This post was authored by PD Dr. iur Krista Nadakavukaren Schefer, who is the Co-Head of Legal Services at the Swiss Institute of Comparative Law. Previously working with the Swiss Center for Human Rights Studies at the University of Zurich and the law faculty of the University of Basel, she continues to teach at the universities of Basel and Bern, as well as at the World Trade Institute, Bern. Her research interests cover a wide range of topics relating to trade and investment, but she mainly focuses on the questions of how the system of International Economic Law interacts with the general international law rules relating to natural and human resources. Dr. Nadakavukaren Schefer holds a JD from Georgetown University Law Center and a doctorate and Habilitation from the University of Bern.
I have to admit that as a twenty-something year veteran of international economic law (IEL), it is somewhat refreshing to have the topics of World Trade Organization (WTO) law and investment law near the top of the current news cycles. Finally, a reason for students to take my classes and a signal to my colleagues that what I have been doing is not some exotic, irrelevant, somewhat frivolous legal specialty with no real value to the hard work of educating our future lawyers! (Yes, it is true – Swiss law students tend to veer away from electives such as WTO law in favor of something “important”, such as bankruptcy law or medical law; and Swiss law professors tend to think that IEL is not “real” international law.)
But now, taking a cursory look at the newspapers, I think to myself as to whether I should redeem my choice to study about the questions arising out of the movement of capital, goods, and services across borders. The North American Free Trade Agreement (which, at signing, was truly innovative with its investment protection chapter and “Side Agreements” on environment and labor) is “teetering” (as the Guardian reports) on the edge of collapse as I write. Its life, quite ironically, depends as much on the Canadian government’s willingness to stand firm on its traditional protectionism toward its dairy farmers as on its commitment to an effective dispute resolution mechanism and well-founded demand for an agreement without an expiry date.The European Union, as the world’s pre-eminent customs union, is in a struggle with its own Member States to determine whether the benefits of an economic union can overcome the political pressure to prioritize an (often mythological) national identity over its legal commitments towards deeper integration of human rights and social progress. The shadow of Brexit exemplifies this tension, but the growing fissures in the unification project are seriously worrisome given the advocates’ frequent appeals to racism and xenophobia.
And the WTO itself – the jewel in the IEL crown – is on the international organization’s equivalent of death row. Having failed to definitively commit to progress for development, its Members’ repeated mouthing of the words “development agenda” is becoming more and more of a farce – and recognized as such. Facing a continued impasse on incorporating environmental and labor values into the text of the treaties, there is also justified criticism of the Organization from civil society groups concerned with the sustainability of economic globalization. The efforts by the Appellate Body (AB) to reassure us that protecting endangered species is a legitimate interpretation of “conservation of natural resources”,[1] that public morals can legitimately excuse bans on the importation of seal skins from commercial hunts,[2] and the head-spinning victory of finding that a tobacco control program can actually be implemented by a WTO Member government as part of a multi-year campaign to prevent unnecessary morbidity and mortality have not made the fears of the public go away.[3](Indeed, the WTO jurisprudence is suspiciously reminiscent of Qeen Gertrude’s recognition of the reality behind too much protest[4] to put much faith in the long term compatibility of sustainability and traditional WTO notions of liberalism.) Nor has it made the dispute settlement mechanism (particularly the Appellate Body) any more liked by the WTO Members. The responsiveness of the (remaining) AB Members to reading treaty texts in ways with which governments may disagree feeds existing complaints and lays a foundation – no matter how cynically put down – for accusations of “activism” and bias. Having failed to engage with the Members to further necessary reforms of the Dispute Settlement Understanding while goodwill toward the system existed, the opportunities to engage in constructive discussions on matters such as procedural timelines and standard of review are now being held hostage to unabashed power politics.
With all of this going on – and with the rise in threats and actual imposition of economic sanctions on individuals and countries– it is hard not to take what comfort there is in knowing that I have not been frivolous in considering the systemic relationships between IEL and the rest of the international law system. Yet, the basic reason for the public’s new and heightened attention to the system reduces what little comfort there is for me personally to near zero. The reason: raw power politics makes any changes to the rules of IEL not only suspect, but dangerous.
To be sure, I have long advocated the need for changes to the system – to protect human rights, to recognize and attempt to reduce corruption, to attend to those living in poverty or to consider how unrestricted trade in “bads” (rather than “goods”) may harm the most disadvantaged parts of the population. But this tide of change is not the one that is going to do that.
Despite the multitude of motivations the critics of the IEL system have (many, indeed, coming from the “liberal” arm of civil society), the loudest voices today are not those looking to fix the weaknesses of the system or to reshape it to fulfill a broader palette of interests (including those of human rights, labor and environmental protection, or mitigating climate change). Rather, they are the voices of those who would eliminate the system and replace it with one whose members would have to kneel before the strongest players. In the world of IEL, the strongest players are those with the largest domestic markets but – as it just so happens – the very largest also have the biggest militaries. Is it too pessimistic to think that if the current IEL trajectory does not change, the distance between trade wars and military wars will shrink? With trade being considered a “security issue”, a blurring of the lines is more than just possible. Nationalist-inspired trade rules are not only antithetical to the current WTO rules. They are willfully anti-cosmopolitanism, based on a zero-sum game mentality that cannot allow for regarding the plight of the foreign “other”. The power play behind current nationalist attacks on the WTO is attempting to underline the gap between us and them by eliminating even the show of adhering to agreed-upon legal rules and destroying the institutional structures which could protest the violations.
So what are we to do? Well, for starters, I would argue that this is not a moment in which we should abandon all critical thinking about the problems of the IEL system. Inequality of resources still matters – a lot. Destruction of the environment still matters – existentially. The plight of laborers, the public values of societies, the health of populations all still matter – tremendously. Indeed, it is because these concerns remain that we must be particularly vigilant in thinking about which parts of the system need to be overhauled and which only tweaked. We need also to consider how the IEL system can learn from and reach out to other international – or even domestic – legal institutions to form solutions to the problems we detect.
Above all, however, perhaps we need to become a new kind of nationalist – rule of law vigilants that attend as much to our national justice institutions as we do those of the international system. We as scholars, practitioners, and negotiators need to grasp our role as citizensand use the opportunities we have at home to ensure that our national governments uphold the rule of law internationally and at home. We need to demand not only that the international institutions governing trade and investment are well-governed, but that the domestic authorities who ultimately form the authority behind the international system are committed to good governance.
Only by ensuring that the rule of law remains the guiding principle for organizational change can we protect ourselves and our global neighbors from arbitrary – or worse – despotic – rejection of the protections that the systems offered. With a strong rule of law motivating the change, we can at least have a chance at ensuring that the new rules will be legitimate, just, and resilient against threats from within as well as from outside.
Endnotes:
[1] Appellate Body Report, United States- Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R (October 12, 2998).
[2] Appellate Body Report, European Communities — Measures Prohibiting the Importation and Marketing of Seal Products, WT/DS400/AB/R ; WT/DS401/AB/R (May 22, 2014).
[3] Panel Report, Australia — Certain Measures Concerning Trademarks, Geographical Indications and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging, WT/DS435/R ; WT/DS441/R ; WT/DS458/R ; WT/DS467/R, (June 28, 2018).
[4] “The lady doth protest too much, me thinks.” William Shakespeare, Hamlet, Act III, Scene 2.
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