs and Trade, opened for signature 30 October 1947, 55 UNTS 187 (entered into force 29 July 1948) (GATT 1947).

17 The Allies also saw the need to make capital available for development. At the 1944 Bretton Woods conference, the World Bank was established to “generat[e the] consistent flow of foreign capital necessary for financing the reconstruction and development of the world’s economies devastated by the Second World War”: M. R. Islam, International Trade Law 79-80 (Sydney: The Law Book Co Ltd, 1999). The role of the International Monetary Fund (the ‘IMF’) was to ensure a stable international payments system to support trade and investment, and consequently, stable development. The planned third body, the International Trade Organisation, failed ultimately to be established because of political opposition from within the United States. As a consequence, until 1995 when the WTO was established, the law of GATT 1947 was applied in the process of international trade liberalisation but there was no international body to oversee the process.

Dunoff, supra note 20, p. 737.

18 Ibid, p. 745.

19 V. Gauri, Social Rights and Economics: Claims to Health Care and Education in Developing Countries, World Bank Policy Research Working Paper 3006 15-16 (World Bank, Development Research Group, March 2003.

20 B. Hettne, Current trends and future options in development studies, in: Desai and Potter, supra note 4, p. 8.

21 Hettne, supra note 3, p. 33.

22 Ibid, p. 40.

23 J. L. Dunoff, Does Globalization Advance Human Rights? 25 Brooklyn Journal of International Law 138 (1999).

24 D. McRae, Developing Countries and ‘The Future of the WTO’ 8(3) Journal of International Economic Law 609 (2005).

25 At this time, ordinary developing countries were offered accession to GATT 1947 “on essentially the same terms as developed countries:” B. Hoekman and M. Kostecki, The Political Economy of the World Trading System: The WTO and Beyond 386 (New York: Oxford Universty Press, 2001).

26 Islam, supra note 22, p.25.

27 Hettne, supra note 3, p. 41.

28 S. Edwards, Openness, Trade Liberalization, and Growth in Developing Countries 31(3) Journal of Economic Literature 1358–9 (1993).

29 Desai & Potter, supra note 4, pp. 94-106.

30 Islam, supra note 22, p.26.

31 United Nations General Assembly Declaration on a New International Economic Order, Resolution, A/RES/S-6/3201 May 1974.

32 GATT Decision of 8 November 1979: Differential and More Favourable Treatment, Reciprocity and Fuller Participation of Developing Countries (LT/TR/D/1). See also Hoekman and Kostecki, supra note 31, p. 386–7.

33 J. A. Elliott, Development as Improving Human Welfare and Human Rights, in: Desai and Potter, supra note 4, p. 45.

34 B. Hettne, Current Trends and Future Options in Development Studies, in: Desai and Potter, supra note 4, p. 7.

35 Binns, supra note 15, p.77.

36 Ibid, p. 76. Emphasis added.

37 Ibid, p.77.The ‘growth centre model’ posed by French economists of the 1940s and 1950s was very similar to that of Myrdal and Hirschman. “In essence, the growth centre model depicts the transmission of economic prosperity from a centre, most commonly an urban-industrial area” which spreads out to stimulate other areas: ibid, p. 77.

38 J. McKay, Reassessing Development Theory: Modernization and Beyond, in: Kingsbury et al, supra note 2, p. 53.

39 Elliott, supra note 39, p. 46.

40 Id.

41 This categorisation of states’ obligations was reaffirmed in Paragraph 1 of the UN Vienna Declaration and Programme of Action, A/CONF.157/23 12 July 1993

42 International Covenant on Economic, Social and Cultural Rights, art. 2(1).

Committee on Economic, Social and Cultural Rights, General Comment 3, The nature of States parties' obligations (Fifth session, 1990), U.N. Doc. E/1991/23, annex III at 86 (1991), para. 9.

43 Ibid, para 10.

44 Ibid, para. 9.

45 S. Osmani, Globalisation and the Human Rights Approach to Development, in B. Andreassen and S. Marks (eds.) Development as a Human Right 265 (Cambridge, Massachusetts: Harvard University Press, 2006)..

46 Elliott, supra note 39, p. 45.

47 F. J. Garcia, The Global Market and Human Rights: Trading Away the Human Rights Principle, 25 Brooklyn Journal of International Law 67 (1999)7.

48 Ibid, p. 70.

49 Ibid, p. 72.

50 Ibid, pp. 72-73.

51 D. Yergin and J. Stanislaw, The Commanding Heights: The Battle for the World Economy 391 (New York: Touchstone, 2002).

52 Elliott, supra note 39, p. 47.

53 Ibid, p. 40.

54 Id.

55 Hettne, supra note 4, p. 8.

56 T. Palley, From Keynesianism to Neoliberalism: Shifting Paradigms in Economics, Foreign Policy in Focus Special Report 3 (May 2004).

57 Ibid, pp. 3–4. Neoliberalism is closely aligned with the economic approach known broadly as monetarism, which became dominant at this time under Thatcher and Reagan as well as in a “’counter-revolution’ in development economics:” Hettne, supra note 3, p. 114. However, the general view is that the monetarist experiment failed; economic policy-makers have returned to interest rate based-policy: Palley, ibid, p. 5.

58 The international financial institutions required economic reforms under Structural Adjustment Programs to be implemented in return for further financial assistance to developing countries.

59 J. Williamson, Did the Washington Consensus Fail? (Institute for International Economics, 2003)