Friday, December 9, 2011

WTO legitimacy debates

With the focus on the Doha Ministerial later this month and the impending deadlock, questions about the efficacy and legitimacy of the WTO as a multilateral institution is often raised. Legitimacy of the WTO in the economic discourse (trade liberalization, reduction of trade barriers) is quite different from the legal discourse on WTO legitimacy.

Michael Fakhri in his paper "Reconstruing WTO legitimacy debates" discusses the various legitimacy debates around the WTO. Viewing the WTO as the "constitution" of the world trading system is an important part of the legitimacy discourse. This perceives the WTO as a constitution over states domestic laws. It also presumes that the underlying economic thought of trade liberalisation is fundamentally good. The WTO law is built on this premise. This analysis is explained as follows:

"In light of the discussion above, the broader normative framework of an institutional functionalist conception of a constitutionalizing WTO, can be summarized as follows: There is currently a global market integration that interconnects through developments in technology, transportation, and communication; international economic institutions such as the WTO are necessary to manage the interaction of cultural and institutional diversity that arises from this interconnectedness; international economic institutions are also necessary to create the coherent and cohesive legal rules that ensure the global economy functions efficiently; these rules enacted through international treaties ensure national governments remain adherent to economic principles that outline how the market should properly function rather than make choices driven by personal interest or special interest groups; national governments negotiate international treaties that create international institutions, which in turn act as a disciplinary mechanism upon governments to ensure that they cooperate amongst each other and adhere to economic policies of liberal trade; within this hierarchy of ideas, economists establish the normative frameworks, diplomats negotiate policies and lawyers craft the technical and institutional details."

Another contrary view of legitimising the WTO is an "Economic Functionalism" view that justifies WTO as protecting individual autonomy and freedom. The two approaches have been summarised as :

"Jackson’s conception of the WTO as a constitution, considers the market to be the normatively paramount social institution based on the premise that the market offers consumers an increased choice of products at better prices, thereby efficiently allocating resources. Petersmann’s trade constitution prioritizes the market because it considers the market to be the sphere that best ensures personal autonomy and liberty. Jackson leaves it to domestic institutions to ameliorate the detrimental effects of free trade and yet has little confidence in the ability of domestic institutions in achieving this goal. Petersmann relies on domestic institutions as necessary to limit the role of government, and imagines domestic institutions buttressed by the WTO."

The existence of the Dispute Settlement Mechanism has also been heralded as a strong factor for the legitimacy of the WTO system. It states, "WTO or the market should preside over the state’s policy making ability. Dispute settlement debates are a way of configuring a hierarchical relationship between WTO law and state politics."

Overall, an interesting piece on WTO legitimacy in the context of the legal debates that have dominated the arena.

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