Global Governance and the WTO

by: Andrew T. Guzman

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The author is Professor of Law, Boalt Hall School of Law, University of California at Berkeley.

Volume 45, Issue 2 (Summer 2004)

Since 1947 the General Agreement on Tariffs and Trade (GATT) and its successor, the World Trade Organization (WTO), have brought about a dramatic reduction in barriers to international trade. The WTO has become one of the world’s most dominant international institutions, established a reasonably effective system of dispute resolution, and developed a nearly universal membership. These achievements, however, have not protected the organization from external criticism or internal challenges.

Indeed, the remarkable success of the GATT/WTO system is, to a significant degree, responsible for the challenges now facing the WTO. Over time, and especially as a result of the Uruguay Round, the GATT/WTO has moved from a system of rules prohibiting trade measures to a system of rules requiring affirmative government actions. The consequence is a WTO engaged in monitoring and adjudicating the legality of domestic rules that are not primarily or exclusively about trade. The relevant WTO obligations include rules governing the protection of intellectual property, service industries, and health and safety measures.  Though each of these WTO rules, with the possible exception of the Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPs Agreement”), has an important connection to liberalized trade, their substance makes it impossible to consider them in strictly trade terms.

The impact of the trading regime is also felt in areas that are not subject to any speciac WTO regulation. For example, environmental policy, human rights, labor, and competition policy are not directly within the jurisdiction of the WTO, but in each of these areas trade and the trading system have influenced policymaking. The influence of WTO obligations on non-trade issues has generated cries of protest from many quarters. Critics argue that the WTO remains a trade institution at heart, and that its forays into what were traditionally considered non-trade areas have caused the non-trade values at stake to be ignored in favor of trade concerns. Thus, the argument goes, the tremendous power of the organization, combined with its efforts to influence policies in non-trade areas, has elevated trade at the expense of other issues.

The dramatic failure of the WTO’s 1999 Ministerial Conference in Seattle demonstrated the dissatisfaction of certain groups with the current state of globalization. Protesters succeeded in drawing attention to their concerns about labor, environmental, and human rights issues. The collapse of the Seattle Ministerial stands as dramatic evidence that international cooperation and globalization is unlikely to continue with a focus on trade alone. Nor is this view limited to those outside the organization. WTO members appear to have recognized that they must address concerns other than those directly linked to trade. At the Doha Ministerial in November 2001, the WTO laid out an agenda for the Doha Development Round that allows for a discussion of some of these non-trade issues, including environment, competition policy, and investment. Extending the reach of the WTO into non-trade areas, however, will clearly not be easy, as was demonstrated when the Cancun Ministerial in September 2003 ended in failure, in part due to disagreement on the question of what to do about investment and competition policy, and in part because of an inability to make progress on agricultural issues.

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