In a review of a collection of the late Robert Hudec's essays in 2000, David Palmeter wrote that Hudec's writings on international trade law ‘are insightful, sensible, eloquent, witty and generally unavailable’ (Palmeter, Reference Palmeter2000). Cambridge's re-issuance of Developing Countries in the GATT Legal System, originally published in 1987, confirms the first four parts of this analysis and, happily, resolves part of the last problem. In an era that sometimes appears to prize complexity over depth in legal writing, and in which the WTO and the GATT principles upon which it was founded are increasingly being held hostage to circumstance, it is both a pleasure and an education to be able to renew acquaintance with this book.

Hudec provides both a history and a critique of the role of the developing countries in the GATT legal system. As a matter of history, Hudec explains that the developing countries were never fully subject to the original GATT obligations and, over the first 40 years of the GATT, became even less so. Hudec argues that this was contrary to the interests of the developing countries because, in his view, the assumption of legal obligations in the GATT/WTO better enables developing countries to achieve their policy objectives and, by extension, to further their growth.

In 1987, Hudec was writing at a time when the Uruguay Round was barely under way and it was by no means clear whether the multilateral trading system, in the form of the GATT, would survive, let alone develop further. Hudec was particularly concerned with the position of the developing countries within the GATT. The increased political influence of the developing countries, including through the Group of 77, did not appear to be leading to commensurate economic development. He therefore set out to examine how the GATT had got into the situation in which it found itself and to consider possible ways out.

Thus, Part I of Hudec's book is a history of the legal relationship between the GATT and developing countries. As Hudec later notes, the provisions of the GATT never imposed an absolute free trade policy. Instead, they required only that (i) governments must use only approved instruments of trade protection; (ii) they must generally use those instruments in a non-discriminatory manner; and (iii) they must be prepared to subject all protective measures to a process of binding and reduction through negotiation (p. 120). As Hudec put it elsewhere, ‘the fact that governments wanted the freedom to disobey was the starting point from which the GATT legal system had to build’ (Hudec, Reference Hudec and Weiss2000: 369, 370).

Hudec explains that the ill-fated International Trade Organization (ITO) Charter, which was completed at the Havana Conference in March 1948, contained extensive concessions to the demands of developing countries for freedom from the legal obligations in the Charter. These concessions included exceptional trade restrictions to protect infant industries in the form of increased tariffs, quantitative restrictions, and obtaining new preferential tariffs. Hudec quotes Clair Wilcox, vice-chair of the US delegation, who felt that these concessions ‘had to be seen to be believed’. Thus, in the separate negotiations of the GATT in Geneva in the autumn of 1947, the United States took a harder line on developing country demands.Footnote ¹ Hudec says the position of the United States was based on the premise (similar to his own) that the freedom to distort market forces was not an advantage, but a disadvantage for developing countries, because it would restrict their ability to develop their trade. Accordingly, the GATT 1947 contained fewer concessions to the demands of developing countries than the ITO Charter – for example, the United States refused to accept any provision for new preferential tariffs in the GATT. Nevertheless, Hudec considers that the United States' position had some practical weaknesses in that, in diplomatic terms, it was difficult to conclude the negotiations without including a ‘welfare dimension’ to the benefit of developing countries (p. 33). Moreover, the United States' position was troubled by internal contradictions – the United States and other developed countries also sought and obtained exceptions for their own producers, such as the right to use export subsidies and to impose quantitative restrictions on agricultural imports. The future members of the European Community also sought and won the right in the GATT to maintain their imperial or colonial preferences. Finally, the United States also sought to establish an organization with universal membership, and was forced to compromise on its free trade objectives in order to ensure that developing countries stayed within the system. Hudec also notes that it was easy for developed countries to grant legal freedom to other countries as part of the negotiations because it did not require the developed countries to pass domestic legislation or to exercise other legal powers. As a result of these competing pressures, Hudec states that the GATT ultimately recognized the basic premise of the developing countries – that their special position justified some departure from the legal disciplines of the GATT and, ‘once it had been conceded, as a matter of principle, that legal freedom constitutes “help” to developing countries, the future was virtually fixed’ (p. 35).

Over the following chapters, Hudec explains how that future evolved. By the 1960s, the bargaining power of the developing countries had improved. There was a demand for the increased use of trade preferences between developing countries that had entered into regional trade agreements that, in Hudec's view, did not come close to meeting the standards of Article XXIV of the GATT. The European Community, the success of which suggested that regional integration was as viable a path to development as the multilateral system, also continued to demand increased preferences. Despite the opposition of the United States, preferences came to be seen as a viable alternative to trade liberalization. Hudec quotes a 1964 GATT Secretariat pamphlet that stated that ‘relatively little reciprocity is expected from [the developing countries] and it is accepted that they must, in general, retain freedom to use their tariff flexibility in the light of their development needs’ (p. 67).

Later in the 1960s, the United States had reversed its position on preferences and began to support a generalized system of preferences (GSP). This led to the waivers, adopted in 1971 and subsequently institutionalized in the Enabling Clause, that permitted developed countries to grant preferences through GSP schemes and developing countries to exchange preferential treatment among themselves. Hudec subsequently provides a sharp critique of preferential programmes as ‘tending to destroy themselves’ (p. 175). Governments produce ‘too much of the product – so many layers, refinements, corrections and qualifications that eventually everyone is worse off than before’ (p. 179). Critics of the Appellate Body's decision in the EC–Tariff Preferences dispute would doubtless agree. Overall, Hudec describes this as a period of pragmatism, which he describes as justifying ‘a decline in the legal discipline of developing countries’ (p. 71), which ‘more or less guaranteed that nothing much would be done to re-assert legal discipline over [the developing countries'] own conduct’ (p. 72).

By the time of the Tokyo Round negotiations in the 1970s, there was frustration among developed countries with both the difficulties of amending the GATT and also with the ability of the developing countries to block change. This led to an approach of negotiating codes governing specific disciplines, such as subsidies, which not every GATT party would have to sign. Only a handful of developing countries did so (p. 87). At the conclusion of the Tokyo Round, Hudec wrote, the GATT was ‘still thoroughly preoccupied with holding the allegiance of developing countries and still making a virtue of the fact that GATT rules [did] not apply to developing countries’ (p. 90). By the time of the original publication in 1987, in Hudec's view, little had changed.

Lawyers writing on WTO law often either fail to take into account the economic questions involved or proceed on the basis of a single (unexamined) economic assumption. One of the many virtues of this book is that Hudec avoids these pitfalls and examines the impact on developing countries of the comparative absence of binding legal obligations under two very different and conflicting scenarios: (i) that those countries wish to pursue liberal trade policies (i.e., a free trade perspective) and (ii) that they consider that trade intervention can be economically beneficial (i.e., a protectionist perspective) (p.144).

In the first case, Hudec considered that GATT legal relationships had the capacity to provide domestic political support for following a liberal trade policy, whereas the absence of legal obligation created an impediment to pursuing a liberal trade policy by ‘intensify[ing] the political forces pressing politicians to use import protection as a solution to most problems’ (p. 148).

Hudec also argues that developing countries pursuing interventionist policies can acquire greater control over their domestic policy and thus greater welfare gains by compliance with GATT rules governing such intervention (p. 150) (including Article XVIII of the GATT, which is now rarely used).

Hudec also does not seek to understate the benefits that developing countries have obtained from a policy of non-reciprocity. He notes that developing countries have benefitted from the welfare obligation inherent in the GATT as it evolved over the first 40 years, but considers that in the absence of legal force this obligation will have limited benefits. He also considers that developing countries are unlikely to obtain new export opportunities from a trade policy based on reciprocity (p. 165) but notes that market access is not the only gain to be made: gains from controlling protection at home must also be considered (p. 170).

Hudec states that the ‘MFN obligation is, above all else, a legal substitute for economic power on behalf of developing countries. By requiring that all governments be treated equally, it has the effect of marshalling the economic power of larger countries behind the claims of small countries’ (p. 180). In typical language, he says that ‘[t]he strongest evidence of this effect is the relentless effort of developed countries to avoid it’ (p. 180).

This all leads to Hudec's two main policy recommendations: First, that ‘developing countries should re-direct their long-term objectives to the strengthening of the GATT's MFN obligation in all respects’ (p. 189); and, second, that GATT contracting parties should ‘establish a regime of developing country legal obligations that would provide support for governments of developing countries in opposing unwanted protectionist policies at home’ (p. 190). Thus, Hudec's fundamental argument is that the assumption of legal obligations in the GATT/WTO better enables developing countries to achieve their policy objectives and, by extension, ought to further their economic welfare.Footnote ² It should be noted that in Hudec's view, the purpose of this is not to eliminate protection, as he acknowledges that there may be a valid case for some protectionist measures, but rather to strengthen the hand of governments in fending off political pressure for excessive protection.

Although Hudec does not develop this aspect of his argument fully, he contends, in effect, that the assumption of WTO legal obligations furthers good governance and the rule of law generally in the developing countries. This is because the basic most favoured nation and national treatment obligations are, at their core, obligations of fairness, transparency, and consistency and predictability of treatment. Many other WTO obligations, such as those in Article X of the GATT and the TRIPs Agreement, also impose obligations that further the rule of law. There is some empirical evidence to suggest that Hudec is correct. For example, Tang and Wei studied the economic consequences of GATT/WTO accessions by developing countries during the period 1990–2001 and concluded that developing countries that undertake substantial reforms as a result of their GATT/WTO accession experience significant increases in growth and investment for a period of about five years after accession.Footnote ³ While this increased growth was only temporary, these economies were permanently larger by about 20 per cent as a result. Tang and Wei also found that the beneficial effects ‘seem more pronounced among countries with poorer governance’.Footnote ⁴ Tang's and Wei's findings would suggest that participation by developing countries, and in particular the least developed countries, in the WTO's legal system is itself one of the most effective forms of development aid available to them.

As J. Michael Finger notes in his introduction to this new edition, Palmeter has previously observed that Hudec is a legal realist in the tradition of Yale Law School where he studied (p. 19) (Palmeter, Reference Palmeter2003). Finger points out the counterpart of realism in economics is institutionalism, which considers that ‘organizations and their formalities evolve rather than are created. They are shaped by repetitions (experiences) perhaps more than design’ (p. 4). Hudec's analysis of GATT law and its relevance or benefit to developing countries through this prism of realism/institutionalism is perhaps best exemplified by this paragraph:

Thus, GATT law has evolved on the basis of both bargains driven and merit recognized. Elsewhere, Hudec wrote that ‘it is not the legal bond per se that holds GATT law together. It is, rather the convergence between what GATT law does and what governments need. The viability of the GATT legal system ultimately rests on maintaining that convergence’ (Hudec, Reference Hudec1999: 174). In this book, Hudec's essential point is that what developing countries need in order to further their trade policy objectives is exactly what GATT law itself does.

A review of a re-issued book must consider how subsequent events affect the author's thesis. Finger notes that developing countries now account for significant shares of world imports as well as world exports and that a number of developing countries have undertaken extensive economic reforms, including exchange rate reform and trade liberalization (p. 19). He points out that developing country liberalization has been in large part unilateral. In Finger's view, many of these developments have taken place outside the penumbra of the GATT system and were instead motivated by factors such as the Asian example. This suggests that ‘the new story line is how developing countries created their own momentum and how this momentum has interacted with the GATT/WTO momentum’ (p. 19). Finger points out that there remains a question of whether the increased adherence by developing countries to GATT/WTO rules generally is a result or a cause of developing countries' changed economic policies.

In addition to the broader questions raised by Finger, it seems reasonable to consider whether Hudec's analysis has continued relevance within the framework of the GATT/WTO system itself. For example, in an era of greatly reduced tariffs and other barriers to trade in goods, do developing countries continue to need the benefits Hudec ascribed to the assumption of binding GATT obligations? The fact that the battleground may have shifted to some extent from trade in goods to trade in services and other policy areas does not appear to render Hudec's analysis obsolete.

Similarly, since 1987 the focus of development concerns has shifted from the developing countries more broadly to the enduring problems of the least developed countries (LDCs), which were not separately addressed by Hudec. It is easy to imagine, however, what Hudec's views would be on the emphasis in the Doha Round negotiations on matters such as duty-free quota-free market access for LDC exports. And, as previously noted, evidence from studies such as Tang and Wei (Reference Tang and Wei2009) support Hudec's recommendations, particularly for the poorer countries.

Other developments also both vindicate Hudec's analysis and illustrate its continued relevance. For example, there are strong arguments that the erosion of the MFN principle through the proliferation of the spaghetti bowl of regional trade agreements has created more losers than winners among developing countries. In addition, developing countries are increasingly participating in WTO dispute settlement, suggesting that they increasingly appreciate the benefits of the WTO legal system (Bown, Reference Bown2009: 63–72). Moreover, WTO disputes involving developing countries are increasingly likely to be disputes between developing countries, suggesting that these countries are coming to appreciate the benefits of binding legal obligations from both sides of the coin.

Finally, one cannot conclude a review of a book by Robert Hudec without paying tribute to his clear and concise writing style. Richard Posner once described the art of judicial writing as follows: ‘we do not think entirely in words, and certainly not entirely in sentences and paragraphs. Inarticulable or even unconscious feelings and impressions fill in around the sentence fragments that form in our minds as we think about a problem. This silent, incompletely verbalized thinking can be insightful … [b]ut it can also be muddy, with the result that when we try to systematize it in sentences and paragraphs that are unmistakable because written down and not just imperfectly remembered, we may find that our confident conclusion is wrong; it “will not write”’ (Posner, Reference Posner1995). It is hard to find an idea in Robert Hudec's work that ‘did not write’. Even where Hudec's ideas are complex, his writing is not.