Friday, March 9, 2012

WTO, pluralism and domestic policy space - some questions

I had blogged here sometime earlier about the ban on seal trade and the questions it raises in relation to international trade law and limits to domestic policy space. The EU and more recently Russia had taken steps to ban the trade in seal trade on the grounds of protection of animal welfare. Canada, which is one of the largest exporter of seal products had challenged this ban as violative of WTO obligations. Does a ban on trade pursuant to concerns on animal welfare violate the trade rules of the WTO? Is banning of trade in products on grounds of standards not primarily "trade-related" like animal welfare, labour standards, cultural values, public morals, environmental safety in consonance with the letter and spirit of WTO law? Is it a legitimate "barrier" that can be imposed or does it open a pandora's box of "barriers to free trade" ? Does it expose the multilateral system to "protectionist" tendencies of countries wanting to restrict products of other countries on grounds other than trade? Is it a technical barrier to trade which is unjustifiable?

Robert Howse and Joanna Langille in "Permitting Pluralism: The Seal Products Dispute and Why the WTO Should Permit Trade Restrictions Justified by Non-Instrumental Moral Values" in their forthcoming article in the Yale Journal of International Law essentially answer these questions. Justifying the stand that WTO rules permit countries to take measures on  pluralistic notions of values, it states,
"We now turn to consider the WTO from a political and theoretical perspective, to argue that if the WTO fails to recognize moral concerns such as animal welfare as legitimate reasons for restricting trade, the WTO will be acting outside of its institutional object and purpose. By failing to recognize moral justifications for regulation, the WTO will be, in effect, imposing secular rationalism on its member states. This is outside of the scope of its mandate. Instead, the WTO must be open to noninstrumental values as a basis for justification of domestic policies.
 But equally central to the ethics or the fundamental values of the WTO is the acceptance of great moral, religious, and cultural diversity in the grounds on which WTO Members may legitimately regulate(again subject to certain limits, either imposed by the ethics of the WTO itself or accepted by virtue of the WTO’s participation in the general system of international law, even if not enforced as such by the WTO)" 
The position articulated here is that countries should have the domestic policy space to legislate based on "their" notions of values and this would not be considered a barrier to trade as per the WTO.  Reflecting on the role of the WTO the article continues,
"The WTO is not, no more than the GATT was, a comprehensive governance regime. It is not like a domestic government, which can weigh all relevant, competing factors when determining a policy outcome. The WTO has a narrow swath of issues with which it is concerned: regulating international trade to ensure that there are not unnecessary or discriminatory barriers to trading. But eliminating moral regulation is not part of this mandate. While the WTO has had to assess whether rationales for legislation are legitimate, in the sense that they are not merely pretextual reasons which are false barriers to trade, it is not designed to pass judgment on the substance of those legislative rationales. If moral motivations are excluded from the trade policy lexicon, the WTO will, in effect, conclude that only instrumental, material concerns (such as health and security) are legitimate policy goals. This is not the Organization’s object and purpose."
Does this allow excessive domestic policy space on issues unrelated to trade? Is it capable of being used as an unfair measure to restrict free trade? Are their "universal" moral values that can be safely assumed to be within the ambit of WTO rules? If not, does this not open the floodgates for countries to use "moral cultural values" to further trade interests?

Crafting a vision of the WTO as not being a supranational constitutional government the piece concludes, 
"This analysis suggests a vision of the WTO’s institutional role, and its relationship to the regulatory autonomy of its member states which is deeply compatible with the embedded liberalism that characterized the perspective of the founders of the original GATT; it is a vision at odds with the expansive constitutionalist vision of the WTO as a global economic regulator, assessing the rationality of all governmental policies from a right to trade perspective. ...
 There is no “right to trade” in the WTO system, only a set of specific obligations to avoid certain kinds of defined trade restricting measures, in the case of domestic policies largely ones that are either discriminatory or gratuitously trade-restrictive. But, as the AB has held, there is a “right to regulate” that is foundational. This notion of “the right to regulate” is perhaps where the AB comes closest to expressing the pluralist perspective offered in this article. According to the AB, the WTO legal system, does not itself grant to WTO Members the right to regulate subject to certain justifications, unlike – one should add – a domestic constitution. Instead, it only confines or restrict the inherent right to regulate by certain very limited textually defined disciplines, some of which, like Article XX, are aimed at clearly preserving important elements of the right to regulate even within the specific disciplines provided in the WTO Agreements. 
Legitimate, well-founded, long-standing political justifications such as animal welfare should not be banned from the political lexicon, or treated in a narrow or skeptical fashion. The WTO should stick with what it knows best, and leave moral regulation to domestic administrations, operating within the normative bounds that are today most obviously expressed in the positive law of international human rights and related regimes"

Would this interpretation of the extent of domestic policy space be the safety valve that countries need to exercise their domestic value policy choices in the context of international trade rules? Does this have the potential to derail international trade standardisation? Does it provide a "backdoor' for protectionism? Can it be used as a tool by the developed world, with its notions of "morality" and "human rights/labour rights" to unfairly restrict imports from the developing or least developed world? Though the article argues that the WTO by taking this stand is not getting into the domains of issues other than trade, is it not by implication endorsing subjective non-trade issues to override objective trade rules?

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