Legal Aspects of a Poverty Agenda at the WTO: Trade Law and 'Global Apartheid'

Journal of International Economic Law

Volumn 6, Issue 1, 2003, Pages 3-21

  Trachtman, Joel P ^a  

^a NONE

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EID: 0037233019     PISSN: 13693034     EISSN: None     Source Type: Journal    
DOI: 10.1093/jiel/6.1.3     Document Type: Review

References (74)

1. 'Make Trade Fair, Rigged Rules and Double Standards: Trade, Globalisation and the Fight Against Poverty' (2002), available at www.maketradefair.com [hereinafter, the 'Oxfam Report'].
2. United Nations Development Program, Human Development Report 2002, chap 1 at 17-18.
3. While the predominant view among economists seems to be that liberalization can promote growth in developing countries, there is at least some argument that the timing and scope of liberalization might be structured in different ways to enhance growth. See Francisco Rodriguez and Dani Rodrik, 'Trade Policy and Economic Growth: A Skeptic's Guide to Cross-National Evidence', NBER Working Paper No W7081 (1999). For a response, see Jagdish Bhagwati and T. N. Srinivasen, 'Trade and Poverty in the Poor Countries', working paper dated 2002, available at http://www.econ.yale.edu/̃srinivas/trade_poverty.pdf.
4. While the predominant view among economists seems to be that liberalization can promote growth in developing countries, there is at least some argument that the timing and scope of liberalization might be structured in different ways to enhance growth. See Francisco Rodriguez and Dani Rodrik, 'Trade Policy and Economic Growth: A Skeptic's Guide to Cross-National Evidence', NBER Working Paper No W7081 (1999). For a response, see Jagdish Bhagwati and T. N. Srinivasen, 'Trade and Poverty in the Poor Countries', working paper dated 2002, available at http://www.econ.yale.edu/̃srinivas/trade_poverty.pdf.
5. See G. A. Cohen, If You're an Egalitarian, How Come You're So Rich? (Harvard University Press 1999).
6. John G. Ruggie, 'International Regimes, Transactions, and Change: Embedded Liberalism in Postwar Economic Order, 36 Int'l Org., 379 (1982). Ruggie modernizes and adapts a perspective earlier elucidated by Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Time (Beacon Press 1944). Dani Rodrik has considered the application of this perspective to modern global markets. Dani Rodrik, Has Globalization Gone Too Far? 7 (1999). See also Robert L. Howse, From Politics To Technocracy - and Back Again: The Fate of the Multilateral Trading Regime, 96 Am J Int'l L 94 (2002).
7. John G. Ruggie, 'International Regimes, Transactions, and Change: Embedded Liberalism in Postwar Economic Order, 36 Int'l Org., 379 (1982). Ruggie modernizes and adapts a perspective earlier elucidated by Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Time (Beacon Press 1944). Dani Rodrik has considered the application of this perspective to modern global markets. Dani Rodrik, Has Globalization Gone Too Far? 7 (1999). See also Robert L. Howse, From Politics To Technocracy - and Back Again: The Fate of the Multilateral Trading Regime, 96 Am J Int'l L 94 (2002).
8. John G. Ruggie, 'International Regimes, Transactions, and Change: Embedded Liberalism in Postwar Economic Order, 36 Int'l Org., 379 (1982). Ruggie modernizes and adapts a perspective earlier elucidated by Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Time (Beacon Press 1944). Dani Rodrik has considered the application of this perspective to modern global markets. Dani Rodrik, Has Globalization Gone Too Far? 7 (1999). See also Robert L. Howse, From Politics To Technocracy - and Back Again: The Fate of the Multilateral Trading Regime, 96 Am J Int'l L 94 (2002).
9. John G. Ruggie, 'International Regimes, Transactions, and Change: Embedded Liberalism in Postwar Economic Order, 36 Int'l Org., 379 (1982). Ruggie modernizes and adapts a perspective earlier elucidated by Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Time (Beacon Press 1944). Dani Rodrik has considered the application of this perspective to modern global markets. Dani Rodrik, Has Globalization Gone Too Far? 7 (1999). See also Robert L. Howse, From Politics To Technocracy - and Back Again: The Fate of the Multilateral Trading Regime, 96 Am J Int'l L 94 (2002).
10. For an application of this concept in the corporate law field, see Mark J. Roe, 'Backlash', 98 Colum L Rev 217 (1998)
11. See Global Justice (Thomas W. Pogge (ed), Blackwell 2001); Frank J. Garcia, Trade and Inequality: Economic Justice and the Developing World', 21 Mich J Int'l L 975 (2000). See also Joel P. Trachtman, 'Review Essay: The Law and Economics of Global Justice', Am J Int'l L (2002).
12. See Global Justice (Thomas W. Pogge (ed), Blackwell 2001); Frank J. Garcia, Trade and Inequality: Economic Justice and the Developing World', 21 Mich J Int'l L 975 (2000). See also Joel P. Trachtman, 'Review Essay: The Law and Economics of Global Justice', Am J Int'l L (2002).
13. See Global Justice (Thomas W. Pogge (ed), Blackwell 2001); Frank J. Garcia, Trade and Inequality: Economic Justice and the Developing World', 21 Mich J Int'l L 975 (2000). See also Joel P. Trachtman, 'Review Essay: The Law and Economics of Global Justice', Am J Int'l L (2002).
14. See Charles R. Beitz, 'Review Essay: International Liberalism and Distributive Justice: A Survey of Recent Thought', 51 World Pol 269, 290 (1999), stating that 'I believe that the philosophical weakness most characteristic of cosmopolitan theories - although not found equally in all of them - is a failure to take seriously enough the associative relationships that individuals do and almost certainly must develop to live successful and rewarding lives.' However, Beitz accepts a federal possibility: 'it is hardly clear that a sophisticated cosmopolitanism cannot explain how local affiliations might give rise to special responsibilities. Such a view would recognize the value to individuals of their associations with domestic or local communities and argue that ethically significant properties of these associations justify internal distributive arrangements that are different from, although not inconsistent with, what is required by global principles.' Id (citations omitted) (emphasis in original).
15. Thomas W. Pogge, Realizing Rawls (Cornell University Press 1989).
16. As Ruggie does in more recent work. See John G. Ruggie, 'Taking Embedded Liberalism Global: The Corporate Connection', Miliband Public Lecture on Global Economic Governances The London School of Economics and Political Science, 6 June 2002, available at www.globaldimensions.net/articles/ruggie/globalliberalism.html.
17. It is a question of subsidiarity. For a brief statement of this issue, see David Trubek, 'Book Review: Governance in a Globalizing World', 96 Am J Int'l L 748 (2002). On a related point, see Howse, above n 5, at 116.
18. It is a question of subsidiarity. For a brief statement of this issue, see David Trubek, 'Book Review: Governance in a Globalizing World', 96 Am J Int'l L 748 (2002). On a related point, see Howse, above n 5, at 116.
19. Louis Kaplow and Steven Shavell, 'Should Legal Rules Favor the Poor? Clarifying the Role of Legal Rules and the Income Tax in Redistributing Income', 29 J Leg Stud 821 (2000); Louis Kaplow and Steven Shavell, 'Why the Legal System is Less Efficient than the Income Tax in Redistributing Income', 23 J Leg Stud 667 (1994).
20. Louis Kaplow and Steven Shavell, 'Should Legal Rules Favor the Poor? Clarifying the Role of Legal Rules and the Income Tax in Redistributing Income', 29 J Leg Stud 821 (2000); Louis Kaplow and Steven Shavell, 'Why the Legal System is Less Efficient than the Income Tax in Redistributing Income', 23 J Leg Stud 667 (1994).
21. See Geoffrey Brennan and James M. Buchanan, The Reason of Rules 28-31 (Cambridge University Press: Cambridge 1985); James M. Buchanan and Gordon Tullock, The Calculus of Consent 77-80 (University of Michigan 1962); Dennis Mueller, Constitutional Democracy 61-64 (Oxford University Press: New York 1996).
22. See Geoffrey Brennan and James M. Buchanan, The Reason of Rules 28-31 (Cambridge University Press: Cambridge 1985); James M. Buchanan and Gordon Tullock, The Calculus of Consent 77-80 (University of Michigan 1962); Dennis Mueller, Constitutional Democracy 61-64 (Oxford University Press: New York 1996).
23. See Geoffrey Brennan and James M. Buchanan, The Reason of Rules 28-31 (Cambridge University Press: Cambridge 1985); James M. Buchanan and Gordon Tullock, The Calculus of Consent 77-80 (University of Michigan 1962); Dennis Mueller, Constitutional Democracy 61-64 (Oxford University Press: New York 1996).
24. See Ruggie, above n 10.
25. Robert E. Hudec, Developing Countries in the GATT Legal System, 39, 40 (Gower: Aldershot 1987); See also John H. Jackson, The World Trading System 319-20 (MIT Press 1997) ('a number of developing countries, dismayed with rules that had evolved [at the 1948 Havana conference], opted to stay out of the GATT system for years and even decades.').
26. Robert E. Hudec, Developing Countries in the GATT Legal System, 39, 40 (Gower: Aldershot 1987); See also John H. Jackson, The World Trading System 319-20 (MIT Press 1997) ('a number of developing countries, dismayed with rules that had evolved [at the 1948 Havana conference], opted to stay out of the GATT system for years and even decades.').
27. For a contrary perspective, or at least an admittedly optimistic perspective, see Peter Gerhart, 'Slow Transformations: The WTO as a Distributive Organization', 17 Am U L Rev 1045 (2002). Prof. Gerhart suggests that in the Doha Ministerial Declaration there is evidence of a move toward greater emphasis on balanced outcomes, and toward a vision of the WTO as motivated not just by efficiency, but by redistribution.
28. Paragraph 44 of the Doha Ministerial Declaration calls for a review of S&D, with a view toward making the relevant provisions more precise, effective, and operational. For a proposal to revise S&D in order to make it more favorable to poor countries, see Communication from Cuba, Dominican Republic, Honduras, India, Indonesia, Kenya, Malaysia, Pakistan, Sri Lanka, Tanzania, Uganda, and Zimbabwe, Proposal for a Framework Agreement on Special and Differential Treatment, WT/GC/W/442 (2002). For the history of the concept of S&D, see John H. Jackson, World Trade and the Law of the GATT: A Legal Analysis of the General Agreement on Tariffs and Trade, 625-71 (Bobbs-Merrill: Indianapolis 1969). For an analysis of the S&D principle, see Peter Lichtenbaum, ' "Special Treatment" vs. "Equal Participation": Striking a Balance in the Doha Negotiations', 17 Am U Int'l L Rev 1004 (2002). See also John Whalley, 'Special and Differential Treatment in a Millennium Round', CSGR Working Paper 30/99, May 1999, available at http://www.warwick.ac.uk/fac/soc/CSGR/wpapers/wp3099.PDF; Constantine Michalopoulos, 'The Role of Special and Differential Treatment for Developing Countries in GATT and the World Trade Organization', working paper dated 2000, available at http://www.worldbank.org/research/trade/archive.html.
29. Paragraph 44 of the Doha Ministerial Declaration calls for a review of S&D, with a view toward making the relevant provisions more precise, effective, and operational. For a proposal to revise S&D in order to make it more favorable to poor countries, see Communication from Cuba, Dominican Republic, Honduras, India, Indonesia, Kenya, Malaysia, Pakistan, Sri Lanka, Tanzania, Uganda, and Zimbabwe, Proposal for a Framework Agreement on Special and Differential Treatment, WT/GC/W/442 (2002). For the history of the concept of S&D, see John H. Jackson, World Trade and the Law of the GATT: A Legal Analysis of the General Agreement on Tariffs and Trade, 625-71 (Bobbs-Merrill: Indianapolis 1969). For an analysis of the S&D principle, see Peter Lichtenbaum, ' "Special Treatment" vs. "Equal Participation": Striking a Balance in the Doha Negotiations', 17 Am U Int'l L Rev 1004 (2002). See also John Whalley, 'Special and Differential Treatment in a Millennium Round', CSGR Working Paper 30/99, May 1999, available at http://www.warwick.ac.uk/fac/soc/CSGR/wpapers/wp3099.PDF; Constantine Michalopoulos, 'The Role of Special and Differential Treatment for Developing Countries in GATT and the World Trade Organization', working paper dated 2000, available at http://www.worldbank.org/research/trade/archive.html.
30. Paragraph 44 of the Doha Ministerial Declaration calls for a review of S&D, with a view toward making the relevant provisions more precise, effective, and operational. For a proposal to revise S&D in order to make it more favorable to poor countries, see Communication from Cuba, Dominican Republic, Honduras, India, Indonesia, Kenya, Malaysia, Pakistan, Sri Lanka, Tanzania, Uganda, and Zimbabwe, Proposal for a Framework Agreement on Special and Differential Treatment, WT/GC/W/442 (2002). For the history of the concept of S&D, see John H. Jackson, World Trade and the Law of the GATT: A Legal Analysis of the General Agreement on Tariffs and Trade, 625-71 (Bobbs-Merrill: Indianapolis 1969). For an analysis of the S&D principle, see Peter Lichtenbaum, ' "Special Treatment" vs. "Equal Participation": Striking a Balance in the Doha Negotiations', 17 Am U Int'l L Rev 1004 (2002). See also John Whalley, 'Special and Differential Treatment in a Millennium Round', CSGR Working Paper 30/99, May 1999, available at http://www.warwick.ac.uk/fac/soc/CSGR/wpapers/wp3099.PDF; Constantine Michalopoulos, 'The Role of Special and Differential Treatment for Developing Countries in GATT and the World Trade Organization', working paper dated 2000, available at http://www.worldbank.org/research/trade/archive.html.
31. Paragraph 44 of the Doha Ministerial Declaration calls for a review of S&D, with a view toward making the relevant provisions more precise, effective, and operational. For a proposal to revise S&D in order to make it more favorable to poor countries, see Communication from Cuba, Dominican Republic, Honduras, India, Indonesia, Kenya, Malaysia, Pakistan, Sri Lanka, Tanzania, Uganda, and Zimbabwe, Proposal for a Framework Agreement on Special and Differential Treatment, WT/GC/W/442 (2002). For the history of the concept of S&D, see John H. Jackson, World Trade and the Law of the GATT: A Legal Analysis of the General Agreement on Tariffs and Trade, 625-71 (Bobbs-Merrill: Indianapolis 1969). For an analysis of the S&D principle, see Peter Lichtenbaum, ' "Special Treatment" vs. "Equal Participation": Striking a Balance in the Doha Negotiations', 17 Am U Int'l L Rev 1004 (2002). See also John Whalley, 'Special and Differential Treatment in a Millennium Round', CSGR Working Paper 30/99, May 1999, available at http://www.warwick.ac.uk/fac/soc/CSGR/wpapers/wp3099.PDF; Constantine Michalopoulos, 'The Role of Special and Differential Treatment for Developing Countries in GATT and the World Trade Organization', working paper dated 2000, available at http://www.worldbank.org/research/trade/archive.html.
32. See Committee on Trade and Development, Implementation of Special and Differential Treatment Provisions in the WTO Agreements and Decisions, WT/COMTD/W/77 (25 October 2000).
33. BISD, 13th Supp. (1965).
34. See Hudec above n 15, at 58.
35. See, e.g., Constantine Michalopoulous, 'Developing Country Strategies for the Millennium Round', 33(5) J World Trade 1, 25 (1999); Hudec, above n 15, at 46.
36. See, e.g., Constantine Michalopoulous, 'Developing Country Strategies for the Millennium Round', 33(5) J World Trade 1, 25 (1999); Hudec, above n 15, at 46.
37. Paragraph 42 of the Doha Ministerial Declaration provides a commitment to the objective of duty-free, quota-free market access for products originating from least developed countries. If realized, this commitment could be of some importance.
38. Hudec above n 15, at 210-15. India has begun dispute settlement proceedings against the EC in connection with the EC's conditions applicable to its generalized system of preferences. Request for Consultations by India, European Communities - Conditions for the Granting of Tariff Preferences to Developing Countries, WT/DS264/1, 12 March 2002.
39. Caglar Ozden and Eric Reinhardt, The Perversity of Preferences: GSP and Developing Country Trade Policies, 1976-2000', working paper dated 24 May 2002, available at http://userwww.service.emory.edu/̃erein/research/gsp2.pdf.
40. See Chantal Thomas, 'Balance-of-Payments Crises in the Developing World: Balancing Trade, Finance and Development in the New Economic Order', 15 Am U Int'I L Rev 1249, 1256 (2000).
41. J. Michael Finger, 'A Diplomat's Economics: Development and Trade Perspectives on the Doha Agenda', working paper dated 10 May 2002 (emphasis in original).
42. See Dani Rodrik and Francisco Rodriguez, Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-National Evidence', in Macroeconomics Annual 2000 (Ben Bernanke and Kenneth S. Rogoff, (eds), 2001).
43. See Oxfam Report, above n 2.
44. See Alan O. Sykes, 'Comparative Advantage and the Normative Economics of International Trade Policy', 1 JIEL (1998), at 69.
45. Jagdish Bhagwati, 'The Poor's Best Hope', The Economist (20 June 2002), at 24.
46. Paragraph 16 of the Doha Declaration calls for the reduction of tariff peaks and tariff escalation.
47. Bernard Hoekman, 'Strengthening the Global Trade Architecture for Development: The Post-Doha Agenda', working paper dated January 2002, at 5.
48. Bhagwati, above n 30.
49. Furthermore, developing countries themselves constitute an important export market for other developing countries. Under the Enabling Clause, developing countries may be able to provide enhanced market access to other developing countries, without benefiting wealthy countries on an MFN basis. Of course, opening developing country markets to imports from other developing countries will hurt some people, and will hurt some countries, again putting pressure on adjustment.
50. Dani Rodrik, 'Feasible Globalizations', working paper dated May 2002.
51. See, e.g., WTO Secretariat, 'GATS, Mode 4 and the Pattern of Commitments', dated 12 April 2002, available at http://www.wto.org/english/tratop_e/serv_e/symp_apr_02_carzaniga_e.doc.
52. See J. Michael Finger and Julio J. Nogues, 'The Unbalanced Uruguay Round Outcome: The New Areas in Future WTO Negotiations', working paper dated December 2001.
53. T. N. Srinivasen, 'Developing Countries and the Multilateral Trading System After Doha', Yale University Economic Growth Center Discussion Paper No 842, dated February 2002, available at http://www.econ.yale.edũ/egcenter/research.htm.
54. Avinash Dixit, The Making of Economic Policy: A Transaction Cost Politics Perspective (MIT Press 1996).
55. I address the distributive effects of the TRIPS agreement in greater detail below.
56. Rodrik, above n 35.
57. See Alan O. Sykes, 'TRIPS, Pharmaceuticals, Developing Countries and the Doha "Solution" ', John M. Olin Law & Economics Working Paper No 140 (2d series) (2001), University of Chicago Law School, available at http://www.law.uchicago.edu/Lawecon/index.html.
58. This type of redistribution through abrogation or renegotiation of agreements has some precedent in the periodic renegotiation of foreign debt, or expropriation of foreign direct investment. See Joel P. Trachtman, 'Foreign Investment, Regulation and Expropriation: A Debtor's Jubilee?', 82 Proceedings of the American Society of International Law 103 (1995).
59. See Sykes, above n 42; see also Frederic M. Scherer, Industry Structure, Strategy and Public Policy (HarperCollins 1996) 362-66.
60. See Sykes, above n 42; see also Frederic M. Scherer, Industry Structure, Strategy and Public Policy (HarperCollins 1996) 362-66.
61. Srinivasen, above n 38, at 13.
62. This argument is made more complicated, but is not refuted, by the fact that these rights are generally only recently acquired.
63. Dani Rodrik, Arvind Subramanian, and Francesco Trebbi, 'Institutions Rule: The Primacy of Institutions over Geography and Integration in Economic Development', Harvard Center for International Development Paper No 97, October 2002, available at http://www.cid.harvard.edu/cidwp/pdf/097.pdf. Rodrik et al refer to Daron Acemoglu, Simon Johnson, and James A. Robinson, 'The Colonial Origins of Comparative Development', 91(5) Am Econ Rev 1369 (2001).
64. Dani Rodrik, Arvind Subramanian, and Francesco Trebbi, 'Institutions Rule: The Primacy of Institutions over Geography and Integration in Economic Development', Harvard Center for International Development Paper No 97, October 2002, available at http://www.cid.harvard.edu/cidwp/pdf/097.pdf. Rodrik et al refer to Daron Acemoglu, Simon Johnson, and James A. Robinson, 'The Colonial Origins of Comparative Development', 91(5) Am Econ Rev 1369 (2001).
65. See Leif Wenar, 'Contractualism and Global Economic Justice', in Thomas W. Pogge (ed), Global Justice (Blackwell 2001), at 84.
66. The World Bank's International Development Association (IDA) administers a 20-factor 'Performance Based Allocation' system, which reviews a number of different features of development policy as a basis for lending. However, this system does not provide substantial room for country-specific determinations of appropriate policies. See 'Linking IDA Support to Country Performance: Third Annual Report on IDA's Country Assessment and Allocation Process', April 2002, available at http://siteresources.worldbank.org/IDA/Resources/PBA2002.pdf.
67. See Michael Massing, 'Challenging the Growth Gurus: A Bitter Feud Is Heating up over Development Policy', NY Times (19 October 2002), A19, 21. In that article, Dani Rodrik is quoted as saying 'Trade reform is something that has to be tailored to each country's circumstances, taking into account its geographic advantage, its institutional needs, its relations with its main trading partners.' The article goes on to say that 'Such an approach troubles Jagdish Bhagwati, a colleague of Mr Stiglitz' at Columbia and a strong advocate of free trade. Joe assumes that there's a monolithic view at the fund and the bank, but that's not the case.' Thus, there seems to be agreement that a 'monolithic' approach would not make sense.
68. Monterrey Consensus, UN Doc A/Conf.198/3, 22 March 2002, para 42. Even these minimal goals are not being met.
69. Rawls makes this argument explicitly at John Rawls, The Law of Peoples 8 (Harvard University Press 1999).
70. See, e.g.: Joseph Stiglitz, Globalization and Its Discontents (W.W. Norton 2002). But see, 'Letter from Kenneth Rogoff to Joseph Stiglitz', dated 2 July 2002, available at http://www.imf.org/external/np/vc/2002/070202.htm.
71. See, e.g.: Joseph Stiglitz, Globalization and Its Discontents (W.W. Norton 2002). But see, 'Letter from Kenneth Rogoff to Joseph Stiglitz', dated 2 July 2002, available at http://www.imf.org/external/np/vc/2002/070202.htm.
72. See, e.g., Anne Krueger, 'International Financial Architecture for 2002: A New Approach to Sovereign Debt Restructuring", 26 November 2001, available at http://www.imf.org/external/np/speeches/2001/112601.htm; Richard N. Cooper, 'Chapter 11 for Countries, Foreign Affairs' (July/August 2002), at 90.
73. See, e.g., Anne Krueger, 'International Financial Architecture for 2002: A New Approach to Sovereign Debt Restructuring", 26 November 2001, available at http://www.imf.org/external/np/speeches/2001/112601.htm; Richard N. Cooper, 'Chapter 11 for Countries, Foreign Affairs' (July/August 2002), at 90.
74. 'Nobody made a greater mistake than he who did nothing because he could do only a little.' Edmund Burke.