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Sovereignty and Developing Countries: Current Status and Future Prospects at the WTO

Published online by Cambridge University Press:  01 June 2009

HANS MAHNCKE
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Extract

Globalization, as evidenced in increased trade, economic development, and the emergence of new global powers, has meant that the world economy has undergone significant changes over the past two decades. The World Trade Organization (WTO) is more than a potent representation of these developments, it is often seen, along with its predecessor, the General Agreement on Tariffs and Trade (GATT), as having enabled the process of globalization. However, there are profound concerns about what lies ahead in an increasingly complex economic and regulatory setting, in particular for developing countries (DCs).

Type
REVIEW ESSAY
Information
Leiden Journal of International Law , Volume 22 , Issue 2 , June 2009 , pp. 395 - 409
Copyright
Copyright © Foundation of the Leiden Journal of International Law 2009

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References

1 R. Senti and H. Mahncke, A Guide to the World Trade Organization (2008), 39–43.

2 The Doha Round is the ninth round of GATT and WTO negotiations held since 1947. It commenced in 2001 with the aim of achieving further trade liberalization and an improved regulatory framework, especially with a view to helping developing countries.

3 The WTO itself, on its website, states that ‘Above all, [the WTO] is a negotiating forum’, www.wto.org/english/thewto_e/whatis_e/tif_e/fact1_e.htm (last visited 30 September 2008); see also J. A. Marchetti in WTO and DCs.

4 See, e.g., J. H. Jackson, Sovereignty, the WTO and Changing Fundamentals of International Law (2006).

5 Strictly, there are also those who maintain that, as a consequence of globalization, sovereignty over economic matters rests with neither states nor international organizations, but rather with private enterprise. However, a review of such unconventional perspectives would go beyond the scope of the present study, especially as only countries and customs territories are able to join the WTO. See S. Strange, The Retreat of the State: The Diffusion of Power in the World Economy (2006).

6 While the meaning of the term ‘sovereignty’ is subject to debate, the present study, by asking who determines the terms of trade in the WTO context, will focus on its meaning in a narrow sense, as defined in section 3.

7 GATT Secretariat, The Results of the Uruguay Round of Trade Negotiations – The Legal Texts (1994), 321–52.

8 Ibid., at 286–319.

9 Such conduct is termed ‘efficient breach’. See A. Hatzis, ‘Civil Law and Economic Reasoning: An Unlikely Pair’, http://papers.ssrn.com/sol3/papers.cfm?abstract.id=661661 (last visited 31 December 2008).

10 Steinberger, H., ‘Sovereignty’, in R. Bernhardt (ed.), Encyclopedia of Public International Law, Vol. 2 (2000), 518Google Scholar; N. Walker, Sovereignty in Transition (2003); R. Jackson, Sovereignty: Evolution of an Idea (2007).

11 Treaty of Westphalia, 24 October 1648, available at http://fletcher.tufts.edu/multilaterals.html (last visited 31 December 2008).

12 WTO members are obliged to accord all advantages, favours, privileges, and immunities which they accord to any one country, or to a national of another state in relation to trade in goods, services, or as regards intellectual property rights, immediately and unconditionally for like goods, services, and intellectual property rights, to all other WTO members and their nationals. See Senti and Mahncke, supra note 1, at 2, 25–9.

13 C. Coglianese, ‘Globalization and the Design of International Institutions’, in J. S. Nye and J. D. Donahue (eds.), Governance in a Globalizing World (2000), 298–300.

14 Jackson, J. H., ‘International Economic Law in Times that Are Interesting’, (2000) 3 Journal of International Economic Law 3CrossRefGoogle Scholar.

15 Jackson seems to neglect that, although there is a history of consensus decision-making, the WTO Agreements provide for decision-making by majority. See Senti and Mahncke, supra note 1, at 17–18.

16 M. Gallagher, ‘China's Accession to the WTO: The Legal Perspective’, Chinese Law Society Symposium, University of Michigan School of Law, 11 April 2001.

17 A. Ferrer, Accession of Panama to the WTO: Implications for Developing Countries Joining the World Trade System (2001), 182–5.

18 M. Gallagher, P. Low, and A. L. Stoler, Managing the Challenges of WTO Participation: 45 Case Studies (2006), 21–2.

19 This conclusion is supported by the voluntary nature of the MFN and National Treatment commitments under GATS. See Senti and Mahncke, supra note 1, at 73–5.

20 Agreement on Trade-Related Aspects of Intellectual Property Rights, supra note 7, at 321–53.

21 See section 3.2. above.

22 R. Jennings, ‘Sovereignty and International Law’, in G. Kreijen (ed.), State, Sovereignty, and International Governance (2002), 35–8.

23 E. de Vos, ‘The Cotonou Agreement: A Case of Forced Regional Integration?’ in Kreijen, supra note 22, at 507–12.

24 G. Harpaz, ‘Regionalism, Economic Interdependence, Approximation of Laws and their Impact on Sovereignty, National Identity, and Legitimacy: The Euro-Med Case’, in T. Broude and Y. Shany (eds.), The Shifting Allocation of Authority in International Law (2008), 315–18.

25 The conclusion of free trade agreements is authorized by Article XXIV of the GATT and Article V of the GATS, supra note 7.

26 Senti and Mahncke, supra note 1, at 27–9.

27 There are numerous examples of unequal bargaining power in bilateral FTA negotiations. For instance, during the US–Singapore free trade negotiations, the United States insisted on imposing an obligation on Singapore to introduce a generic competition law into its national legislation. See ch. 12, 2003 US–Singapore Free Trade Agreement, signed 6 May 2003, entered into force 1 January 2004, available at www.ustr.gov/Trade_Agreements/Bilateral/Singapore_FTA/Final_Texts/Section_Index.html (last visited 31 December 2008).

28 Senti and Mahncke, supra note 1, at 27–9.

29 United States – Import Prohibition of Certain Shrimp and Shrimp Products, Appellate Report, adopted 6 November 1998, AB-1998–4, WT/DS58/AB/R, paras. 153–155.

30 Another development which suggests that the courts have seized a measure of legislative authority is the fact that, at the Appellate Body level, previous decisions tend to be treated as binding on future courts. See United States – Final Anti-Dumping Measures on Stainless Steel from Mexico, Appellate Report, adopted 20 May 2008, AB-2008–1, WT/DS344/AB/R, para. 160: ‘[A]bsent cogent reasons, an adjudicatory body will resolve the same legal question in the same way in a subsequent case.’

31 For instance, by allowing discrimination among GSP beneficiary countries; see European Communities – Conditions for the Granting of Tariff Preferences to Developing Countries Appellate Report, adopted 7 April 2004, AB-2004–1, WT/DS246/AB/R. Or by reviewing anti-dumping measures in a manner which may contravene Article 17(6)(ii) of the Anti-dumping Agreement; see United States – Laws, Regulations and Methodology for Calculating Dumping Margins (‘Zeroing’), Appellate Report, 18 April 2006, AB-2006–2, WT/DS294/AB/R. Or by interpreting the GATT Article XX exceptions broadly, supra note 29.

32 Senti and Mahncke, supra note 1, at 18–21.

33 This case commenced in early 1996 and remains unresolved. See EC – Regime for the Importation, Sale and Distribution of Bananas, Panel Report, adopted 25 May 1997, WT/DS27/R; Appellate Report, adopted 9 September 1997, WT/DS27/AB/R; Arbitration under Article 21.3.c, Decision by the Arbitrator, WT/DS27/15, 7 January 1998; Recourse to Arbitration by the EC under Article 22.6, Decision by the Arbitrators, WT/DS27/ARB, 9 April 1999; Recourse to Article 21.5 by Ecuador, Panel Report, WT/27/RW/ECU, 12 April 1999; Recourse to Article 21.5 by the EC, Panel Report, WT/27/RW/EEC, 12 April 1999; Second Recourse to Article 21.5 by Ecuador, Panel Report, WT/DS/RW2/ECU, 7 April 2008; Recourse to Article 21.5 of the DSU by the United States, Panel Report, WT/DS27/RW/USA, 19 May 2008 (note: an appeal was filed on 28 August 2008); see also Jackson, J. H. and Grane, P., ‘The Saga Continues: An Update on the Banana Dispute and Its Procedural Offspring’, (2001) 4 Journal of International Economic Law 581CrossRefGoogle Scholar.

34 United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services, Appellate Report, adopted 7 April 2005, AB-2005–1, WT/DS285/AB/R.

35 United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services, Decision by the Arbitrator, adopted 21 December 2007, WT/DS285/ARB.

36 D. Palmer, ‘EU Gambling Firms See WTO Case Coming against US’, Reuters, 18 September 2008, http://us.mobile.reuters.com/mobile/m/FullArticle/p.rdt/CCOMPR/ncompanyNewsAndPR_uUSN1726130920080918.

37 The decision in a case is binding on the parties to the case.

38 Iida, K., ‘Is WTO Dispute Settlement Effective?’, (2004) 10 Global Governance 207Google Scholar; G. Sacerdoti, ‘The Dispute Settlement System of the WTO: Structure and Function in the Perspective of the First 10 Years’, Bocconi Legal Studies Research Paper No. 07–03, March 2007, Social Science Research Network, http://ssrn.com/abstract=981029 (last visited 31 December 2008).