The Legitimacy of the WTO - British Institute of ...

The Legitimacy of the WTO - British Institute of ...

The Legitimacy of the WTO Prof. Thomas Cottier 7th Annual WTO Conference BIILC/IIEL London, May 23, 2007 02/18/20 World Trade Institute Berne 1 Introductory Legitimacy v. legality Trust, confidence, reliance and voluntary compliance of law: authority Benchmark: rules and processes not perfect in any polity Urgent need to clarify issues in an era of disintegration of WTO law 02/18/20

World Trade Institute Berne 2 Agenda Main objections to WTO legitimacy Theories of legitimacy The impact of multi-layered governance Substantive issues Procedural issues, in particular decision-making and democracy Conclusions 02/18/20 World Trade Institute Berne 3 Main Objections to WTO

Legitimacy The fatal attraction of WTO Lack of domestic policy space Fragmentation and incoherence in relation to other areas of international law and policy The challenge of distributive justice and poverty alleviation; imbalances (no trickling down) Dealing with MS as a black box The challenge of democratic legitimacy Inefficiency of the negotiating process 02/18/20 World Trade Institute Berne 4 Theories Input and output legitimacy (political science) International Relations Theory

Realist schools Liberal schools Idealist schools Law: Theory of Multi-layered Governance, vertical checks and balances, separation of powers 02/18/20 World Trade Institute Berne 5 Multi-layered Governance WTO law is part of multi-layered governance based upon negotiated delegations of MS powers WTO law is a response to deficiencies and failures of the Nation State WTO essentially overcomes vested interested and rent-seeking protectionism in MS

WTO essentially stabilises and contributes to international peace and prosperity 02/18/20 World Trade Institute Berne 6 Achievements Multilateralisation of tariff and non-tariff policies and law Progressive liberalisation (goods and services) Principles of non-discrimination Most favoured Nation Treatment National Treatment Transparency The Rule of law (DSU) Economic growth 02/18/20

World Trade Institute Berne 7 World Exports in Goods and Services (US$ trillions) High Income Countries Developing Countries Least Developed Countries 15 10 5 1996 1997 02/18/20

1998 1999 2000 2001 2002 World Trade Institute Berne 2003 2004 2005 0

8 WTO data Total Merchandise Exports Growth Rates and Export Shares (%) Average Exports Growh in 2000-2006 0 10 20 Exports Share in 2006 30 40 EU(25)

US China DCs LDCs 02/18/20 World Trade Institute Berne 9 Issues of Substantive Law Does WTO law prevent MS from pursuing policies of redistribution at home? Human Rights policies (e.g. TRIPs)

Climate change (PPMs) Single undertaking, graduation and variable geometry The role and impact of other international bodies Do WTO MS fail to use existing policy spaces? Competition law and policy Labour standards and social policies? 02/18/20 World Trade Institute Berne 10 Issues of Procedural Law Democracy starts at home Should WTO law support and coin democratic trade policy formulation? How to amend transparency and the rule of law? Democracy at the WTO

Consensus based decision-making From de facto to de jure weighted voting The formal status of the Secretariat The formal role of the private sector and NGOs A Parliamentary Assembly 02/18/20 World Trade Institute Berne 11 Conclusions Non-exclusive factors of legitimacy encountered:

Economic growth and prosperity Stability and peaceful relations Rule of law, transparency Participatory decision-making and democratic accountability WTO deserves high level of legitimacy as backbone of the multilateral, multi-layered trading system 02/18/20 World Trade Institute Berne 12

Thank you for your attention! 02/18/20 World Trade Institute Berne 13

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