The WTO - a force for good

While the WTO Panel acknowledged that smoking constituted a serious risk to human health, it determined that Thailand could have used any number of less restrictive methods to achieve this end. The WTO Panel looked beyond the pretence of “protecting health” to the reality of whether the use of the exception constituted a disguised barrier to trade. In this circumstance, it did.

Fact: the WTO has been instrumental in bringing the rule of law to developing and developed nations.

One oft-forgotten aspect of the WTO is how instrumental it has been to bringing the rule of law into International Law and directly into the legal systems of newly acceding members.

The Accession Protocol of the People’s Republic of China, for example, imposed obligations on China to publish all laws affecting international trade and to ensure that judicial review of administrative actions is available in trade matters. The WTO forced China to give judicial review of governmental action as of a right. Now that certainly is something worth writing home about.

Russia is currently negotiating its own accession protocol to the WTO. Given the precedent set by China’s accession, it will no doubt be entirely within the reach of the WTO members to impose similar rule of law conditions on Russia.

Elsewhere within the WTO, aspects of the rule or law, or at least good governance are evident. Member states are required to publish national laws and precedents affecting trade obligations (Article X GATT, Article III GATS, and Article 63 TRIPS). Article X of the GATT requires member states to administer rules in a uniform, impartial and reasonable manner.

There are extensive procedural requirements in the administration of countervailing duties, such as anti-dumping measures and subsidies. The most groundbreaking work by the WTO, however, has been the transparency measures introduced in the Plurilateral Agreement on Government Procurement. Tender procedures for government contracts, for example, must be published by governments.

Furthermore, Rule of Law obligations are justiciable within the WTO itself. Affected member states can take action against another member in breach of such obligations. The dominance of WTO agreements and jurisprudence by rule of law principles illustrates that the international trading system has largely moved away from a power-oriented system to a rule-oriented system.

Fact: the WTO has brought about massive changes to the tariff and trading regime to the benefit of all members.

Over the years since the GATT 1947, the predecessor of the WTO (formed in 1995 as a result of the Uruguay Round of Trade Talks), barriers to trade have been substantially reduced. Trade distortive quantitative restrictions (such as quotas) in all areas of trade have now been eliminated (Article XI GATT). Reform of rules governing subsidies is finally taking place under the Subsidies and Countervailing Measures Agreement. The TRIPs Agreement brought uniformity to international intellectual property law.

The Dispute Settlement arm of the WTO ensures that member states have a predictable and reliable arena in which their trade disputes can be solved, without needing to resort to destructive retaliatory tariffs. The members concerned have direct involvement in who is appointed and the conduct of the proceedings, as equal members of the WTO.

The WTO still has far more work to do. There are of course aspects of the WTO that are subject to debate and still need reform, especially in Agriculture. But the WTO still provides the basic structure of an organisation capable of taking account of non-trade concerns, while introducing into international law and indeed in members’ own legal systems, important rule of law principles.

The WTO’s core strength is that its members drive its progress and control its policy direction.