Jean Monnet Center at NYU School of Law


10. Human Rights and the Global Integration Law of the WTO

The numerous references in WTO law to the law of other worldwide organizations (such as the UN, the IMF and the World Bank) demonstrate the obvious fact that the WTO objective of maximizing individual and social welfare through worldwide division of labor cannot be realized without other supplementary worldwide agreements, such as the IMF rules on the promotion of stable exchange rates and on liberalization of current payments and capital flows. Can WTO law - as the most important legal and institutional framework for the worldwide liberalization of welfare-reducing discriminatory barriers to the international flow of goods, services, investments and persons - realize its ambitious goals of "global freedom", market integration, worldwide rule-making and rule of law without regard to universally recognized human rights?

The legal, political and economic arguments for interpreting WTO rules in conformity with universally recognized human rights have already been mentioned (e.g. in section 1 above). Yet, can the adjustment of WTO law to universal human rights be left to WTO judges who may be unfamiliar with human rights and the jurisprudence of human rights courts (notably those WTO panel members and Appellate Body member who are no lawyers)? How will the trade specialists in the WTO Secretariat react who have to advise and assist WTO panels in the drafting of dispute settlement reports? Will the trade diplomats in the WTO's Dispute Settlement Body adopt panel and appellate reports suggesting "new human rights interpretations" of WTO rules? How to deal with the risk of protectionist abuses of human rights arguments for justifying trade restrictions? Since the WTO perceives itself as a "member-driven organization" where multilateral rule-making will succeed in overcoming domestic protectionist pressures only with the help of political support by powerful export industries: Will economists and industries change their declared preference for "specialized organizations" and "separation of policy instruments"? Will human rights activists and UN human rights bodies support integration of human rights into the WTO? How will other worldwide organizations (like the World Bank and the IMF) react to a new "integration paradigm" linking trade liberalization and its adjustment problems to promotion of economic and social human rights and joint financial "burden sharing" (as in European integration)?

The values underlying WTO law - such as protection of legal freedom, property rights, non-discrimination, rule of law, access to courts, economic welfare and national sovereignty to pursue non-economic policy objectives that are considered more important than liberal trade - mirror corresponding human rights principles. Even though WTO law nowhere explicitly refers to human rights, it serves manifold "human rights functions" across frontiers. Given the widespread bias among human rights lawyers vis-à-vis economics and WTO law, and the agnostic attitude of many trade specialists vis-à-vis human rights, it is an important task of academics to promote more dialogue and better understanding among these different communities of trade specialists and human rights advocates so as to render both human rights law and WTO law more effective in dealing with worldwide poverty, health and human rights problems.

A.Human Rights Functions of WTO Guarantees of Freedom, Non-Discrimination and Rule of Law

In contrast to most human rights treaties, the WTO guarantees of freedom, non-discrimination and rule of law go far beyond national constitutional guarantees in most countries which tend to limit economic freedom to domestic citizens and, for centuries, discriminate against foreign goods, foreign services, foreign investors and foreign consumers (e.g. by permitting export cartels). By extending equal freedoms across frontiers and subjecting discretionary foreign policy powers to additional legal and judicial restraints ratified by domestic parliaments, WTO law serves "constitutional functions" for rendering human rights and constitutional restraints more effective in the trade policy area.129 Economic theory confirms the constitutional value of liberal trade: trade transactions are voluntarily agreed upon only if they are mutually beneficial for the seller and the buyer; and the economic gains from trade do not depend on the nationality of traders. Political theory points to additional gains from peaceful trade cooperation, such as promotion of freedom and "positive peace". Modern theories of justice justify the WTO objective of maximizing equal freedom across frontiers by the ethical "categorical imperative" (Kant) and by the rational self-interest of all individuals in equal freedom and mutually beneficial cooperation.130 In case of potentially negative implications of liberal trade (such as trade in arms and transboundary movements of environmental waste), WTO law provides for generously drafted "exceptions" which allow unilateral national safeguard measures including governmental restrictions of freedom and property rights for the benefit of other, more important human rights (e.g. limitations of intellectual property rights so as to allow "parallel imports" of medicines at socially affordable prices, cf. Articles 6 and 8 of the TRIPS Agreement).

Constitutional theory (e.g. by Kant and Rawls) and practical experience (notably in European integration) demonstrate that national constitutions cannot effectively protect human rights and democratic peace across frontiers without complementary international constitutional restraints on foreign policy powers and cosmopolitan guarantees of human rights vis-à-vis foreign governments.131 For example, just as all states guarantee freedom of trade inside their national boundaries, effective protection of the human rights of their own citizens requires to constitutionally protect also freedom to produce, trade and consume across frontiers as an indivisible part of individual liberty, as in EC law. Domestic political support for this objective can be achieved more easily through reciprocal international agreements rather than through unilateral national legislation.132 Yet, even though WTO rules are formulated in terms of international rights and obligations of governments, they serve human rights functions for protecting individual liberty, non-discrimination, rule of law and welfare-increasing cooperation among domestic and foreign producers, investors, traders and consumers across frontiers.

B. The Struggle for Protecting Human Rights across Frontiers: The Example of Liberty Rights as "Negative", "Positive" and "Institutional Guarantees"

The idea and legal recognition of "basic individual rights", "fundamental rights" and "human rights" goes back to the beginnings of written history. Precursors include the rights to asylum granted by Greek city-states; Roman citizenship rights; rights of the nobility in the Middle Ages (e.g. in the Magna Carta 1215); religious freedom protected in the constitutional charter adopted by the Dutch provincial assembly at Dordrecht in 1572; the English Habeas Corpus Act of 1679 and Bill of Rights of 1689; the French Declaration of the Rights of Man and the Citizen of 1789; and the Bill of Rights appended to the US Constitution in 1791. The particular focus of liberty rights (e.g. freedom of religion, freedom of association, freedom to demonstrate) was often shaped by historical events (such as the schism of the Christian church from the 16th century onwards) and by political struggles against the rulers. Transnational protection of new "globalization rights"133 and of non-discrimination, rule of law, democratic governance and social justice across frontiers are the human rights challenges of the 21st century.

In the history of federal states (such as the US, Switzerland and Germany) and of customs unions (such as the German Customs Union 1834-1866, the EEC Treaty), liberty rights were progressively extended across frontiers inside the federation and inside the customs union by means of objective guarantees of freedom of trade. The elaboration of federal human rights catalogues (e.g. in US, Swiss, German and EC constitutional law) and the inclusion of guarantees of human rights and democracy into international integration law (e.g. in the EU) have been politically possible only at later stages of market integration.134 The judicial interpretation of liberty rights, and of the constitutional guarantee that no person shall be deprived of "liberty without due process of law" (Fifth and Fourteenth Amendments of the US Constitution), have changed over time both in Europe and North America.135 In modern welfare states like Germany, for example, liberty rights are no longer interpreted only as "negative freedoms" but also as "positive rights" and "institutional guarantees" which require legislation (such as competition and social rules for a "social market economy") enabling citizens to actively use their protected freedom and preventing abuses of power.136 Even though "globalization of freedom" has become a new fact in many markets and communication systems, legal and human rights doctrines adjust only slowly their state-centered focus to the challenges of global integration law.137

a) Do Human Liberty Rights Protect Individual Freedom Across Frontiers? On Freedom of Trade and "Legal Protectionism"

National and international human rights instruments - from the US Declaration of Independence of 1776 up to the Universal Declaration of Human Rights of 1948 and the Charter of Fundamental Rights of the EU adopted in December 2000138 - recognize not only specific liberty rights (cf. Article 16 EU Charter: "freedom to conduct a business in accordance with Community law and national laws"), but also unalienable general human rights to liberty (e.g. Article 2:1 German Basic Law, Article 6 EU Charter, Article 3 UDHR). Most human rights instruments further recognize that "human dignity is inviolable" and "must be respected and protected" (Article 1 Charter of the EU). If human dignity is interpreted in accordance with the moral "categorical imperative" as requiring maximum equal liberty for personal self-development consistent with equal human rights of all others, it is only logical to construe the general human right to liberty as applying to all areas of personal development which are not protected through specific human rights. Some constitutional texts explicitly provide for such general rights to maximum equal liberty subject to other constitutional restraints and democratic legislation (e.g. Article 2:1 of the German Basic Law).139 Other constitutional systems (e.g. in the USA) achieve similar results by the constitutional requirement that governmental restrictions of freedom need a legal basis in constitutional law and democratic legislation.140 Comparative studies of constitutional democracies confirm that in "most of the English-speaking world and most of Western Europe ... there is general acceptance of a principle of maximum individual freedom consistent with equal freedoms for others" subject to democratic legislation.141

The Preamble to the US Constitution describes its objectives as, inter alia, to "promote the general welfare and secure the blessings of liberty to ourselves and our posterity." In view of the logical impossibility of enumerating all areas of individual liberty protected by the Constitution, and in order to reduce the danger of interpreting human rights catalogues as excluding liberty rights not explicitly listed, the founding fathers of the US Constitution made it explicit in the Ninth Amendment of the Constitution that "the enumeration of certain rights in the Constitution shall not be construed to deny or disparage others retained by the people". In the constitutional deliberations, other law-makers considered the Ninth Amendment as unnecessary because the constitutional principle of limited government prohibited governmental restraints of freedom that were not necessary for the protection of human rights. 142 How justified the concerns of the US founding fathers had been, is illustrated by the denial by US courts of any "vested right to trade with foreign nations".143 In European law, it has likewise been claimed144 that the lack of any explicit legal guarantee of freedom of trade with third countries should be understood as excluding the existence of such a right, without even examining whether the "freedom to conduct a business in accordance with Community law" (now explicitly recognized in Article 16 of the EU Charter of Fundamental Rights) must not be construed in conformity with the customs union principle (Article 23 EC Treaty) to the effect that freedom to conduct a business protects also freedom to import from, and export to, third countries in conformity with EC law.

The "double standard" practiced by some courts (especially in democracies with traditionally effective constitutional safeguards of economic freedom, like England and the USA) in favor of a higher degree of judicial scrutiny in the review of governmental restraints of civil and political rights compared with economic rights, is based on grounds of constitutional separation of powers and judicial self-restraint vis-à-vis economic legislation.145 Domestic judges tend to refrain also from reviewing compliance with WTO law and its underlying economic insight that discriminatory trade restrictions are hardly ever an optimal policy instrument for promoting consumer welfare. 146 Individual rights to maximum equal liberty in all areas of personal development are more frequent in "post-war constitutions" (e.g. the German Basic Law of 1949), "post-revolutionary" human rights instruments (like the French Declaration of Human Rights and the Rights of the Citizen of 1791) and "international constitutions" (like the EC Treaty) designed to prevent the recurrence of historical experiences of "constitutional failures" (e.g. collaboration of cartelized industries in Germany with the Nazi dictatorship). One major advantage of such broad liberty guarantees is to promote freedom and rule of law by facilitating judicial review of illegal government restrictions.147

Do human rights end at national borders? Or do they also limit foreign policy powers and

protect human rights across frontiers? Modern national constitutions (such as Articles 23 and 24 of the German Basic Law), European Community law and also UN human rights law (e.g. Article 28 of the UDHR) confirm that "inalienable" human rights are designed to limit all government powers, regardless of whether they are exercised unilaterally by national government institutions or collectively by international organizations. The German Law on Foreign Economic Relations of 1961, for example, explicitly recognizes that the constitutional guarantees of liberty (e.g. in Articles 2,12 and 14 of the Basic Law) protect also freedom to import and export subject to legislative restrictions which "are to be limited as to character and extent to the minimum necessary to achieve the purpose stipulated in the empowering legislation" and "are to be formulated in such a way as to interfere as little as possible with the liberty of economic activities" (Article 1 of the German Law on Foreign Economic Relations).148 In a judgment of 1904, the US Supreme Court likewise recognized: "No one has a vested right to trade with foreign nations, which is so broad in character as to limit and restrict the power of Congress to determine what articles ... may be imported into this country and the terms upon which a right to import may be exercised."149

Like most other human rights, constitutional liberty rights are subject not only to legislative restrictions aimed at balancing and reconciling different human rights. They also require legislative, executive and judicial implementing measures limiting the inherent tendencies of liberties and markets to destroy themselves (e.g. through monopolies and cartels) and enabling individuals to positively exercise their freedoms. Since, for domestic policy reasons, most governments liberalize their discriminatory border restrictions preferably through reciprocal international agreements (e.g. in the WTO) rather than unilaterally: Should the constitutional liberty rights of citizens be construed as conferring individual rights to free movements of goods, services, capital and persons in conformity with such international liberalization agreements ratified by domestic parliaments? Should national judges review whether discriminatory border restrictions limit individual liberty in a manner inconsistent with precise and unconditional international treaty obligations of the country concerned, or whether discriminatory border restrictions impose "unnecessary" restrictions that cannot promote equal human rights of domestic citizens?

b) Interpretation of Freedoms of Trade in International Integration Law

How should universal and regional human rights guarantees of personal liberty (e.g. in Article 3 UDHR) be construed in the particular legal context of international organizations? Do "historical", "textual" and "legalist interpretations" justify the view that such guarantees traditionally end at national borders, and their instrumental function for promoting individual and social welfare through mutually beneficial cooperation across frontiers cannot justify "new interpretations"? Does the particular context of worldwide organizations (such as weak parliamentary and judicial control of collective international rule-making), and the function of human rights to protect maximum equal liberty of citizens, lend support to "contextual" and "functional interpretations" that human rights should be presumed to apply to foreign policy powers no less than to domestic policy powers, and should be construed in conformity with self-imposed intergovernmental obligations to protect freedom, non-discrimination and rule of law across frontiers?

The very idea of protecting personal self-development ("human dignity") and maximum equal liberties through human rights requires to protect also mutually beneficial transnational cooperation among citizens, as it has been done in the jurisprudence of the EC Court of Justice protecting free movement of goods, services, persons, capital and payments as "fundamental rights" of citizens in the EU. This legal and judicial limitation of the centuries-old tradition in nation states to discriminate against foreigners, foreign goods, foreign services and foreign investments has not only extended the fundamental rights of EC citizens across frontiers. It has also enhanced their social welfare and their potential for personal self-government and self-development. Since the "freedom to conduct a business in accordance with Community law", protected by Article 16 of the EU Charter of Fundamental Rights in accordance with the jurisprudence of the EC Court150, must be construed in conformity with the EC Treaty guarantees for free movement of goods, services, persons, capital and payments, it was also logical for the EC Court to recognize "freedom of trade as a fundamental right", as it had been done before by some Constitutional Courts in EC member countries.151

The EC Treaty's customs union principle prohibits not only discriminatory tariff and non-tariff trade barriers among EC member states (cf. Articles 28-30,90) but also vis-à-vis third countries, as specified in the customs union rules of GATT (e.g. GATT Articles II,XI,XXIV) ratified by the EC and by all EC member states.152 International agreements ratified by the EC, like the GATT and other WTO Agreements, are legally binding on the EC and all its member states (cf. Article 300:7) with a legal status inside the EC that is, according to the EC Court, higher than autonomous "secondary law".153 EC law must be construed consistently with international law binding on the EC, and "the Court of Justice shall ensure that in the interpretation and application of this Treaty the law is observed" (Article 220). The EC Court should therefore guard the rule of law not only with regard to the internal dimension of the customs union principle (Articles 28-30,90 EC Treaty) but also vis-à-vis its precise and unconditional external prohibitions of tariffs and non-tariff trade barriers since these GATT and WTO obligations (e.g. in GATT Articles II,III:2,XI:1) are recognized as an "integral part of the Community legal system" with a legal rank superior to EC regulations and other "secondary law."154 Yet , the EC Court has persistently refused to apply GATT and WTO rules and dispute settlement rulings unless EC regulations were intended to implement particular WTO obligations or made reference to specific WTO provisions.155

The EC Court's judicial self-restraint in ensuring the GATT- and WTO-consistency of EC regulations undermines the rule of law and democratic legitimacy of EC law. Since the 1970s, more than 30 GATT and WTO dispute settlement reports have found the EC institutions to violate GATT and WTO guarantees of freedom of trade ratified by the EC and by all national parliaments in EC member states for the benefit of EC citizens. EC citizens and their national parliaments have never granted, neither in EC law nor in WTO law, a mandate to EC institutions to violate precise and unconditional WTO guarantees of freedom of trade, non-discrimination and rule of law.156 By undermining the rule of EC law and of international law, the EC institutions undermine also their own legal and democratic legitimacy as well as the liberty rights of EC citizens to exercise their human rights across frontiers in conformity with EC law and international law binding on the EC.

The success of the EC's common market law was largely due to decentralized private and judicial enforcement of the pertinent EC rules through self-interested citizens and national and European courts. The EC's proposals for more decentralized enforcement of EC competition law by citizens and national courts are presented as a new paradigm for more democratic governance in the EU. 157 Since liberal trade and competition rules serve complementary functions for promoting individual and social welfare through "a system ensuring that competition in the internal market is not distorted" (Article 3,g EC Treaty), citizens and courts should also be more actively enlisted in the decentralized enforcement of the external customs union rules of the EC. Having recognized that the EC Treaty grants individual rights to freedom of competition and freedom of trade inside the EC, national and EC courts should protect these freedoms also in the external relations of the EC against manifestly illegal restraints of trade and competition by the EC institutions. Legal and judicial protection of such freedoms has nothing to do with "laissez faire liberalism" and one-sided protection of "negative liberties". Freedom of competition and freedom of trade protect also "positive liberties" of participating in a mutually beneficial division of labor. Lawyers should no longer ignore the basic insight of modern economic theory that governments should correct "market failures" through domestic interventions directly at the source of the market distortion without restricting the gains from trade. EC lawyers defending illegal and welfare-reducing trade protectionism as "realpolitik" so as not to "disarm politicians and civil servants"158 undermine the human rights of EC citizens to protection of maximum equal liberties, rule of law and social welfare in the EC.

C. Human Rights Criteria for Interpreting the WTO's Public Interest Clauses: the Human Right to Health and Access to Medicines

The universal recognition of human rights requires to construe the numerous public interest clauses in WTO law in conformity with the human rights requirement that individual freedom and non-discrimination may be restricted only to the extent necessary for protecting other equal human rights. The non-discrimination and "necessity" requirements in the "general exceptions" of WTO law (e.g. in GATT Article XX and GATS Article XIV) reflect these human rights principles. WTO law gives clear priority to the sovereign right to restrict trade if this is necessary for the protection of human rights (e.g. to life, health, food, education, a clean and sustainable environment, and social security). The recent WTO panel and Appellate Body reports on US import restrictions of shrimps (aimed at protecting endangered species of sea turtles) confirmed that import restrictions may be justifiable under WTO law for protecting human rights values not only inside the importing country but also in other countries and in the High Seas.159

By prohibiting discriminatory and protectionist abuses, the "general exceptions" in WTO law aim at reconciling freedom of trade with the "human rights functions" of safeguard measures restricting liberal trade. In such legal and judicial balancing processes, human rights must guide the interpretation not only of the WTO's "exceptions" and safeguard clauses, but also the interpretation of the basic WTO guarantees of freedom, non-discrimination, property rights and rule of law which protect the corresponding human rights guarantees of individual liberty, non-discrimination, private property and access to courts. Moreover, the right of the importing country to protect the human rights of its citizens needs to be balanced with the corresponding right of the exporting country and also with the economic insight that trade restrictions are only rarely an efficient instrument for correcting "market failures" and supplying "public goods."160

In past GATT and WTO practice, governments have hardly ever referred to human rights in their invocations of the "general exceptions" (e.g. in GATT Article XX) and other safeguard clauses in GATT and WTO law, e.g. when applying measures "necessary to protect public morals" or to "protect human, animal or plant life or health." 161 There appears to be no evidence, however, that past GATT practice under Article XX has been inconsistent with human rights. GATT dispute settlement jurisprudence, for instance, has never challenged the legality of non-discriminatory, "necessary" safeguard measures under GATT Article XX. Also WTO practice seems to be consistent so far with interpreting the "general exceptions" in WTO law (e.g. Article XIV GATS, Article 8 TRIPS Agreement) in conformity with human rights (such as the rights to health, food, adequate housing and education, or the right to protection of moral and material interests resulting from scientific, literary or artistic production of which one is the author).162 The numerous "human rights clauses" in international economic agreements concluded by the EC with third countries have likewise been used only rarely for trade restrictions as a remedy for human rights violations.163

General Comment No.14 (2000) on the human right to the highest attainable standard of health (Article 12 ICESCR), adopted by the UN Committee on Economic, Social and Cultural Rights in May 2000164, defines the right to health as an inclusive right extending not only to timely and appropriate health care but also to the underlying determinants of health, such as availability, accessibility and affordability of health facilities, goods and services. The legal obligations of states to respect, protect , promote and fulfil this human right requires legislative implementation, judicial protection and health policy measures which, "depending on the availability of resources, ... should facilitate access to essential health facitlites, goods and services in other countries, wherever possible and provide the necessary aid when required".165 The General Comment recognizes that trade restrictions e.g. on individual access to essential food, drugs and health services can be inconsistent with the human right to health, and that cooperation might be required also in the WTO for the implementation of the right to health.166

The universalization and expanding subject matters of both human rights and intellectual property law have prompted negotiations in various UN bodies and also in the WTO on the clarification of the complex interrelationships between the TRIPS Agreement and human rights. While the need for intellectual property as incentive for research and development (e.g. of new pharmaceuticals) is no longer contested, the proper balancing between the social objectives of the TRIPS Agreement (see Articles 7 and 8), its "regulatory exceptions" (e.g. in Article 6 for "parallel imports", Article 31 for "compulsory licencing", Article 40 concerning abuses of intellectual property rights), and the appropriate scope of intellectual property protection (e.g. for genetic and other living materials, rights of indigenous peoples) raises numerous controversial questions.167 Yet, there seems to be broad agreement that the TRIPS provisions are flexible enough to permit necessary health protection measures so as to ensure access to affordable medicines to treat AIDS and other pandemics.168

D. Democratic Balancing of Human Rights: Are WTO Rules Adequate?

In their continuing evolution, human rights and global integration law require constant mutual balancing and concretization aimed at maximizing human rights.169 This human rights objective can be realized only if - similar to the bargaining inside national parliaments on the balance of private and public interests in national economic and human rights legislation - international rule-making is constitutionally restrained so as to avoid human rights being "traded away".170 Just as views on to the appropriate balancing of human rights in national legislation tend to differ depending on the interests involved, there continue to be serious doubts whether the trade-oriented TRIPS provisions appropriately balance e.g. the human rights "to benefit from the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author" with the right of everybody "to enjoy the benefits of scientific progress and its applications" (cf. Article 15:1 ICESCR). While national and international judges tend to exercise deference vis-à-vis legislative discretion, human rights require judges to protect the essential core of human rights against unnecessary interference by national and international rule-makers.

The high minimum standards of the TRIPS Agreement for the protection of intellectual property rights are beneficial for industries in developed countries where more than 90% of patented inventions are registered. It remains to be clarified whether the relatively vague TRIPS provisions on prevention of abuses of intellectual property rights (e.g. Articles 8,40), on the transfer and dissemination of technology (e.g. Article 7), and on the protection of traditional knowledge, genetic resources and "farmers rights" (e.g. in Article 27) are adequate for less-developed countries which own 90% of the world's biogenetic resources and depend on importation of technology and on more effective property rights protection of their own resources. While intellectual property protection of e.g. biotechnology may be necessary for protecting human rights (including the right to food), such protection needs to be balanced with legitimate protection of e.g. traditional knowledge owned by indigenous people, "farmers rights" and the human right to health and access to medicines at affordable prices.

The report by the UN High Commissioner on the impact of the TRIPS Agreement on human rights confirms that human rights are important "context" for the interpretation of TRIPS provisions, for instance as regards "parallel imports" of low-priced medicines, "exhaustion" of intellectual property rights, compulsory licensing and "local working" requirements for patented inventions.171 The need for balancing human rights arises also in many other areas of WTO law and practice. The right to work, for instance, may need to be protected through social adjustment assistance (as permitted under GATT Articles XVI and XIX) if the private adjustment costs impose unjust sacrifices on workers in import-competing sectors. Human and labor rights may require governments to promote labor mobility so that unemployment caused by import competition can be compensated by new employment opportunities in the export sector. The WTO rules on non-discriminatory market access may necessitate complementary competition and social rules protecting small enterprises and vulnerable groups from abuses of market power. The WTO's safeguard clauses leave broad discretion to each WTO member country for dealing with these and other trade and adjustment problems in a manner protecting human rights with due regard to the scarcity of resources. WTO bodies must exercise deference to legitimate balancing decisions by national governments and parliaments which enjoy more democratic legitimacy for the inevitable trade-offs than distant WTO bodies focusing on trade rules.

E. Need for WTO Competition and Social Rules as Necessary Complements of Human Rights

There is broad consensus today among governments and economists that market competition may lead to "market failures" (including inadequate commercial investments for medecines needed by poor people in tropical countries) which may necessitate national competition and social rules. The widespread protectionist abuses of economic and regulatory power, such as abuses of intellectual property rights for restricting and allocating markets and for blocking competing research efforts, also require international competition rules in the WTO so as to help governments to coordinate their national competition policies and to overcome domestic protectionist pressures against effective competition rules at home. The 1997 GATS Protocol on Telecommunications, for instance, already includes detailed competition rules in view of the fact that, in many countries, telecommunication services are dominated by monopolies and distorted through subsidies and restraints of competition. The liberalization of many other services sectors (like road, rail, air and maritime transports) will likewise remain impossible without complementary limitations on monopolies and restraints of competition. Many international restraints of competition are particularly harmful for less-developed countries (e.g. in case of export cartels, international shipping and air transport cartels charging discriminatory prices on routes to developing countries). As sectoral competition rules risk being abused by special interest groups, the proposals for limiting cartel agreements, other anti-competitive business practices and abuses of intellectual property rights through worldwide WTO minimum standards for undistorted competition and transnational cooperation among competition authorities are of constitutional significance for protection of freedom, non-discrimination and mutually beneficial division of labor across frontiers.172

F. Need for More Democratic Rule-Making in Worldwide Organizations

Secretive and producer-driven intergovernmental rule-making procedures in specialized international organizations, including the WTO and standard-setting practices in UN Specialized Agencies (like FAO and ITU), may be inconsistent with the human rights to democratic participation in the exercise of government powers and to transparent decision-making maximizing equal human rights.173 In order to promote more effective democratic and parliamentary control of trade policy-making, transparency and more responsible deliberative democracy in the trade policy area, the International Law Association has recommended the establishment of an advisory WTO parliamentary committee and of an advisory WTO civil society committee. Citizens and NGOs could thus be represented in a more balanced manner so as to make the one-sided influence of "producer interests" on trade policy-making processes more accountable vis-à-vis representatives of consumer interests and other "public interests".174 Since more than 110 WTO member countries ratified the ICESCR, and almost all of them ratified the UN Covenant on Civil and Political Rights and the UN Convention on the Rights of the Child, the time has also come for express references - in WTO Ministerial Declarations and in WTO jurisprudence - to the promotion and protection of human rights so as to enhance a more coherent constitutional discourse and more general awareness of the complementary functions of human rights and of global integration law. Such WTO references to human rights could also help other WTO bodies (such as the WTO's Trade Policy Review Mechanism) to contribute so the needed integration and "constitutionalization"of the so far fragmented human rights treaties and sectoral integration agreements.

129 See above section 4 A, notably note 51.

130 See e.g. J.Rawls (note 1), at 53, whose "first principle of justice" is: "each person is to have an equal right to the most extensive scheme of equal basic liberties compatible with a similar scheme of liberties for others." On the interdependence between human rights, democracy, rule of law and peace see e.g.: J.Symonides (ed.), Human Rights: New Dimensions and Challenges, UNESCO 1998.

131 See above section 5 and Petersmann, How to Constitutionalize International Law (note. 56).

132 See the reasons explained in: E.U.Petersmann, Why Do Governments Need the Uruguay Round Agreements, NAFTA and the EEA? In: Swiss Review of International Economic Relations (Aussenwirtschaft) 49 (1994), 31-55.

133 See M.D.Pendleton, A New Human Right - The Right to Globalization, in: Fordham International Law Journal 22 (1999), 2052.

134 For a comparative legal analysis with numerous references to the relevant legal texts see: Petersmann (note 44), chapter VIII.

135 See e.g. J.H.Garvey/T.A.Aleinikoff, Modern Constitutional Theory: A Reader, 3rd ed. 1994, at 618 et seq.

136 Cf. e.g. E.Grabitz, Freiheit und Verfassungsrecht, 1976.

137 Cf. H.H.Koh, The Globalization of Freedom, in: The Yale Journal of International Law 26 (2001), 305-312

138 See above note 75.

139 See above note 97.

140 Cf. F.L.Morrison/R.E.Hudec, Judicial Protection of Individual Rights under the Foreign Trade Laws of the United States, in: Hilf/Petersmann (above note 52), 91-133, at 92 et seq.

141 C.B.Macpherson, The Life and Times of Liberal Democracy, 1977, at 7.

142 See e.g. S.Sherry, The Founders' Unwritten Constitution, in: University of Chicago Law Review 1987, 1127 et seq.

143 For a discussion of this jurisprudence see: Petersmann, National Constitutions and International Economic Law (note 52), at 14-15.

144 E.g. by S. Peers, Fundamental Right or Political Whim? WTO Law and the European Court of Justice, in: Burca/J.Scott (eds.), The EU and the WTO, 2001, 111, at 129 ("no right to trade deserves to be recognized").

145 Cf. e.g. H.J.Abraham, Freedom and the Court, 5th ed. 1988, at 11-37.

146 See note 144 above and the explanation by Corden (above note 6) why the modern economic theory of optimal interventions, and its justification of freedom of trade, have nothing to do with laissez faire liberalism.

147 This is so in countries like Germany where "basic rights shall bind the legislature, the executive and the judiciary as directly enforceable law" (Article 1:3 Basic Law), and "in no case may the essential content of a basic right be encroached upon" (Article 19:2 Basic Law). For, Article 19:4 of the Basic Law guarantees recourse to a court against violations by public authority of any person's right, and the possibility of direct constitutional complaints to the Federal Constitutional Court (cf. Article 93 of the Basic Law) is frequently used by individuals requesting the Court to review whether their individual liberty protected by Article 2:1 has been unnecessarily restricted by legislative or administrative measures.

148 For a detailed discussion of the constitutional and legislative protection of "freedom of trade" in Germany see: Petersmann, National Constitutions and International Economic Law (note 52), at 22-23.

149 Buttfield v. Stranahan (1904), 192 U.S. 470, 493. For a criticism of more recent lower court decisions in the US see Petersmann (note 52), at 14-17.

150 For references to the ECJ jurisprudence see: Eeckhout (note 80).

151 See above note 20 and Petersmann, note 143, at 17-25.

152 On the WTO membership of the EC and EC member states see: P.L.H. Van den Bossche, The European Community and the Uruguay Round Agreements, in: J.Jackson/A.Sykes (eds.), Implementing the Uruguay Round, 1997, at 23 et seq. On GATT's customs union principle as a constitutional principle explicitly incorporated into the EC Treaty see: E.U.Petersmann, Constitutional Principles Governing the EEC's Commercial Policy, in: M.Maresceau (ed.), TheEuropean Community's Commercial Policy after 1992: The Legal Dimension, 1993, 21-62.

153 See e.g. Case C-61/94, Commission v. Germany, ECR 1996 I-3989, and note 84 for further references to the jurisprudence by the EC Court.

154 See note 153.

155 For recent surveys and criticism of the contradictory ECJ jurisprudence concerning the EC's GATT and WTO obligations see Peers (note 144) and G.A.Zonnekeyn, The Latest on Indirect Effect of WTO Law in the EC Legal Order, in: JIEL 4 (2001), 597-608.

156 The invocation by the EC Court (in case C-149/96, Portugal v. Council, ECR 1999 I-8395) of Article 22 of the WTO's DSU (i.e. the possibility of offering compensation by the EC so as to prevent countermeasures by third countries) can not legally justify the refusal by the EC Court to protect the rule of law inside the EC against manifest violations of EC law and WTO law that were not democratically authorized by national parliaments.

157 Cf. C.D.Ehlermann/I.Atanasiu (eds.), European Competition Law Annual 2000: The Modernisation of EC Atitrust Policy, 2001, at xviii.

158 Peers (note 144), at 123.

159 See the Appellate Body report of 22 October 2001 on US Import Prohibition of Certain Shrimp and Shrimp Products, DS58/AB/RW, with references to the earlier WTO panel and Appellate Body reports.

160 In its Resolution 1999/30 of 26 August 1999 on "Trade Liberalization and its Impact on Human Rights", the Sub-Commission (of the UN Commission on Human Rights) on the Promotion and Protection of Human Rights declared "that sanctions and negative conditionalities which directly or indirectly affect trade are not appropriate ways of promoting the integration of human rights in international economic policy and practice." See also Resolution 1998/12 on "Human rights as the primary objective of trade, investment and financial policy" adopted by the UN Sub-Commission on the Promotion and Protection of Human Rights, and Resolution 1999/30 on "Trade liberalization and its impact on human rights" adopted by the same UN Sub-Commission in 1999.

161 For a rare exception, see the submission from Mauritius in WTO document G/AG/NG/W/36/Rev.1 of 9 November 2000, which claims that Article 20 of the Agreement on Agriculture (regarding the taking into account of "non-trade concerns") should be read in conjunction with Article 11 of the ICESCR recognizing the right of everyone to adequate food.

162 In the negotiations for the WTO Ministerial Declaration of November 2001 on access to medicines and review of Article 27:3(b) of the TRIPS Agreement, the "Africa Group", for instance, referred explicitly to human rights as criteria for interpreting the TRIPS Agreement. The WTO Secretariat also actively contributed to the discussions leading to the report of the UN High Commissioner for Human Rights on the impact of the TRIPS Agreement on human rights (E/CN.4/Sub.2/2001/13) and to Resolution 2001/21 by the UN Sub-Commission on Human Rights on "Intellectual Property and Human Rights" (E/CN.4/Sub.2/RES/2001/21 of 16 August 2001).

163 The EC's suspension of trade preferences for Yugoslavia in November 1991, for instance, was motivated by the military hostilities in the former Yugoslavia rather than by human rights violations. In the context of the Lomé-Convention, the EC reacted to human rights violations (e.g. in Rwanda) by suspension of financial and technical assistance rather than trade restrictions. The EC's Generalized System of Tariff Preferences (GSP) offers additional preferences to developing countries which respect basic ILO guarantees (such as freedom of association and minimum age for admission to employment); temporary withdrawal of GSP benefits by the EC in response to violations of human rights have been rare (e.g. in the case of Myanmar).There is thus hardly any empirical basis for the criticism (e.g. by P.Prove, Human Rights at the WTO? in: Mehra, note 18, at 32) of an alleged "bias of the WTO" because "the primary entry point for human rights concerns would be as justifications for sanctions and trade conditionalities".

164 See UN document E/C.12/2000/4, CESCR of 4 July 2000 and, on the preparatory work: B.C.A.Toebes, The Right to Health as a Human Right in International Law, 1999.

165 General Comment No.14 (note 157), paragraph 39.

166 See e.g. paragraphs 41, 43 and 64 of the General Comment No.14 (note 163).

167 See e.g. G.Dutfield, Intellectual Property rights, Trade and Biodiversity, 2000.

168 See e.g. the report of the joint WHO/WTO Workshop on Differential Pricing and Financing of Essential Drugs of 8-11 April 2001 (which notes that about 95% of the WHO list of "essential drugs" are not or no longer patented, and differential pricing and international financing of essential drugs are consistent with the TRIPS Agreement).

169 See E.Kwakwa, Intellectual Property and Human Rights, in: Abbott/Cottier (note 24).

170 For instance, the inalienable "moral rights" of authors recognized in Article 6bis of the Berne Convention for the Protection of Literary and Artistic Works (1896) were not mentioned in the TRIPS Agreement. See also F.J.Garcia, The Global Market and Human Rights: Trading Away the Human Rights Principle, in: Brooklyn Journal of International Law 1999, 51.

171 See the report mentioned above (note 162). Cf. also e.g. Resolution No.2/2000 on `International Trade Law' (notably Annex I on "Exhaustion of Intellectual Property Rights and Parallel Trade") adopted by the worldwide International Law Association on 29 July 2000 (cf. ILA, Report of the 69th Conference, London 2000, 18-25), and the withdrawal, in April 2001, of the law suit in the South African Supreme Court by 39 pharmaceutical firms against the South African government in order to enforce drug patents that would have slowed the fight against AIDS. A WTO dispute settlement panel was set up in January 2001 (cf. WT/DS199) to examine a US complaint against Brazil's industrial property law which imposes a "local working" requirement according to which a patent shall be subject to compulsory licensing if the subject matter of the patent is not worked in Brazil. Brazil justified its threat of compulsory licensing for local production of generic drugs at lower costs by health policy objectives and as a means to put pressure on US and European pharmaceutical companies to lower their prices for HIV/AIDS drugs. The US later withdrew its complaint and acknowledged the right of Brazil to take measures necessary for ensuring supply of AIDS medicaments at affordable prices to patients in Brazil.

172 Cf. E.U.Petersmann (note 32).

173 Cf. E.U.Petersmann, From "Negative" to "Positive" Integration (note 54).

174 Cf. the Resolution by the International Law Association mentioned in note 171.




This site is part of the Academy of European Law online, a joint partnership of the Jean Monnet Center at NYU School of Law and the Academy of European Law at the European University Institute.
Questions or comments about this site?