General Issue
Vol. V, No. 2
(Winter '13)

International economic law (IEL) continues to evolve through dialectic processes of unilateral, bilateral, regional and worldwide regulation. The human rights obligations of all UN member states call for ‘normative individualism’ in economic regulation and justify ‘fragmentation’ of state- centred treaties so as to protect human rights and international public goods more effectively for the benefit of citizens. The ‘structural biases’ and often indeterminate rules and principles in competing treaty regimes for multilevel governance of interdependent public goods require protecting transnational rule of law for the benefit of citizens based on ‘consistent interpretations’, ‘judicial comity’ and ‘cosmopolitan re-interpretations’ of IEL so as to protect not only rights of governments, but also of citizens. The political resistance and ‘veto powers’ of self-interested government executives in the UN and the WTO are increasingly circumvented by ‘constitutionalizing’ and ‘judicializing’ IEL ‘bottom-up’ through bilateral and regional agreements and adjudication. International courts cooperating with domestic courts in protecting cosmopolitan rights have been more effective in protecting cosmopolitan rights and other ‘aggregate public goods’ than ‘Westphalian international courts’ prioritizing rights of governments over rights of citizens.

This article has a two-fold purpose: first, to problematize the WTO’s official response to the crisis, particularly its insistence on trade liberalisation as the universally desirable means for stimulating growth; secondly, to reflect on the political economic assumptions underlying calls for greater flexibility to be built in the WTO system. Although the article considers the flexibility debate to be of crucial importance in thinking about the future of the multilateral trading system, it evaluates the stakes in arguing for policy autonomy or ‘developmental legal capacity’ in the context of international trade relations. In this respect, it shows that flexibility arguments share an understanding of multilateral trade relations as governed by competition. While recognising that the role of competition, as opposed to comparative advantage, is important to challenge the assumption about the universal beneficial role of trade liberalisation, the argument this article makes is that accepting competition as the sole or prevalent modality informing multilateral trade relations is problematic from both a normative and a positive perspective. By reflecting on the limitations of an approach that accepts the need ‘to prosper in conditions of global competition’ as its necessary starting point, this article emphasizes the importance of rethinking international trade relations, particularly under conditions of global recession characterised by high levels of inequality.

Development projects may be harmful, most obviously in cases of ill-planned or mismanaged projects, resulting in serious and unmitigated consequences for the enjoyment of human rights. There is a strong argument that today’s international law compels international development agencies (conveying bilateral or multilateral development aid) to respect certain norms, particularly with regard to human rights protection, wherever they intervene. Reflecting a trend toward “accountability,” multilateral development banks have adopted internal rules and review mechanisms. Accountability, however, is “responsibility-lite”, stopping short of full-fledged jurisdictional guarantees. Therefore, it is time to establish institutions that would implement the responsibility of development agencies for breaches of international law, thus creating a stronger incentive for development actors to respect the rights of all stakeholders.

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“Power corrupts, absolute power corrupts absolutely.” Montesquieu, 1689-1755.

The worrisome rise in the number of trade disputes relating to climate change policies leaves no doubt as to the relevance of WTO law to climate change policies. Perhaps the most contentious aspect of the relationship between trade law and climate change policies is the issue of subsidies — while many climate change policies rely heavily on the use of subsidies, WTO law considers subsidies a distortive force and aspires to limit the use of such measures. This article evaluates the compatibility of several climate change programs in light of the WTO law on subsidies. It argues that the current legal framework is unsuitable for the promotion of climate change abatement objectives. This is because relevant considerations such as the urgency of the climate change problem, the many market failures embedded in climate-friendly goods and services, and the political reality currently abundant in many states, are entirely disregarded by the WTO law on subsidies. The recent Canada FIT Panel and Appellate Body Reports seem to accept this critique, and consequently present a modified approach to the interaction between the WTO law on subsidies and the climate change challenge. Another promising route of action can be found in the model reflected in an agreement recently concluded between the EU and China, in which, prima facie, the parties decided to include non-commercial considerations as relevant for their own trading relations. These two recent developments may signify a change in the approach towards the interaction between trade law and climate change, as well as a realisation that the current legal framework should be re-evaluated.

In 2006, the so-called NAMA 11 submitted a proposal for the “Resolution of Non- Tariff Barriers (NTBs) through a Facilitative Mechanism” [popularly known as Horizontal Mechanism] within the WTO, which shall be detached from the formal resolution mechanism under the Understanding on Rules and Procedures Governing the Settlement of Disputes [DSU]. This Note provides a brief overview of the scope and procedures of the proposed Horizontal Mechanism. Then, it evaluates the merits of the proposed Horizontal Mechanism vis-à-vis the existing formal resolution mechanisms under the DSU. As the proposal emanated from a group of developing countries, special consideration has been given to their interests while evaluating the feasibility of the proposed new system.