By Upendra D. Acharya¹

Assistant Proffessor of Law, Gonzaga University School of Law

 

A protestor makes his point Photo courtesy

Throughout recorded history, societies have been afflicted with inequalities among peoples and countries, violence, war, power greed of powerful nations, gross violation of human rights, and so on. However, the international community, while experiencing such tragic events and behaviors by its members, has begun addressing these issues through international law. In the process, international law has at times been used as a tool to legitimize the actions of victors and powerful.

 

The heart of such problems is the use and abuse of international law by western countries, with developing countries relegated to the role of observers. The root of this inequality lies on the level of development. Disparate levels of development is a core cause of the bitter events that have challenged societies at present and historically. The concept of development has been made to disappear in the trade and environment debate. The notion that development as a right, with sustainable development as a practice style or discipline of that right, has been lost in the name of sustainable development. Whereas development is an ultimate goal of human being (therefore substantive right) and sustainable development is a tool to realize fairness and justice to the present and future generations (procedural limitation to the substantive right).

 

Trade against Development

 

One of the underlying principles of the World Trade Organization (WTO) creation can be viewed as promotion of international geopolitical stability.² All of the developing countries that are members of the WTO are hopeful that the WTO will bring higher standards of living for the billions of people of those countries who are living on less than a dollar a day and reduce, if not eliminate, economic inequality among nations. Unfortunately, liberalized trade under the WTO has not benefited poor countries, but has rather become an instrument to maintain the hegemony of powerful countries and device by which they control world agenda.³ Despite disparity among nations, market conditions and the flow of artificial capital,⁴ the world already has embraced the universal truth of the value of a free market and globalization.

 

However, the WTO supports the concept of sustainable development as one of its objectives.⁵ Trade promotes important aspects of economic development, including trade related technology transfer, access to new products and product ideas, competition on the global market, and comparative advantage. The International community uses trade concepts to support the idea of development. One of the efforts have been made in these institutions to realize the idea of development. One such effort is the creation of the United Nations Conference on Trade and Development (UNCTAD),⁶ which was created to make a shift from import substitution and reliance on foreign aid to increasing exports and trade by developing countries.⁷ The overall concept of the development, as perceived by the WTO, is that pursuit of economic growth will bring development and will reduce the absolute poverty in underdeveloped countries.⁸ Among other deeply rooted factors, important factors weighting the scales in favor of developed countries are a nation’s existing infrastructure and its capacity to international trade, the state and cost of institutional structures supporting a country’s economic order and competitiveness, and political inequality among nations.⁹ In such a situation, development remains only a dream and the hegemonic style of the WTO system becomes the reality.

 

The idea of sustainable development was initially incorporated into WTO rules and decision--making¹⁰ because it was essential to maintaining the WTO’s functional  legitimacy.¹¹ Now it has become a core component of all international legal approaches and one of the functional missions of all international organizations. Is it a substitute for the concept of development--do we no longer deal with development but only sustainable development? The trade rules as prescribed by the WTO/GATT, though member-driven, are directed toward the interests of the traders, not toward the interests of members. The nature and transaction of trade under the WTO-trade regime gives priority to individual traders;¹² member countries’ benefits and success within the WTO are achieved through the “improved conditions of these private operators.”¹³ (individual traders). The WTO has focused on an “enlightened mercantilist”¹⁴ approach where trade expansion is obvious and development is nebulous, since development can be achieved only after trade and business interests are satisfied.¹⁵ Professor Robert Howse strongly argues that the WTO is only for the trade people and the trade rules, and it is not concerned with the human rights and development issues.¹⁶

 

The shift from a recognized right to development to the concept of sustainable development is a convenient strategy to bolster the WTO’s support of the international status quo where no equitable concept provides legitimacy. The WTO claims that the trade regime is designed to promote development and that the WTO cares for human conditions in the world by promoting aid for trade.¹⁷ But existing factors work against even the concept of free trade as envisioned by the WTO regime (the proactive development agenda within the WTO regime is a day dream).

 

Agricultural protectionism, dirty tariffication, and subsidies are the main reasons that the Doha Development Agenda (DDA) failed and, also proof that developed countries and the WTO are not serious about the real development of the underdeveloped countries.

 

To be continued.

 

Footnotes

 

^{1 Assistant Professor of Law, Gonzaga University School of Law; LL.B. Nepal Law Campus; M.C.L. University of Delhi, College of Law; LL.M. University of Utah, College of Law; S.J.D. University of Wisconsin Madison Law School.}

 

^{2 The creation of the European Community contributed to resolve the differences between France and Germany through common steel and coal markets. Similarly, WTO can be viewed as a tool to resolve the differences among nations in the world. There are more than 350 cases between countries that have been resolved through the WTO Dispute Settlement System.}

^{http://www.wto.org/english/tratop_e/dispu_e/dispu_status_e.htm}

 

^{3 Such exclusionary Green Room meetings are used to build consensus among the few which is then presented to the majority as a take-it-or-leave-it package. It is clearly an undemocratic practice and in violation of the one-country, one-vote and the consensus system of the WTO.}

 

 ^{4 Credit economy which is based on expected and anticipated financial capacity and condition that underdeveloped countries can hardly compete.}

 ^{5 Infra, Note 25.}

 ^{6 http://www.unctad.org/Templates/StartPage.asp?intItemID=2068}

 

 ^{7 This can be viewed as a shift in the international economic system because some economists (Gunnar Myrdal and Raul Prebisch) have argued formerly (?) international trade was operated as mechanism of international inequality.}

 

 ^{8 The WTO was established on the basis of a consensus system and the anticipation that free trade and consistent regulatory policies on the part of the WTO deliver unquestionable advantages, particularly to the developing countries. However, the historic Marrakesh meeting did not address economic, political, institutional and social inequality among nations, all of which have made it impossible to transcend the orthodox approach of hegemonic style in the international trade system.}

 

 ^{9 Factors relating to international trade that have contributed skepticism about the existing WTO system have been discussed by various authors. See, Frank Garcia, Trade, Inequality, and Justice: Toward a liberal Theory of Just Trade, 23 (2003). The author suggests some factors as characteristics of small economies in international trading system, which are-small size of population and territory, GDP, dependence on external trade, high level of imports, dependences on trade taxes, limited human resources and technical expertise, undiversified economic base etc. See also, Weber Barral, “Trade and Development(s): Different Approaches. (How to Make the Doha Round a Genuine “Development” Round) (Proceedings of the One Hundredth Annual Meeting of the American Society of International Law: A Just World Under Law).” Proceedings of the Annual Meeting –American Society of International Law 100 (Annual 2006):217-220.}

 

^{10 One of the objectives of the WTO is sustainable development as prescribed in its Preamble, which refers in part to “optimal use of the world’s resources in accordance with the objective of sustainable development”. Similarly, the WTO Appellate Body has interpreted Article XX in a manner consistent with the objectives of sustainable development, recognizing that it is no longer possible for the WTO to promote the free-trade goals of the GATT 1994 (such as promoting market access) above all other concerns--e.g., health and environment, and the objectives of sustainable development. See, Report of the Appellate Body on United States Import Prohibition of Certain Shrimp and Shrimp Products, October 12, 1998.WTO Doc. No. WT/DS58/AB/R.see also, Report of the Appellate Body on United Standards for Reformulated and Conventional Gasoline, April 26, 1996, WTO Doc. No. WT/DS2/AB/R.}

 

^{11 When the WTO was negotiated, unlike the GATT 1947, many developing nations, which represented most of the world’s population, participated, so ignoring the term development could have been fatal to the success of the negotiations. The WTO has been characterized as a grand bargain between the North and the South. See, Sylvia Ostry, The Uruguay Round North-South Grand Bargain” Implications for Future Negotiations, in the Political Economy of International Trade Law: Essays in Honor of Robert E. Hudec 285 (D.L.M. Kennedy & J.D. Southwick eds., 2002).}

 

^{12 See, Panel Report on the United States – Section 301-310 of the Trade Act of 1974 Para 7.76. (WT/DS 152/R (Dec. 22, 1999). (The panel discusses the expectations of the WTO and states that the WTO is designed to provide security and predictability for the multilateral trading system, which is composed “not only of states but also, indeed mostly, of individual economic operators”.}

 ^{13 Id.Para 7.77.}

 ^{14 See, Kyle Bagwell and Robert W. Staiger, The Economics of the World Trading System, 60-61(2005). The authors accuse the GATT/WTO of representing non-state parties. The authors highlight the reason for lowering the tariff is nothing more than value of the market access as seen or evaluated by the private exporters somewhere in the world. As a result, the author claims, governments show their willingness to accomodate something of value to that government from which the exporters operate. See, at xi-xii.}

 

^{15 WTO’s Banana case, where the United States had no banana to export, yet sponsored Chiquita and Dole, representing their interests in the WTO dispute settlement body. As a result, ACP countries lost their benefits due to mutual arrangements between the EU and ACP countries.}

 

^{16 Robert Howse, Mainstreaming the “Right to Development” into International Trade Law and Policy at the WTO, Paper prepared for the Office of the United Nations High Commissioner for Human Rights, High Level Seminar on The Right to Development, Geneva, February 9-10, 2004. The Author states: “The ‘watertight compartments’ view of the WTO, however, remains influential in trade policy circles. One former GATT DG wrote:…”the WTO is not an aid agency.” Or as the WTO Singapore Declaration itself suggested, the ILO is the place for labor issues. Human rights impacts of trade laws and policies are something to be addressed outside the WTO- “we” do the “trade”, they do the “human rights.””}

 

^{17 Doha Ministerial Declaration, 20 November 2001, WT/Min (01)/Doc./1 This is the outcome of the fourth ministerial conference in Doha, Qatar in 2001. In this conference, WTO members agreed to work on new negotiations on different issues, collectively known as “Work Program.” Among these issues were agriculture, services, market access for non-agricultural products, TRIPs, trade and investment, trade and environment, trade and transfer of technology etc. The DDA have not reached an agreement even after Cancun (2003), Geneva (2004) and Hong Kong (2005) ministerial conferences.}