Development rights and Doha

An interesting article by Stephen Kim Park on contextulaizing developments rights in the overall debate of international economic law is found here.

Titled "Talking the Talk and Walking the Walk" in the Virginia Journal of International Law, it discusses the failure of the Doha round as well as proposes a new theoretical framework to address the complexities of issues on trade, development and equity.

"From Geneva to Beijing, Brasilia, Brussels, and Washington, D.C., there exists a modicum of consensus on the promise of trade as an engine of economic growth. Nonetheless, gross economic inequality— both between wealthy and poor countries and within individual countries — persists, and various social harms associated with liberalized trade garner significant attention. The collapse of the Doha Round presents new opportunities to consider anew the legal framework and process by which development objectives are identified and addressed in the global trade regime. The increasingly brighter spotlight placed on the WTO is testament both to the growth of cross-border commerce in the developing world and the important role of international trade law in defining the terms of these commercial relationships. 

... 

Based on a model of development rights as institutional communication, this Article raises procedural questions that suggest the value of institutional reforms to the WTO. Turning inward, such reforms may involve a re-thinking of the WTO’s Trade Policy Review Mechanism to promote best practices and the direct participation of NGOs and other representatives of civil society. Enhanced technical assistance and measures to facilitate coalition building among developing countries in all phases of the negotiating process would broaden stakeholder participation and lower information barriers among WTO members. Turning outward, greater use of mechanisms for inter-regime coordination, such as between the WTO and other international organizations (including the World Bank, the WHO, and the development agencies of the United Nations), would enhance the capacity of developing countries to meaningfully participate in discourse regarding trade and development and benefit from decisions that result. Finally, the promulgation of metarights or non-derogable rules, which would replace the aspirational principles of development in WTO agreements, could be considered as a prerequisite to a new round of WTO negotiations. The political viability and economic impact of these prescriptive measures constitute potential testable hypotheses for future empirical inquiry. Likewise, the principles of development rights, from which potential reforms may be derived, could be applied to the regulation of international finance and foreign investment law."

For all those trade negotiators involved in Doha... 

Will Bali be able to deliver what Doha could not?

The Doha Development Agenda or Doha round has been written off by many as not being capable of producing any exults in the coming years, already having lingered on for more than a decade. Will the 9th Ministerial Conference in Bali (I have blogged about it here and here) break the impasse, at least partially?

Pascal Lamy alluded to the possibility of a basket of credible results in Bali in December 2013 here. Referring to the way forward on these negotiations:

"To ensure that the process runs as smoothly as possible and to avoid any surprises, we need to stick to a few simple guidelines.  

First, we need to work towards what is reasonably doable.  Members should be realistic in their demands, take into account other Members’ red lines and stay clear of what are known to be unattainable objectives.  

Second, when advancing a proposal, it is the proponents’ responsibility to build consensus around it.  Make sure that you are working towards convincing the other Members, not yourselves.
Third, avoid being confrontational.  Any proposal should not be framed as a kind of take-it-or-leave-it position.  The negotiating process entails a trade-off between concessions and demands.  Be flexible and work together with other Members and around their sensitivities to achieve a common understanding.  

Certainly, none of these points are new.  They have guided the last couple of MC preparatory processes.  They are mainly dictated by common sense, but they are fundamental if we want to act responsibly and with collective determination in the run-up to Bali. 

Without setting new and unworkable deadlines, MC9 provides us with an opportunity to show that WTO Members can advance the negotiating front of the WTO agenda.  Of course, we should be under no illusion about the breadth of what we can achieve in the short timeframe between now and MC9.  Nor should we create unrealistic expectations. The main stumbling blocks of the DDA are still standing and many of the toughest nuts will likely not be cracked by the time Ministers meet in Bali. 

But although we must manage expectations and keep ambitions in check for Bali, we cannot fall short of delivering on a credible basket of issues that would signal your confidence that the rest of the Doha agenda can be addressed in due course."

Will Bali be the golden opportunity to bring negotiations back on track with some 'credible results"? T.S.Vishwanath feels Bali can perhaps provide a breakthrough:

"To a great extent, Bali can resurrect WTO and help member countries look at the organization to resolve some of the emerging issues in global trade. The next six months would be critical in developing an agenda that can be resolved by the end of the ministerial"

Trade Facilitation, may be? WIll there be an acknowledgement to move away from the single undertaking principle? A lot of expectations on Bali - Let the preparations begin! Indications of it were probably found in the Davos meet about which was alluded to here.

Keeping the WTO busy

A not so recent but interesting piece by Patrick A Messerlin on why the Doha round is not moving forward and what the WTO should do in the meantime.

Titled "Keeping the WTO busy while the Doha round is stuck" it argues that while efforts to move on the Doha agenda must go on, the WTO can be at the forefront as a "think-tank" on negotiating techniques and as a key host for thinking on multilateral governance.

"Despite all its shortcomings, the WTO legal framework is by far the most advanced piece of multilateral governance. The world trade regime is not the only multilateral regime in danger. The whole idea of ‘global governance’ is in deep troubles, and the trade regime is only one casualty among others. Very little progress has been achieved in climate change issues, and this is not due to doubts on climate change in the officialdom. And there is very little progress on water (farm production) despite droughts, and on oceans (fisheries) despite risks of depletion of some species. 

Trade negotiators should thus take the initiative to invite members of the climate, water, ocean communities to discuss jointly these common issues. The current centrality of the WTO forum makes it a natural place to initiate discussions on what means a “multilateral governance” beyond the narrow trade issues, when large countries are paralysed by domestic politics and when emerging countries are not ready to pay for leadership. 

Indeed, there is a demand from the ‘climate community’, which realises that a major source of its failures comes from its too weak institutional framework. There is a demand from the “ocean communities” which followed the Doha Round negotiations on fisheries subsidies. The demand from the ‘water community’ is less audible simply because, at this stage, the worldwide aspect of what is often seen as a local public good problem (but which is a worldwide public good problem because of trade in agriculture) is hard to see. 

The WTO is the only institution that has the capacity (from logistics to substance) to develop a series of worldwide, totally open-minded conferences on all these related themes, hence to reveal the deep similarities and the converging interests among all these world communities struggling for a functioning multilateral governance. It is puzzling that such initiatives have not yet become a routine component of the WTO work programme."

Over-optimistic, one would say? 

After Pascal Lamy, who?

(Tim Groser, Minister of Trade, New Zealand)

(Pascal Lamy, DG, WTO)

News of Tim Groser being in the race for the next WTO DG after Pascal Lamy (his second four year term ends in September 2013) is trickling in. The NZherald news confirmed this. Tim Groser has served New Zealand in a number of capacities including being New Zealand's chief negotiator in the Uruguay Round of trade talks. He is presently Minister of Trade of New Zealand. The IELP blog carried a speech of his recently highlighting his views on international law and the loss of sovereignty.

Tim Groser speaking at the 8th Ministerial Conference at Doha recently had opined about the way forward in the Doha round and how to get over the impasse:

"While we strengthen the existing system, deal with the 20th Century problems that lie at the heart of the Doha Development Agenda, we also need to look forward to emerging issues. The WTO is the place countries deal with the whole gamut of trade issues. The Doha mandate covers a subset of those issues. We need to accelerate our understanding of these emerging issues. This will be politically possible only if it is done explicitly on the basis that we are not trying to redefine the mandate. The developing countries would reject such an approach out of hand. But we need to start understanding emerging issues like the implications of the global supply chain for WTO Rules. Similarly, there is a whole set of issues in the trade and environment space that are going to demand attention, not simply the issue of environmental goods and services and the agreement we need on fishery subsidies that must be part of any Doha outcome. If we can develop a sense amongst negotiators that there are some solutions out there, this will exert positive gravitational pull on the Doha mandated issues and deal in part with the legitimate concern that we need to keep our system up to date. 

Our thinking is based on a frank admission that the path forward is by definition unclear. Therefore a more subtle, less prescriptive approach aimed at three levels - strengthening the existing defences against protectionism, finding ways forward on the 20th Century agenda defined by the Doha Mandate with development at the centre of that mandate, and starting to point the way forward on 21st Century issues - is the way forward."

His speech recently too highlighted the Doha impasse, the way forward and the need to recognize the multipolarity of today's global governance, especially in international trade:

"We are moving towards a multi-hegemonic system of power but the global governance system that would match that is remarkably immature My central view is that it is not a fundamentally different system that needs to be designed, but rather the informal modus operandi of the system needs to change to reflect the shift in relative power. 

The issue here is about leadership: no system of global governance can work without it. When China joined the WTO I heard some deeply experienced people speculate on how the WTO would work with the ‘800 pound gorilla’ in the ring. The concern is entirely the wrong way round. The greater danger is the opposite – these great emerging economies may not use their huge weight and influence to provide leadership but behave too passively. 

There can be no definitive conclusion to this. I think we are in a process of transition and the trick here will be to ensure that something gets done on both trade and climate change during that transition."

The race for the next WTO DG might have just begun. Some have argued that the next head must be from a developing economy to reflect changed dynamics and realities of world trade. Whoever the next chief is, the task would be an arduous one - to get Doha back on track and ensure multilateralism prevails in the context of increasing trends of protectionism.

Strategic Litigation at the WTO

A recent paper by Tilman Kruger on "The Judicialization of Governance in the WTO: Strategic Litigation as an Explanatory Factor?" throws up very interesting issues about the role of the Appellate Body of the WTO, a rule based system vis a vis a power based system, "judicial activism" of the adjudicatory bodies, the impact of the failure of political negotiations on judicial decision making, interpretation of Agreements in the light of global realities when political deadlock fails to suitably legislate to reflect business realities. 


The political and judicial organs have been the two sides of the multilateral organisation. However, with the Doha Development Agenda facing an impasse and consensus looking bleak atleast till the economic downturn subsides, observers believe that the judicial organ has played a decisive part in laying down the "law" for countries to follow. While a majority of decisions are based on a safe "textual" interpretation of the provisions, it is inevitable that instances of creative interpretations and "judicial activism" find their way in Appellate Body decisions. Also when there is ambiguity in the trade agreements and the ambiguity does not get resolved by political consensus and amended rules, the judicial organs have to perforce play the role of interpreting the rules in the light of their understanding of reality and law. It is akin to national judicial bodies "judicial activism" when the legislative or executive branch fails to deliver. However, there are dangers of this judicial activism from political resistance to non-compliance.

Another important point that is made by Tilman is the concept of "strategic litigation" in promoting judicialization of the WTO. Alvaro Santos too in his brilliant piece had alluded to strategic lawyering by Brazil to further its domestic agenda at the WTO. 

Tilman compares the U.S. and EU attitudes towards engaging the WTO to strategically litigate to further their long term interests. the ability to "strategically litigate" at the WTO depends on a variety of factors, especially domestic ones. The paper argues that the Eurpoean Commission's Director General of Trade is far more independent to initiate disputes at the WTO level thatn the USTR which is constrained by domestic political compulsions. This would be true of many other countries. Explaining the importance of "strategic litigation" (using the WTO judicial process to pursue long term interests), the author notes:

"Viewed through the lens of strategic litigation, important shifts in the evolution of WTO governance and its judicialization did not result from a conspiracy of some sorts, blatant judicial activism or an unfettered influence of powerful WTO members. At the same time, they are more than just the results of one or another form of judicial interpretation. In the incidents discussed, the strategic behavior of litigants brought the Appellate Body in a position in which it modified and developed aspects of WTO law and governance. WTO dispute settlement proceedings thus served as an effective forum for the shaping of WTO governance – in the court room, not in the green room."

A few important points that this paper highlights:

1. The importance of judicialization of the WTO in light of the complex political deadlock of the Doha round needs no emphasis.

2. Judicialization can range from over active engagement of member states to an Appellate Body engaging in creative interpretation of Agreements.

3. Developing countries may have a few points to take from the strategy EU or Brazil undertakes in this regard. While there is a constant domestic criticism that WTO is leading to an erosion of sovereignty, can developing countries explore the possibility of engaging in strategic litigation at the WTO to further their domestic development agenda. Trachtman has argued that the WTO offers sufficient policy space for countries to implement their domestic policy space. Can this be channelized to engage the WTO, in the judcial body, with strategic litigation to achieve long term, development goals? What would it entail domestically for developing countries to achieve this?

4. The tension over judicialization underlines the dichotomy between a rule based and power based system. While both are important constituents of the system, a tilt in either favour may be disastrous for the multilateral system. It would be the responsibility of member countries to engage in continuous dialogue to ensure that the balance is not breached. More decisions should be the result of the court room rather than the green room, but to gain wider consensus and implementability the role of negotiation and political consensus is equally important, perhaps not of the green room variety.


5. The ability to engage in "Strategic litigation" is also dependent on a variety of domestic factors. Primary amongst them is what importance WTO litigation is given in the political and bureaucratic circles in the context of a country's development agenda as well as economic strategy. How is it perceived domestically as well as what level of engagement exists in understanding and comprehending the potential it has to achieve its purpose. Further, the level of independence the agency representing the country at the WTO has in terms of taking decisions to strategically litigate is also important. Is it taken at the political level (legislative or executive) or at the bureaucratic level. This would decide to a large extent the degree of strategic litigation as well as the shift from an adhoc based system to a more long term view of the possibilities.