Thursday, October 11, 2012

Globalization, judiciary and the middle path

I had written a post a few months back about the debate of constitutional sovereignty and globalization here in the context of the U.S. Constitution. Does globalization, epitomized by world trade rules, have a devastating impact on constitutional values and the power of the people or is it an expression of people's will through State consent?

I have often thought about the attitude of the national judiciary towards globalization and international trade rules. How are they viewed and how are the challenges of globalization, free trade, protectionism construed in the context of the Constitution and domestic legal regime. I found an interesting piece by a former Chief Justice of the Supreme Court of India wherein the issue of globalization and the way the judicial system should react is touched upon. The article dealt mainly with the way globalization impacted legal systems, but it had some important points for international trade law. Commenting on "protectionism" by both developed and developing worlds its said:
"On account of such complex social realities, it becomes very difficult to gauge the substantive benefits of foreign trade and investment. In such a scenario the onus is on the government and the legal system to devise strategies for ensuring a more equitable distribution of the pie. It is the concern with the prospects for our agricultural exports in foreign markets, which has prompted India􏰁s vehement stand against the policy of export-subsidies given to farmers in some Western countries. There is no foundational opposition to the reduction of tariffs and other trade barriers which will enable more foreign firms to trade in goods and services in India. However, Western governments should also be willing to reciprocate by removing the unfair advantages given to their respective agricultural sectors. If the same is done, Indian farmers will be able to improve their earnings from exports and the same will translate into meaningful development for our rural communities. Even though the negotiations at the WTO seem to have been stalled at the moment, there is no ambiguity about the merits of free trade. The only condition is that both the developed and developing nations should be equally committed to the reduction of trade barriers."
Stressing on following the "middle path" it continued:
"The lesson that all of us can conclusively learn from the tumultuous events of the past year is that while the belief in free markets may be well placed, there is an equally important role for governmental intervention in our respective economies. Extreme viewpoints favouring market-fundamentalism on one hand and governmental control on the other hand, will not help us in arriving at constructive solutions. In these uncertain times, it is incumbent upon Courts and regulatory agencies to embody the voice of reason, accommodation and compromise."
While there is no dispute that one must tread the middle path most of the time the issue is to find this middle path. What constitutes the middle path? Who decides what it is? Does the WTO law provide for a country to follow a middle path? Is it flexible enough to allow a judicious mix of policies to achieve national growth amidst reduced barriers? How should the judiciary in a country react to the challenges of globalization? Would holding international economic policy subject to constitutional values inherit the danger of international non-compliance? How should the friction between constitutional vaues and international obligations be reconciled? Are they irreconcilable at all?

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