VoxEU Column Institutions and economics International trade

Seeping in slowly: The WTO and human rights

Critics argue that WTO rules are antagonistic to human rights. This column examines how WTO members have sought to promote human rights and trade, and what they have done when these obligations compete. It concludes that WTO rules are not antagonistic to human rights, though some members’ trade policy decisions have created conflicts.

The world’s most misunderstood international organisation sits in a grand palace on the shores of Lake Geneva. The building’s grandeur stands in stark contrast to the organisation’s popularity. This organisation, once a club called the General Agreement on Tariffs and Trade (GATT), was created by the post World War II planners in 1947-1948. Now called the World Trade Organization, or WTO, it has been a formal international organisation since 1995.

Trade has grown dramatically under the aegis of the GATT/WTO, and thus the organisation has played an important role in global economic growth and development. Yet many people do not see the WTO as acting in their interest. Perhaps the most stinging criticism of the WTO relates to human rights.

In recent years, some observers have argued that the WTO system of rules undermines human rights delineated under the Universal Declaration of Human Rights (Rights and Democracy 2000, Oxfam 2001).1 Trade policies and agreements can undermine some rights and enhance others.2 In fact, the WTO is agnostic on human rights; but its rules constrain the ability of national policymakers to use trade-distorting policies to advance human rights (or to achieve other policy goals).

If policymakers from member states want to use trade policies to protect particular human rights at home or advance human rights abroad, they must do so without violating GATT/WTO norms of most favoured nation (MFN), national treatment and like product. MFN rules require member states not to discriminate among other member states – thus, benefits granted to one member must automatically be granted to another. National treatment rules require member states to treat the products of foreign firms as those of local firms. And policymakers can not discriminate between products originating in different countries nor between imported goods and like domestically produced goods. These norms make it harder to limit imports from nations where citizens may be subject to human rights abuses as they produce goods and services.

Rather than try to assess whether the WTO undermines or advances human rights, I have examined what the member states do in response to pressures to promote human rights and trade.3 Specifically, I have focused on how these nations behave at the WTO in response to these concerns.

I found that human rights are seeping into WTO activities. Members of the WTO are learning how to achieve both policy goals. Officials have at times found ways to clarify or rewrite WTO rules to ensure that national policymakers had space to achieve trade and human rights objectives. It is not easy.

Table 1. Where human rights may enter the WTO System

Accessions Nations have not introduced human rights concerns per se in accessions, but some members have become increasingly concerned about human rights and in particular, the rule of law in acceding countries. In China’s accession, it was asked to enforce all of its laws in all of its territories including export-processing zones.
Non-application When nations accede, WTO members may choose not to extend trading rights and privileges.
General exceptions Article XX includes language allowing nations to restrict trade when necessary to protect life, protect public morals, secure compliance, or conserve natural resources. Article XXI allows member states to restrict trade for reasons of national security.
Waivers The Kimberley waiver for conflict diamonds was the first waiver approved for a human rights purpose. It was stimulated by UN Security Council Resolution and broad member interest and support.
Dispute settlement There have been no disputes that centred directly on human rights questions. The first dispute on public morals was in 2005. Food safety disputes to some degree centre on the right to health (but are not explicitly defended as human rights concerns).
Trade policy reviews The WTO Secretariat and member states jointly review trade policies and practices of member states. Larger trading nations are reviewed more frequently. Officials increasingly bring up human rights concerns in these discussions.
Amendments to existing agreements or clarification WTO members recognise there are times when they need to provide greater guidance to member states. In amendments, members agree to alter existing agreements to stipulate what member states can or can not do, as in intellectual property rights (IPR) and the right to health. In addition, members have agreed to further discussions to clarify the relationship between IPR and traditional knowledge.4
Negotiations Some members sought to include labour rights in negotiations, but failed. There are no direct human rights negotiations in Doha Round, but many issues such as agriculture and services could affect the ability of governments to advance human rights positively or negatively. As these negotiations are in progress, they are not discussed herein.

 

Human rights issues are constantly seeping into the workings of the WTO. For example, the US tried to prod Vietnam to agree to certain labour rights conditions during its accession negotiations. Vietnam refused, but it did seek the help of the International Labour Organisation and World Bank to improve its monitoring of labour rights. During the first days of the Doha Round in 2001, members agreed to amend the TRIPS agreement to ensure access to affordable medicines among member states. In response to UN concerns, in 2003, WTO members worked to ensure that trade in diamonds did not fuel conflict or human rights abuse in countries such as the Congo or Sierra Leone. Under the Kimberley process waiver, member states agreed to waive WTO rules and trade only diamonds certified to not have been produced in conditions of human rights abuse.

Human rights issues have also been dribbling into WTO Trade Policy Reviews. During China’s 2006 review, members expressed concern about China’s commitment to access to information and public participation. Some nations, such as Ecuador, used their review to discuss children’s and women’s rights and to show the efficacy of their court system. In its 2005 review, Egypt’s representative stressed that Egypt had put in place new laws to foster political participation and to strengthen civil society. During the US and EC reviews, other member states challenged the two trade giants for their focus on linking trade and labour rights.

The dispute settlement body has also dealt with some human rights issues. In 2005, the EC challenged Brazil’s ban on imports of rethreaded tires. Brazil argued that it had banned these imports, because there is no safe way to dispose of these tires and it had a constitutional duty to protect its citizens’ right to health. Brazil was one of the first countries to argue that a trade ban is “necessary” to protect the life and health of its people. It also argued that it had no reasonable alternative to the trade ban to protect the right of health. The Dispute Settlement Panel and later the Appellate Body held that, although the ban was necessary to protect health and the environment, it was applied in a WTO-inconsistent manner. The panel went on to say that Brazil’s ban on imports could be justified as an exception to WTO rules based on public health concerns if the Brazilian government applied the ban without distorting trade. For an overview of this history, see Susan Aaronson and Jamie Zimmerman (2007).5

Finally, human rights issues have also seeped into negotiations. During the Uruguay Round of the GATT (1986-1993), members agreed to discuss non-trade concerns such as food security – the ability of member states to ensure that their people had access to affordable safe food. But they couldn’t agree which countries should be allowed to subsidise the production of food to ensure food security. In Aaronson (2001), I detail these various aspects of WTO day-to-day operations.

From my research, I have concluded that, although many people perceive the WTO system of rules as inherently antagonistic to human rights, these observers are confusing WTO rules with the decisions of some WTO member states. The WTO does not prevent members from protecting human rights, but its rules do constrain them. They require that member states do not distort trade when they try to advance human rights at home or abroad. Moreover, as members have become more aware of the potential for conflict at the intersection of trade and human rights, they have worked at the WTO to find solutions such as waivers or even amending the WTO (as described above) that are both trade-expanding and provide incentives to policymakers to respect human rights.

Nonetheless, members function without clear guidance, and this ad hoc approach – while flexible – leads to uncertainty in trade relations. The 153 members need greater guidance as to how they can address dissonance between human rights and their WTO obligations. I suspect some of these issues will eventually be settled through trade disputes.

References

Aaronson, Susan Ariel and Rod Abouharb (forthcoming) "Building People Power: How the WTO May Promote Some Human Rights Over Time,”
Aaronson, Susan Ariel, 2001, “Seeping in Slowly, How Human Rights Concerns Are Penetrating the WTO,” World Trade Review, 2001 (6):3, 413-449.
Aaronson, Susan Ariel and Jamie Zimmerman, 2007, Trade Imbalance: The Struggle to Weigh Human Rights in Trade Policymaking (Cambridge: Cambridge U. Press, 2007), Chapter 4.
Oxfam 2001, Cut the Cost, Patent Injustice: How World Trade Rules Threaten the Health of Poor People
Rights and Democracy, 2000, ‘Globalization and Human Rights: Policy Seminar’, 19 October.
Rodrik, Dani, 2000, “Trade Policy as Institutional Reform


1 'More recent criticisms from a wide range of groups are summarized at http://www.tradeobservatory.org. From the United Nations, see Office of the High Commissioner for Human Rights, ‘Human Rights and Trade’, 5th WTO ministerial conference, Cancun, Mexico, 9/10–14/2003.
2 In this article, I limit discussion of human rights to the specific human rights outlined in the Universal Declaration of Human Rights. It applies to everyone, regardless of whether or not their government has formally accepted its principles or ratified the Covenants. The member states created covenants to put the human rights into effect. Most of the 153 members of the WTO have ratified the covenants (multilateral conventions). See www.un.org/overview/rights.html
3 In an upcoming paper to be presented at World Trade Institute, Rod Abouharb and I find that over time, membership in the WTO teaches good governance skills, which could over time, spill into the polity. We will discuss these findings in a forthcoming Vox EU article. As Dani Rodrik (2000) has noted, when government officials take steps to meet their trade obligations, they improve many longstanding patterns of government behaviour.
4 Several countries including Brazil, India, Bolivia, Colombia, Cuba, Dominican Republic, Ecuador, Peru, Thailand, and others, have come to recognize that the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement does not protect traditional or indigenous knowledge, which is often passed from one family member or tribal member to another and is not written down or protected under 20th century rules. Policymakers from these countries fear that industrialised country pharmaceutical and agricultural companies plan to use and adapt indigenous knowledge, such as that relating to medicinal plants (e.g. aloe, taxol) without compensating the true owners of such knowledge. As a result, they want to amend TRIPS to make it consistent with the Convention on Biological Diversity (CBD). They have proposed that TRIPS should require patent applicants to disclose the country of origin of genetic resources and traditional knowledge used in the inventions, evidence that they received “prior informed consent” (a term used in the CBD), and evidence of “fair and equitable” benefit sharing. Policymakers from these countries argued that their indigenous knowledge would otherwise be patented without their citizens reaping the economic benefits of such knowledge. In recognition of this perspective, members of the WTO agreed to review Article 27.3(b), which deals with patentability or non-patentability of plant and animal inventions, and the protection of plant varieties. Broadly speaking, it allows governments to exclude some kinds of inventions from patenting, i.e. plants, animals and “essentially” biological processes (but micro-organisms, and non-biological and microbiological processes have to be eligible for patents). However, plant varieties have to be eligible for protection either through patent protection or a system created specifically for the purpose (“sui generis”), or a combination of the two. At Doha, members agreed that the TRIPS Council should evaluate the relationship between the TRIPS Agreement and the CBD, as well as the protection of traditional knowledge and folklore, but these talks have made little progress and many developing countries are frustrated by the slow pace. These countries have demanded that TRIPS be amended to require disclosure on sources of origin of biological material and traditional knowledge. However, in over five years of discussion, they have not reached any agreement. Several countries, including Bolivia, have mentioned this problem in their trade policy reviews. At the Hong Kong Ministerial in December 2005, members agreed to continue this work and to report on it.
5 The WTO summary of this dispute is at http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds332_e.htm. For additional legal analysis, http://www.asil.org/insights070905.cfm or http://worldtradelaw.typepad.com/ielpblog/2007/07/brazil-tyres-th.html.

 

4,304 Reads