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World Trade Organisation and Human Rights

The World Trade Organization is an organisation for the liberalisation of international trade, where trade agreements are negotiated and trade disputes are solved. This international organisation, once a club called the General Agreement on Tariffs and Trade (GATT), was created by the post World War II planners in 1947-1948. Now it is called the World Trade Organization. Trade has grown dramatically under the aegis of the GATT/WTO, and thus the organisation has played an important role in global economic growth and development. Yet many people do not see the WTO as acting in their interest. Perhaps the most stinging criticism of the WTO relates to human rights.

In recent years, the linkage of human rights standards and trade measures has become a much discussed topic in international relations. Examples of human rights issues interfering with WTO principles and obligations are numerous. For instance, the right to health was encroached upon by the Thai Cigarettes case, the Hormone Beef case and the Asbestos case, as well as by the TRIPS agreement which impedes poor people from access to affordable medicine, namely generic drugs, which are produced, imported or sold without respecting existing intellectual property rights as protected under the TRIPS agreement.

Furthermore, human rights policies of WTO members are also impaired by WTO principles and obligations. Some observers have argued that the WTO system of rules undermines human rights delineated under the Universal Declaration of Human Rights.[1] Trade policies and agreements can undermine some rights and enhance others. In fact, the WTO is agnostic on human rights; but its rules constrain the ability of national policymakers to use trade-distorting policies to advance human rights or to achieve other policy goals.

The most controversial question is, whether trade-related measures are a feasible instrument to improve the human rights situation in the target country. From an ethical point of view, trade measures, e.g. the prohibition of the import of goods produced with child labour, seem to be justified. Whereas from an economic standpoint, the effect of such trade sanctions often harms the people in the target country more than it actually helps improve the human rights situation. In the WTO, the issue reflects a conflict of interests between industrialized and developing countries.[2]

While industrialized countries claim a need for a social clause in order to protect human rights and social standards, and avoid social dumping, developing countries fear that such demands are merely an excuse for industrialized countries to take measures to protect their national job market. From a legal point of view, discussion on the possibility of adopting trade-related human rights measures under the current WTO legal framework, or on necessary and feasible amendments, is again overshadowed by the underlying conflict of interests between industrialized and developing countries.

If policymakers from member states want to use trade policies to protect particular human rights at home or advance human rights abroad, they must do so without violating GATT/WTO norms of the most favoured nation (MFN), national treatment and like product. MFN rules require member states not to discriminate among other member states – thus, benefits granted to one member must automatically be granted to another. National treatment rules require member states to treat the products of foreign firms as those of local firms.[3] And policymakers cannot discriminate between products originating in different countries nor between imported goods and like domestically produced goods. These norms make it harder to limit imports from nations where citizens may be subject to human rights abuses as they produce goods and services.

Where Human Rights May Enter The WTO System?

As civil society, we are taking the initial steps to identify the full impact of the WTO, learn the workings of global trade, and identify opportunities to intervene. The next critical move is to strategize as to what we can do to analyse from where the violation of human rights seeps into the system.
  • Accessions: Nations have not introduced human rights concerns per se in accessions, but some members have become increasingly concerned about human rights and in particular, the rule of law in acceding countries. In Chinas accession, it was asked to enforce all of its laws in all of its territories including export-processing zones.
     
  • Non-application: When nations accede, WTO members may choose not to extend trading rights and privileges.
     
  • General exceptions: Article XX includes language allowing nations to restrict trade when necessary to protect life, protect public morals, secure compliance, or conserve natural resources. Article XXI allows member states to restrict trade for reasons of national security.
     
  • Waivers: The Kimberley waiver for conflict diamonds was the first waiver approved for a human rights purpose.[4] It was stimulated by UN Security Council Resolution and broad member interest and support.
     
  • Dispute settlement: There have been no disputes that centred directly on human rights questions. The first dispute on public morals was in 2005.[5] Food safety disputes to some degree centre on the right to health but are not explicitly defended as human rights concerns.
     
  • Trade policy reviews: The WTO Secretariat and member states jointly review trade policies and practices of member states. Larger trading nations are reviewed more frequently. Officials increasingly bring up human rights concerns in these discussions.
     
  • Amendments to existing agreements or clarification: WTO members recognise there are times when they need to provide greater guidance to member states. In amendments, members agree to alter existing agreements to stipulate what member states can or cannot do, as in intellectual property rights and the right to health. In addition, members have agreed to further discussions to clarify the relationship between IPR and traditional knowledge.
     
  • Negotiations: Some members sought to include labour rights in negotiations, but failed. There are no direct human rights negotiations in Doha Round, but many issues such as agriculture and services could affect the ability of governments to advance human rights positively or negatively. As these negotiations are in progress, they are not discussed herein.

Human rights issues have also been dribbling into WTO Trade Policy Reviews. During Chinas 2006 review, members expressed concern about Chinas commitment to access to information and public participation. Some nations, such as Ecuador, used their review to discuss childrens and womens rights and to show the efficacy of their court system. In its 2005 review, Egypts representative stressed that Egypt had put in place new laws to foster political participation and to strengthen civil society. During the US and EC reviews, other member states challenged the two trade giants for their focus on linking trade and labour rights.[6]

The dispute settlement body has also dealt with some human rights issues. In 2005, the EC challenged Brazils ban on imports of rethreaded tires. Brazil argued that it had banned these imports, because there is no safe way to dispose of these tires and it had a constitutional duty to protect its citizens right to health. Brazil was one of the first countries to argue that a trade ban is necessary to protect the life and health of its people. It also argued that it had no reasonable alternative to the trade ban to protect the right of health. The Dispute Settlement Panel and later the Appellate Body held that, although the ban was necessary to protect health and the environment, it was applied in a WTO-inconsistent manner. The panel went on to say that Brazils ban on imports could be justified as an exception to WTO rules based on public health concerns if the Brazilian government applied the ban without distorting trade. For an overview of this history, see Susan Aaronson and Jamie Zimmerman (2007).[7]

Finally, human rights issues have also seeped into negotiations. During the Uruguay Round of the GATT (1986-1993), members agreed to discuss non-trade concerns such as food security – the ability of member states to ensure that their people had access to affordable safe food. But they couldnt agree which countries should be allowed to subsidise the production of food to ensure food security. The WTO does not prevent members from protecting human rights, but its rules do constrain them. They require that member states do not distort trade when they try to advance human rights at home or abroad. Moreover, as members have become more aware of the potential for conflict at the intersection of trade and human rights, they have worked at the WTO to find solutions such as waivers or even amending the WTO that are both trade-expanding and provide incentives to policymakers to respect human rights.

Specific Agreements Most Affecting Human Rights

The interactions between trade and human rights are complex: bidirectional, direct and indirect, and positive and negative. One of the most controversial issues is the use of trade measures to enforce human rights or social standards. The following agreements under the specific regime, affects the human rights from its initiation.
  1. Intellectual property rules (TRIPS & TRIPS-plus) affect the right to health

    Experience has shown that the WTO agreement on Trade-Related Intellectual Property Rights poses formidable obstacles to the fulfilment of the right to health, particularly in terms of access to medicines. This was particularly true before the Doha Declaration, when the TRIPS system of 20-year minimum patents had a disastrous effect on developing countries like India and its ability to deal with HIV/AIDS, malaria, and tuberculosis, among other diseases.[8]
     
  2. Agricultural rules affect the right to food & food workers rights

    It is unsurprising that trade in agriculture would have profound meaning for human rights. After all, in many of the Southern countries that make up over two-thirds of the WTO, agriculture is still the dominant source of livelihood, as well as a basis of culture, community, and subsistence. Agriculture involves the human rights of millions of workers, and food is obviously fundamental to the right to life. The commitment recognizes the need of developing countries to effectively take account of their development needs, including food security and rural development.[9]
     
  3. Agreements on services (GATS & GATS-plus) affect basic, essential services

    The original logic of the pre-WTO GATT contemplated only trade in goods, not in services. With the passage of the GATS agreement during the Uruguay Round, however, trade in services and their related instrumentalities were brought under the WTO logic of progressive liberalisation[10]. Practically, the GATS have enormous influence, potentially embracing everything from overseas workers, tourism, and financial services, to water and education. At present, although the special needs of developing countries are recognized in Doha Declaration, the formally available flexibilities in GATS are often compromised in practice.
     
  4. Rules governing negotiations in industrial goods (viz. NAMA) will affect the global competitiveness of developing country exports and have an impact on workers rights.
    At the start of this year, Non-Agricultural Market Access (NAMA) rules took full effect, bringing industrial goods ranging from fisheries to textiles and clothing under the WTOs liberalized regime.[11] Formerly, industrial goods, as opposed to agricultural and manufactured goods, existed at the fringes of GATT and were therefore progressively phased into the WTO system. Fully integrating industrial products will have an enormous effect on developing and least developed countries.
     
  5. Debating the social clause

    Given that States members of the WTO often neglect their human rights commitments when negotiating trade agreements, would it be better for human rights concerns to be explicitly, systemically built-in to the WTO?[12] In the lead up to the Singapore Ministerial of 1996, some unions and labour NGOs pursued the so-called social clause, which would force WTO members to consider labour rights (freedom to unionize and engage in collective bargaining, minimum working age, prohibition of forced labour, non-discriminatory hiring, and equal remuneration) in their trade negotiations.

Ways To Improve The Trade And Human Rights Relationship

While the WTO has so far not been very receptive to the discussions on the trade and human rights relationship, UN human rights bodies, under the auspices of the Economic and Social Council, have been very active in researching the topic. Numerous studies focus on the relationship between trade liberalization and human rights and analyze the impact of trade liberalization on the human right situation.
  1. Human rights impact assessment at the negotiating and the implementing stage

    One way to avoid negative impacts of trade regulation on the human rights situation in the Member States is through a human rights impact assessment of WTO decisions and rules.[13] This should already be done at the negotiating stage, as well as the implementing stage. Human rights impact assessment considers the likely impacts of trade rules on the enjoyment of human rights. The criteria have to be established for all human rights separately. For the right to health, criteria such as the availability, accessibility and quality of health goods, services and facilities, could be considered when new regulations are negotiated.
     
  2. Interpreting trade rules in conformity with human rights obligations

    In order to avoid a conflicting situation in exceptional circumstances, it is possible to interpret WTO rules in conformity with Member States human rights obligations.[14] This interpretation would enable the Dispute Settlement institutions to allow trade measures, which avoid, or minimize human rights violations. An example where such a non-economic concern was accepted without much discussion was the EC - Asbestos case, where the import prohibition of asbestos-containing substances for public health reasons was accepted by the Panel without thoroughly examining whether the restriction would be justified under Art. XX. Seen from a human rights angle, this decision favours a Member States implementation of the right to health, i.e. to protect its inhabitants from dangers to their health.
     
  3. Trade incentives

    Another way to promote human rights is through trade incentives. This method has been pursued for years by the EU and the US. The EU has a long tradition of adding human rights clauses to cooperation agreements with third countries.120 Trade preferences are offered to countries for the promotion of human rights generally, or for programs directed at a specific aspect of human rights.
     
  4. Technical assistance for the implementation of trade rules and policies

    An additional approach to improving the human rights situation in Member States is to incorporate human rights aspects in the technical assistance programs. Such programs are an important feature of the WTO work, namely for developing countries, which get support in implementing the trade rules required to comply with the WTO regime, and creating the necessary national institutions to administer those rules. These technical assistance programs could integrate human rights considerations into the process of drafting trade policies and regulation.
     
  5. Cooperation with other International Organizations

    The proposed activities of the WTO to mainstream human rights in its work will need the strong support of human rights organizations. Standard setting and monitoring of implementation is the main task of UN human rights bodies and the International Labor Organization. Nevertheless, the elaboration of standards to implement the right to health or the right to food, for instance, will be difficult, as these human rights issues are heavily disputed among Member States of the relevant organizations, as well as parties to the relevant agreements.

Although some human rights could be enforced under the current legal system, if in compliance with the requirements contained in the general exception clauses, it would be impossible to protect all human rights under the current legal framework of the WTO. [15] From a human rights perspective, it is disputable whether the partial protection of only some rights is desirable, as generally all human rights are indivisible and equal, therefore, the enforcement of only some rights would contradict this concept.

An amendment of the WTO Agreements would be necessary to reach full coverage of basic human rights through trade-related measures. Although an amendment is factually more than unlikely, the question is whether a broader legal framework is desirable.[16] This is doubtful, since other problems arise if WTO members were allowed to enforce human rights through trade measures. For instance, the applicable human rights standard is difficult to determine, and the exact scope of states human rights obligations is unclear; moreover, it cannot be the task of the WTO to multiply the efforts of the existing human rights organization to determine the meaning of human rights obligations. This would not only be a waste of resources, but also lead to a double standard, unless it works in cooperation with the UN human rights organizations.

In addition, it is problematic from a political point of view to allow a state to unilaterally determine, which states violate human rights and for which states it enforces human rights through trade sanctions.[17] To use the WTO legal system for such a politicized action would not only endanger its credibility, but also the international human rights concept.

Conclusion And Way Forward
Trade and human rights linkages are manifold, and there are numerous policy proposals to avoid the negative impacts of trade liberalization on the human rights situation in the WTO Member States. Even so, not all approaches to address the existing conflicts of interest and improve the trade and human rights relationship are feasible. One of the main points of criticism of anti-globalists is that WTO rules prohibit the enforcement of human rights or social standards through trade sanctions. Apart from the legal constraints of the WTO agreements, it is however doubtful whether trade related human rights measures are a viable instrument to promote human rights in the target country.

A more effective way to address negative impacts of trading rules on the human rights situation is to incorporate human rights considerations into the work of the WTO. The UN human rights bodies have identified a number of measures that can improve the human rights records of the WTO and promote higher standard of living and sustainable development in its Member States. One possibility to incorporate human rights considerations in the work of the WTO is through a human rights impact assessment of trade rules at the negotiation stage, or during the examination of TPRM reports. Technical assistance can also play an important role.

There are however limits to the WTO facilities that can only be overcome through cooperation with other International Organizations. The WTO needs know-how from the relevant UN institutions, like the UN human rights bodies or the ILO, not only in determining the applicable human rights standard, but also for monitoring human rights obligations and mainstreaming human rights into its work. In addition, it is important that those institutions specialized in labour, human rights or social issues supplement the WTO efforts to address human rights concerns through technical assistance and training programs for the improvement of the human rights situation in the countries concerned.

Under the current WTO legal framework there is only a very limited possibility to apply trade-related measures to enforce human rights standards. Due to the concept of like products, discriminatory treatment due to the human rights conditions in the exporting country or the production and process methods is not possible. The extraterritorial application of national standards does not only constitute a problem under the current WTO legal system, but also in general international law, as it interferes with the sovereignty of other states.

Although the WTO cannot mutate into a human rights organization, in order to maintain credibility, it must take steps to acknowledge the human rights effects of its work. It is the responsibility of the Member States of the WTO to ensure that human rights considerations are incorporated in the work of the WTO Councils and Working Groups. Disregarding all political disputes, namely between industrialized and developing countries, the reluctance towards human rights is difficult to grasp.

The creation of an acceptable human rights framework is often perceived as a cumbersome and expensive duty, yet it actually improves the economic situation and attractiveness of a state. If the population is provided with basic labour standards, education or health care facilities, the political climate in a country will stabilize and the productivity of the work force will improve. If a state respects the rule of law, and provides for fair and non-discriminatory administrative and court procedures without corruption, this will lead to a more attractive business environment. Hence, the respect and promotion of human rights and economic development are not contradictory, but mutually reinforcing.

End-Notes
[1] Human Rights and Trade, 5th WTO ministerial conference, Cancun, Mexico, 9/10–14/2003, available at http://www.tradeobservatory.org.
[2] Gudrun Monika Zagel, WTO & Human Rights: Examining Linkages and Suggesting Convergence, IDLO VOICES OF DEVELOPMENT JURISTS PAPER SERIES Vol. 2. No. 2, 2005.
[3] General Agreement on Tariffs and Trade (GATT 1947), Geneva, 30 October 1947, 55 UNTS 194, available at http://www.wto.org/english/docs_e/legal_e/legal_e.htm.
[4] Schefer, Krista, Stopping Trade in Conflict Diamonds: Exploring the Trade and Human Rights Interface with the WTO Waiver for the Kimberley Process 2005/11/17.
[5] Aaronson, Susan Ariel, Seeping in Slowly, How Human Rights Concerns Are Penetrating the WTO, World Trade Review, 2001 (6)3, 413-449.
[6] Individual Case (CAS) - Discussion: 2017, Publication: 106th ILC session (2017), Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87) - Egypt (Ratification: 1957).
[7] Brazil- Measures Affecting Imports of Retreaded Tyres Status Report by Brazil, Addendum WT/DS332/19/Add.6 | 15 September 2009.
[8] TRIPS and Public Health: The next battle (2002), at 5, available at www.oxfam.org.uk/what_we_do/issues/health/bp15_trips.htm.
[9]WTO, Doha Ministerial Declaration, Nov. 14, 2001, WT/MIN(01)/DEC/1, para. 13, available at www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_e.htm
[10] General Agreement on Trade in Services, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, 33 I.L.M. 44 (1994), available at www.wto.org/english/docs_e/legal_e/26- gats_01_e.htm.
[11] Guide to the WTO for Human Rights Advocates (2004).
[12] Cf. EC Council Regulation 2501/2001, 10 December 2001, Official Journal of the European Union 2001 L 346/1.
[13] Cf. European Communities - Measures Affecting the Prohibition of Asbestos and Asbestos Products (WT/DS135), Panel Report, circulated on 18 September 2000.
[14] Cf. for an example UN, Economic, Social and Cultural Rights: Mainstreaming the Right to Development into International Trade Law and Policy at the World Trade Organization , 9 June 2004, E/CN.4/Sub.2/2004/17.
[15] Understanding Global Trade & Human Rights;, Report & Resource Guide for National Human Rights NGOs in View of the 2005 WTO Ministerial Conference, Hong Kong (MC6), International Federation for Human Rights, July 2006.
[16] Cf. C. M. Vászquez, Trade Sanctions and Human Rights - Past, Present, and Future, 6 Journal of International Economic Law (2003) 797 – 839.
[17] Cf. J. H. Jackson, The World Trading System: Law and Policy of International Economic Relations, Cambridge (1997), pp. 139; A. F. Lowenfeld, International Economic Law, Oxford; New York (2002).

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