This book is one of several recent analyses on developing countries in the WTO. One is tempted to say: finally! These countries are now two-thirds of WTO's membership. Many played a significant role in GATT and in the Uruguay Round. But that history was mostly ignored. This book is a most welcome addition to a growing literature and should be required reading for those interested in – and concerned about – the multilateral trading system.
The editors provide an excellent overview of the constituent parts, covering market access, legal flexibility, special challenges, and process reforms. The authors of the different chapters include experts from developing countries and this is important and welcome. The publisher, the UNU (the United Nations University) should be encouraged to extend this effort in further publications. Perhaps cooperation with UN institutions could contribute more special country studies to improve policy analysis. Specific knowledge is essential and there is a serious gap in our information about developing countries. We will return to this issue later.
In this review, rather than cover each of the analytical parts (the overview is excellent in that regard), I prefer selecting a few ‘new’ new or systemic issues. This is not meant to ignore the important chapters on, for example, market access or regionalism, but simply to recognize the limits of space. Further, I should underline that for the book as a whole the great merit is to raise many questions, but not to pretend there are many agreed answers.
While it is a bit of exaggeration to term the WTO and human rights ‘new’ new issues – they've been discussed for several years – Chapters 9 and 10 are surprisingly prominent. In my own experience in the trading system, I have not found any developing country officials who were at all interested in the subject. So it could well be a ‘new’ new ‘challenge’ as categorized in this book.
The attack on the WTO as ‘undemocratic’ is an NGO clarion call that was a key feature at Seattle and an important part of the corporate anti-globalization movement. But the human rights arguments are largely technical and Ernst-Ulrich Petersmann is the most distinguished proponent of the mission to transform the WTO. He argues that WTO law fails to protect individual participants in international trade and there is thus a need for ‘constitutionalizing’ WTO policymaking to protect citizens' human rights. He cites as a model (as is often the case among writers of European origin), European economic law ‘founded on the principles of liberty, democracy, respect for human rights and fundamental freedoms which are common to the Member States’. In stark contrast the WTO treats citizens as ‘mere objects’ with no rights to hold their governments accountable and, after a lengthy review of the evolution of international law, Petersmann asserts that the WTO must include the human rights obligations of the UN Charter and other related UN instruments. If not, as the UN Commission on Human Rights pointed out in a report, the WTO will be branded a ‘veritable nightmare’ for developing countries. More recent reports on the WTO have been more polite and the UN High Commissioner for Human Rights (UNHCR) has spelled out a list of reforms in great detail, and, indeed, asserts that the WTO rules are ‘flexible’ enough to prevent conflict with human rights. The problem is the WTO – its diplomats and judges and the like.
So what is to be done? As I have argued elsewhere on similar issues, there are two routes to WTO ‘reform’: legislative and litigious. The first is impossible at present so Petersmann makes a number of legalistic proposals that I very much doubt developing countries would accept. The model of ‘laissez-faire; laissez-reglez: laissez-litigez’ that guides rich country civil society is not accepted by their citizens. And while enhancing developing countries' legal capabilities as he suggests and exploiting the Trade Policy Review Mechanism (TPRM) for ‘deliberative democracy’ are excellent proposals, more specific structural reforms of the WTO are required if human rights are to be respected. Further, the relevant forum for protecting human rights should be the national policy process, and the TPRM could be the place to start.
In Chapter 10, Jens Pössel tackles human rights, sustainable development, and trade. The WTO must cover all. But the theme of the analysis concerned the human rights approach to sustainable development and does not include environmental protection. This is a rather unusual approach so I have termed it ‘new’ new.
As is often noted, the Marrakech Agreement that established the WTO included a reference to sustainable development in the preamble (I do not know which NGO was so successful in getting it in). I wonder if developing countries understood the implications of the preamble or the meaning of the term, which is a masterpiece of creative ambiguity. (I would hear some developing country officials muttering in the corridor of the WTO that the NGOs prefer support for elephants over people). Pössel also cites the objectives of sustainable development in the Doha Declaration and that the multilateral trading system must protect the environment. Thus, according to Pössel, the WTO ‘has headed toward becoming a World Trade and Sustainable Development Organization’. This rather differs from the conventional view about the WTO that it is about trade and not development and the environment. Nonetheless, the Doha Development Agenda was the first in the trading system to include issues related to trade and environment. And it also included a purely environmental issue: ‘to clarify and improve WTO disciplines on fisheries subsidies, taking into account the importance of this sector to developing countries’. But even if these Doha Agenda items were completed, this would scarcely nudge Pössel's objectives of the human rights dimension of sustainable development.
Pössel recounts the history of the UN Declaration on the Right to Development of 1986, beginning with UNCTAD and the New International Economic Order of the 1970s (greatly aided by the energy crisis). He provides an account that the Right to Development is now customary law, and Pössel asserts that by adding sustainable development to the WTO objectives, the 1986 Declaration is confirmed by the member states. (Not being a lawyer, I'm not in a position to judge.) He starts with a description in some detail with economic rights and what these economic rights mean and how they are affected by trade. He then covers social development and their core, right to food and to health.
So what is to be done to include human rights in sustainable development, a main objective of the WTO for Pössel and others? He does not say except that the WTO must obey the ‘customary law’ of the Right to Development. Finis!
I have little doubt that the human rights issue will ‘enter’ the WTO by the litigation rather than the legislation route. Indeed it already has, in a 1990 declaration of a ‘dispute’ settlement panel, which included a statement that the multilateral trading system is not just composed of States but also of individual economic operations. But so far it has not been followed up. I doubt that will continue. So I hope that this book will be followed by discussions, although, alas, there is no policy form at the WTO. Without ‘legislate’, ‘litigate’ is the route.
The book covers a number of other issues of concern to developing countries such as SDT (Special and Differential Treatment), Dispute Settlement, and Trade Facilitation. The importance of the wide and growing knowledge gap between the rich and the developing countries is noted in many chapters, but the need for a more coherent institutional arrangement between the WTO and the World Bank to deal with infrastructure and policy capacity is required. It is very useful that in his chapter on SDT, Constantine Michalopoulos proposes a ‘World Trade Fund’ for capacity-building to replace the flagging IF (Integrated Framework). Sampson's chapter on services is excellent on domestic policy reform (but why no international progress after Cancun I wonder?) Graham Dutfield describes a Development Impact Assessment of WIPO that would consider the effect of norms on a range of domestic development objectives and might be adopted by the WTO – by specific negotiations. Other domestic policy proposals also cover legal areas such as dispute settlement. And, again, the need for building the capabilities of the legal infrastructure is stressed. Development economics is undergoing significant change as a recent article in the Economist describes. One school of ‘random experiments’ seeks to provide the ‘hard evidence’ for micropolicy. Others emphasize establishing and monitoring local projects to more fully comprehend the development process in a specific context. Some of the studies in this book fit into this new approach and more need to be launched. Of course the book is concerned with trade as well but development has been neglected in the trade paradigm because the GATT club was not very interested. The book is a very welcome beginning but, as we know, there is a long road to travel.
I want to end my review with the last chapter by Nora Neufeld on WTO negotiations on trade facilitation, an amazingly successful negotiation led by developing countries and linking trade and development. And cooperation with developed countries and least-developed countries. I was wrong: this is the ‘new’ new issue. If Doha fails, this brilliant experiment on integration of trade and development will be a much more serious loss than facilitating trade by eliminating red tape.
