Culture, human rights and the WTO

Tania Voon has written an interesting piece on the intersection of cultural values, human rights and WTO in this piece. Human rights does not normally figure in the discussion in international trade law and policy. The international law discourse on human rights having its basis in the UN Charter is seen more as a political discourse not finding its way in the international economic law and policy domain.

Tania Voon analyses WTO disputes pertaining to audiovisuals and food related risks and raises important issues of the role of cultural preferences in WTO jurisprudence. She concludes:

"The limited reflection on human rights within the WTO and the reluctance by many Members to introduce non-WTO public international law into the WTO legal framework (whether implicitly or explicitly) may help explain why WTO Members are having such difficulty in agreeing on how to treat subject matters related to culture such as traditional knowledge and genetic resources in the current negotiations. The failure to reach agreement in the Uruguay Round (or subsequently) on the proper approach to audiovisual products and printed publications may also make Members wary of opening discussions premised on culture or human rights in a general sense. Instead, Members may find themselves focused on technicalities such as the modalities of negotiation and the wording of minor amendments to the existing agreements, even where broader principles (such as adherence to the general objectives of the CBD) are agreed. However, the pragmatic acceptance of a wide range of perspectives on culture and its relationship to trade in the WTO has in some ways been beneficial. Culture is properly a secondary consideration in the formulation of many WTO rules, including some that might appear directly related to culture but that actually have different purposes, such as geographical indications. A healthy disagreement among WTO Members about the relationship between the WTO, culture and human rights may assist in keeping the rules under close examination and encouraging greater contemplation of that relationship within the organisation in future."

Article XX General Exceptions dealing with public morals would come the closest to giving flexibility to WTO members to engage with the multilateral system keeping in mind their cultural context. The issue of a particular WTO member's cultural context intersecting with international trade rules is in two ways;

1. When a country exercises its domestic regulatory choice based on its cultural context, it can be challenged in the WTO as being protectionist or unreasonably restrictive. The debate then revolves around whether a country has domestic regulatory space to pursue its cultural values.

2. When a country's products are impacted by a measure of another WTO member on the grounds of "cultural values", it impacts international trade and can be a "protectionist" tool by certain countries to protect domestic industry.

Thus, the adoption of values of human rights, labour rights, cultural mores in international trade law must be viewed with a bit of caution keeping in mind the issue of these measures becoming defacto non tariff barriers. In what circumstances they are permitted and to what extent they can limit free flow of goods across borders is a contentious one. It involves at times a threadbare interpretation of the  The political economy of the use of cultural rights to further one's national interest is a genuine threat.However, the need to engage in identifying the intersection is nevertheless necessary.

Illegal timber logging - Australia's law is shaping up

I had earlier blogged about a proposed Australian legislation dealing with illegal timber logging titled the "Illegal Timber Logging Prohibition Bill 2011" which was passed by the lower house of the Australian parliament a few days back and has reached the Senate. An anonymous comment to this blogpost brought me back to this topic.

Does the Bill treat imported timber less favorably than local timber products? Is it more onerous for imported timber products to establish legality than local like products? Even if the legislation does not de jury discriminate between imported and local products on terms of applying equally to both products, is there a de facto discrimination since there is a greater probability of "illegal" timber coming from certain countries than others? Does the legislation modify the conditions of competition for imported timber products and is thus discriminatory and in violation of the national treatment principle under GATT? What are the contours of the Article XX general exceptions GATT in the present dispute? Do they justify the measure?

A recent study by Duncan Brack on the compatibility of the proposed Australian legislation with WTO law seemed to suggest that Article XX would save the legislation.The longer version of the study is found here.

"It is impossible to know precisely how the proposals in the Australian legislation relate to these WTO rules, as the details of the proposals are not yet finalised. In particular, we do not know exactly which products will fall into the category of “regulated timber products” for the purpose of the due diligence requirements, or many of the details of those requirements themselves - including, importantly, which legality verification, forest certification, or other existing or evolving systems for identifying legality are likely to be regarded as placing their products into low-risk categories. 

However, as long as the basic WTO principle of non-discrimination is respected - as reflected in Article XX(g) and the headnote to Article XX - it seems likely that Article XX(g) of the GATT could provide a justification for trade-restrictive measures aimed at excluding illegal timber from international trade, should a WTO dispute ever be brought. The main arguments against this position, as expressed in one of the submissions to the Senate Committee inquiry, seemed to rest on the assumption that any products that enter trade must be treated in the same way, regardless of their status under national laws (i.e., that legal and illegal timber are “like products”). Taken to its logical conclusion, this would require all countries to have exactly the same laws - which seems likely to be a misreading of the GATT."

Commenting on this article, Lorand Bartels feels that the interpretation of the general exception under Article XX GATT would be the focal point of a challenge and its defense:

"... More promising is the notion that there is a ‘nexus’ between logging and Australia in terms of climate change. In my view, the territorial scope of Art XX GATT should be assessed in terms of the rules on public international law on legislative jurisdiction. It might be argued, along these lines, that Australia has a right to regulate activities abroad (ie logging) in order to mitigate the effects of climate change on its own territory. (From your summary, it does not appear that Australia is also regulating the domestic marketing of such products, which would add a basis for territorial regulation).

But even so, what about the facts? To what extent can this measure be justified in terms of climate change? And what does ‘legality’ have to do with it? Is this connected with climate change? In short, is there really a causal link between the measure and this objective?"

Increasingly, national measures would not be blatantly discriminatory. The intent and the impact of the measures would have to be considered. Do they have a de facto impact on adversely affecting imported products? Are they designed to discriminate between imported and local products? Are the conditions so onerous that it is more likely that imported products, from less developing countries, will be impacted?

While the measure itself would apply to both imported and local products in actuality the impact on the trade on imported goods would be so high that it could amount to a discrimination. Another ground for a challenge, inspite of the defense of Article XX, could be the non-fulfilment of the chapeau requirements. Does it constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade? Would the imports of Indonesian timber be adversely affected by the legislation? Is more illegal timber logged in Indonesia or would it be difficult to comply with the conditions of due diligence that the legislation demands? WIll Indonesian timber become less competitive and more expensive if the conditions mandated are complied with? Will it lose its competitive edge?

One would have to wait for the legislation to be passed and a possible Indonesian challenge at the WTO for some of these questions to be answered. Till then, timber logging would remain an uncontested topic in WTO dispute settlement.

Pluralism, domestic policy and trade rules - Where is the Middle Path?

The issue of domestic policy space within the WTO rules has been a common and controversial theme running in this blog. How much policy space does a country have to enact measures that can be justified under the WTO legal system? Do the multilateral rules permit or deny "pluralism" in policy choice? Is there a hegemonic, universal set of norms that all countries need to follow or is their sufficient policy space for countries to manouevre?

These questions repeatedly come up when measures are undertaken by WTO members and challenged by others effected. While they are justified as being in conformity with the General Exceptions that GATT provides, they are challenged as being "discriminatory", an "unnecessary obstacle to trade" as well as a disguise for a "protectionist" measure. What principles are to be followed to determine if a measure is permissible in exercise of legitimate policy space? What constitutes discrimination and what is a protectionist measure are persisting questions that scholars of international trade law grapple with when dealing with measures that are alleged to violate WTO rules.

The ban on seal trade by the EU is a classic issue where this theme plays out. Do the principles of animal welfare and notions of member countries towards animal welfare permit it to impose restrictions on trade of animal products (including a ban)? I had blogged about this issue sometime back here.

Robert Howse and Joanna Langille have addressed this issue in their brilliant piece here. they essentially argue that member states have policy space to undertake measures in the interests of their notion of animal welfare and this can be justified under the General Exceptions under Article XX of GATT. Permitting pluralism in trade regulation based on notions of morals and welfare of individual member states is what they argue for.

Opinio Juris has a fascinating debate on this issue with Tamara Perisin, Simon Lester and Isabel Feichtner responding to the principle of permitting pluralism. While all the respondents agree with the notion of there being a right for a member country to exercise policy space in this respect, they raise pertinent issues about the limits of the measure, role of rationality in the debate as well as underlying motivations for a measure to be construed as a legitimate, regulatory measure with its basis in pluralist thought as against those based on ulterior mercantilist or protectionist intentions.

Reading this fascinating debate raised some questions for me:

1.When does "permitting pluralism" become a slippery slope in terms of protectionist measures and discrimination? Does it impact the legitimacy of the trading system based on universal, non-discriminatory rules? To what extent should motivations, business interests as well as "rationality" of a policy choice have a role to play in lifting the veil of the justification of "animal welfare" or other moral justifications? Can the DSM foray into this territory of questioning underlying motivations and justifications? Does the jurisprudence of Article XX GATT allow this as against the jurisprudence of Article XXI GATT which is more restrictive in terms of judicial oversight?

2. While blatant discrimination can be questioned, can the underlying basis for the "welfare measure" be also subjected to a rationality test? If not, does it not condone measures that are based on "national morality" and notions of welfare, but militate against universal principles of human rights, gender equality, religious toleration, racial equality? Ofcourse, Robert Howse and Joanna Langille do make the point that while allowing this pluralism it is recognised that  that states are also bound by non-WTO norms, such as international human rights law, which also shape the limits of their prerogative to regulate morality. However, is it just human rights law or is there a longer list? Who decides what this list should be?

3. While animal welfare, public morals, religious morals may be underlying reasons for justifying a national measure, to what extent should there be an analysis of the business motivations behind the measure? Is the enactment of a national legislation in itself enough to show representative "national will" and intent or can extraneous circumstances like existence of export interest, domestic competition also play a part in the analysis? Further, can the rationality of a "moral measure" as being discriminatory or "irrational" be a valid ground to question a policy choice? Can an "inherently non-rational" measure be put to a "rationality" test?

4. What have been the underlying motivations for countries to use the Article XX general exception, especially public morals and animal welfare? Has it been the notion of protecting animal welfare in real? Has it been a protectionist tool?

5.what if countries impose bans and restrictions based on their "religious beliefs", notions of morality (culture and decency) and what if the notion of banning goods from certain countries is part of that public morality? Would that be justified as being not subjected to a rationality test? 

6. Public morals is a more slippery ground. Is it an ideal setting for trade restrictive practices justified on the principle that countries have the policy space to pursue their notions of morality? What lessons do we have from the actual use of this exception? Mark Wu has a brilliant analysis of the use of the Public Morals exception under Article XX in this piece here about which I had blogged here.

The debate is a classic theme in international trade law - the tension between national sovereignty and the right to decide one's course of action against multilateral trade rules that are based on non-discrimination and universality. The reaction of what should prevail often depends on the measure in question. While the issue of the need for policy space and pluralism is never in question, what are its contours, limits and extent is often a matter of extreme complication. International trade supporters would want it to the minimum while votaries for pluralism would tend to argue that universality beyond a point is counterproductive. Where that point lies is unclear. One needs to tread the middle path - where this middle path actually lies is still unclear.