Developing countries and strategizing at the WTO

I have often written about developing countries participation at the WTO both in terms of negotiations and dispute settlement. An example that is often heralded as a beacon of hope for the developing and Least Developed Countries in multilateral trade participation is Brazil. Brazil's successful participation and strategy at the WTO has been a subject of extensive research over the years.

Came across this interesting paper by Gregory Shaffer, Michelle Ratton Sanchez and Barbara Rosenberg that summarizes the strategy that Brazil has adopted in engaging successfully with the multilateral trading system. It summarizes the strategy thus:

First, we argue that international trade law and judicialization have mattered in Brazil, unleashing a competition for expertise and helping to transform the government’s relations with business and civil society regarding trade policy. 

Second, and related to this point, we contend that being a defendant in WTO cases can help catalyze these changes, giving rise to mechanisms of public-private coordination to defend a country’s interests at the international level.  

Third, we find that these developments have not represented a weakening of the state, but rather the strengthening of the state’s ability to engage at the international level through a diffusion of international trade law and policy expertise. 

 Fourth, we observe that these processes reflect a growth of pluralism for trade policymaking within Brazil, as the government has been pressed to become more transparent and open to dialogue. 

Fifth, we maintain that these processes are not automatic, but are a function of domestic as well as international factors. We highlight the roles of Brazil’s professional, merit-based Ministry of Foreign Affairs, the development of Brazilian career paths in the international trade field, Brazil’s private sector that has been able to overcome collective action problems to engage with the government, and a general shift in orientation in Brazil’s development strategies.

 Sixth, we find that although the example of Brazil offers some hope to other developing countries, these countries generally face greater challenges and will need to develop their own strategies in light of their own contexts.  

Seventh, we conclude regarding the need to take into account the reciprocal interaction of the domestic and international spheres to understand the operation of international legal orders."

Are there lessons for other developing countries to develop internal institutional capacities to engage with the multilateral trading system? Another more recent study on the participation of Latin American countries participation in the WTO highlighted the importance of private sector involvement and the need for creative solutions to engage with the rule based system. 

Developing countries must engage proactively in the system be it through negotiation, dispute settlement, participation in the  proceedings of various Committees at the WTO or private sector engagement. The strategy should be to actively engage withthe rules rather tan shy away from it. However each country would have to develop its own creative, need based strategy depending on its own requirements. Though there is no one-size-fits-all strategy, lessons learnt in Brazil's engagement would surely help other developing countries. A BRICS strategy perhaps?

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? 

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.