The WTO is an undemocratic institution that limits the sovereignty of nation states. Discuss.

Part 1

OverviewThis essay topic explores two accusations that are often leveled at the WTO that it is (1) Undemocratic and that it (2) limits the sovereignty of nation states. This essay will explore both these claims separately. Part one will begin by defining the scope of the essay, it will then go on to give a summary of the issues that will be discussed in part two and three of the essay regarding the claims that the WTO undermines sovereignty and that the WTO is an undemocratic institution.

Scope of the Essay For most of the world democracy is an ideal to aspire to. It is commonly thought to lend legitimacy to decisions of governments.[footnoteRef:1] It is argued that sovereignty is what will allow states to protect the ideals of democracy such as collective decision-making and self-government from the encroachments of international organizations such as the WTO.[footnoteRef:2] Although it has been stated above that the essay will explore both these claims, given the importance of sovereignty and its vital role in protecting democracy this essay will for the most part focus its attention on the impact the WTO has had on sovereignty. [1: ] [2: Rethinking the 876-875 ]

Does the WTO undermine democracy? This essay will first examine what is meant by the claim that the WTO is undermining democracy. It will then asses whether or not the WTO undermines democracy by exploring arguments that state the WTO does undermine democracy and arguments that state the WTO strengthens democracy. (note to self WTO may do neither but this is unlikely). Both arguments will then be critically analyzed by reference to the criticisms received by the respective arguments. The essay will then come to a conclusion based on the arguments discussed. (note to self change this part later to include the conclusion

Does the WTO limit SovereigntyPart two of the essay will begin by discussing what is meant by sovereignty, the impact that the WTO has on sovereignty be it sovereignty affirming or limiting. It will then critically examine the arguments regarding the effect WTO has had on sovereignty, and come to a conclusion based on these arguments as to whether the WTO has an impact on the sovereignty of states and if so how significant the impact is.

Part Two WTO and Sovereignty

What is Sovereignty?Before discussing whether the WTO limits sovereignty and the degree to which it does so it is important to determine what exactly is meant by sovereignty. According to some sovereignty is a social construct. They argue that the modern state system is not based on a timeless principle of sovereignty.[footnoteRef:3] By freezing the concept of what it means to be sovereign we ignore that there are no particular inherent characteristics in the concept of sovereignty and that it varies very according to the custom and practices of nation states and international systems.[footnoteRef:4]Indeed there are many today calling for a more modern conception of what it means to be sovereign.[footnoteRef:5] [footnoteRef:6]They argue that it is necessary to rethink sovereignty to escape the pitfalls and misuse of older sovereignty ideas and also to escape the current challenges facing international law thinking such as the nation-state consent requirement for norm innovation.[footnoteRef:7] [3: State Sovereignty as Social Construct edited by Thomas J. Biersteker, Cynthia Weber pg 1-18] [4: State Sovereignty as Social Construct edited by Thomas J. Biersteker, Cynthia Weber pg 1-18 Cambridge University Press 1996] [5: ] [6: Page 61 Jackson book soverignity modern] [7: Jackson book pg 62 ]

However given that the Westphalia model of sovereignty is the one that is most commonly reviewed and referred to by scholars or international law this essay will mostly focus on this definition of sovereignty. There are four main characteristics of the Westphalia notion of sovereignty, they are that the state enjoys a legitimate monopoly over the use of force in its territory, that it can regulate movements across its borders, that it can make foreign policy choices freely and that it is recognized by other governments as an independent authority free from the threat of external intervention.[footnoteRef:8] [8: Richard N. Haass, Director, Policy Planning Staff Remarks to the School of Foreign Service and the Mortara Center for International Studies, Georgetown University Washington, DC January 14, 2003 < http://2001-2009.state.gov/s/p/rem/2003/16648.htm>]

What impact does WTO have on Sovereignty?

According to some the sovereignty of nations are rarely endangered by institutions such as the WTO. It is claimed that debates about sovereignty are really debates about power allocation,[footnoteRef:9] and that the delegation of power to an institution such as the WTO does not affect sovereignty because these delegated powers can be reclaimed by states.[footnoteRef:10] For instance Article XV of the WTO Treaty makes it relatively simple for states to withdraw unilaterally with only 6 months notice.[footnoteRef:11] It is claimed that even though it may be costly for states to withdraw where there are no express prohibitions to withdraw states retain ultimate sovereignty.[footnoteRef:12] [9: The Political Economy of International Trade Law Essays in Honour of Robert E. Hudec Eds Daniel L M Kennedy, James D Southwick, Sovereignty subsidiarity and the separation of powers: the high wire balancing act of globalization Pg 10] [10: Rethinking The Sovereignty Debate in International Economic Law, Kal Raustiala Journal of International Economic Law 6(4) Oxform University Press pg 846] [11: WTO Article XV; The Law and Policy of the World Trade Organization: Text, Cases and Materials By Peter Van den Bossche 116] [12: Rethinking The Sovereignty Debate in International Economic Law, Kal Raustiala Journal of International Economic Law 6(4) Oxform University Press pg 847 ]

It has also been stated that conceptualizing the allocation of power to organizations such as the WTO as a zero sum game is inaccurate as the establishment of international economic institutions expands the depth and scope of government power rather than merely appropriating aspects of government powers It states that these powers that were given to the WTO arose out of a regulatory vacuum similar to the powers that were given to the federal government during the new deal era.[footnoteRef:13] [13: Stephen Gardbaum New Deal Constitutionalism and the Unshackling of the States University of Chicago Law Review.* pg 487 (483-506)]

Limitations with argumentsWhile it has been argued that the impact WTO has on the sovereignty of nations is limited there are a number of flaws with these arguments. The criticisms of these arguments are listed below.

The first argument presented above states that formal sovereignty is not affected because the states entered in to the WTO treaty by their own free will and consent. However this argument is weakened by the interpretation approaches the Appellate body of the WTO has taken.[footnoteRef:14] It has raised doubts as to whether a meaningful consent could have been given by states when the WTO treaty was signed, given that the appellate body is interpreting articles in a way that deprives it of any meaningful content, and in a manner that was highly unlikely to have been contemplated by the parties when consent was given.[footnoteRef:15] [14: One Economy Peter Singer Pg 90] [15: One Economy Peter Singer Pg 66-68, 90]

For instance when the treaty was signed a natural reading of article XX would have led most nations to believe that they were agreeing to a treaty that would allow them to prohibit the importation of goods obtained in ways that would threaten dolphins or cause them suffering based on clause (b) or (g) of article XX which allows exceptions based on the need to protect human animal or plant life, or when relating to the conservation of exhaustible natural resources if such measures were made effective n conjunction with restriction on domestic production.[footnoteRef:16] However in sea turtle case the US ban on shrimp caught by fishing fleets, not using devices to exclude sea turtles was found to be violation of the WTO treaty,[footnoteRef:17] and its defense of relying on Article XX (b) and (g) was rejected on the basis that all other avenues for achieving the desired objective should have been exhausted and also because it required the same methods of excluding turtles used by domestic vessels to be used by other nations instead of allowing other methods of avoiding harm to turtles.[footnoteRef:18] [16: One Economy Peter Singer Pg 66-68, WTO Article XX (b), (g)] [17: US Imprt Prohibition of Certain Shrimp and Shrimp Products (Shrimp- Turtle case), WTO doc. WT/DS58/AB/R, adopted November 6, 1998] [18: US Imprt Prohibition of Certain Shrimp and Shrimp Products (Shrimp- Turtle case), WTO doc. WT/DS58/AB/R, adopted November 6, 1998]

Furthermore it is clear as Charles Barfield argues in his book that the appellate body appears to have succumbed to pressures and is including soft and customary law as precedents for their decisions to fill in the gaps that have that have arisen as result of the inefficient mechanism of rule creation in the WTO. Often times the underlying treaty text contains gaps ambiguities and contradictory language in order to full these gaps Barfield argues that eh appellate body is increasingly being pressured to create law. Raising issues of consent from states and also questions of democratic legitimacy.

Some have responded to claims that sovereignty is not compromised by WTO as nations are free to leave as a too simplistic view of sovereignty especially when governments remain under constant pressure to remain within the WTO.[footnoteRef:19] [19: One Economy Peter Singer Pg 70-71]

They point to the fact that once a government is part of the WTO whole industries form, which are based on free trade. These industries employ a large number of people and the likelihood these industries will collapse should the government withdraw from the treaty is so great that withdrawing becomes almost unthinkable. [footnoteRef:20] [20: One Economy Peter Singer Pg 70-71]

Democracy and the WTO (Part 3)

What does democracy mean in the international context? Democracy is a contested concept with many different meanings.[footnoteRef:21] Traditionally it has included ideas of self-government on an equal footing by citizens or striving to achieve this ideal.[footnoteRef:22] There are many forms of democracy but as this is a short essay it will focus mainly on representative democracy. In the international context nations are the representatives of their population when participating in the WTO.[footnoteRef:23] International democracy may include matters such as nations being able to make decisions within the WTO in a process that is democratic and gives all nations an equal chance to participate in the decision making process. It may also mean that the rules of WTO should not undermine the ideals of democracy by interfering in the democratic processes of states. [21: The Riddle of All Constitutions International Law, Democracy, and the Critique of Ideology Susan Marks 2 (Oxford 2000) ] [22: The Riddle of All Constitutions International Law, Democracy, and the Critique of Ideology Susan Marks 2 (Oxford 2000)] [23: student essay ]

WTO is democratic: (a) WTO helps promote democracy at a domestic levelAccording to the public choice theory the WTO may be a democracy enhancing institution because it helps governments remain faithful to popular choices rather than limited self-interest of narrow group interests.[footnoteRef:24] This theory presumes that government policy reflects the equilibrium outcome of a rivalrous process among competing interest groups who try to influence governmental policy to further their own ends (this might be through influencing the legislature through financial contributions to campaigns of government officials or through other kinds of lobbying),[footnoteRef:25] and as a result resources are diverted away from popular choices in to serving these limited ends. This theory suggests that WTO may depoliticize policy options there by enabling these matters to be dealt with in a principled manner that limits the power and access of these narrow interest groups.[footnoteRef:26] [24: 863 rethinking the ] [25: 26 Harv. Int'l. L. J. 501 (1985) Trading Nation's Dilemma: The Functions of the Law of International Trade, The, Abbott, Kenneth W. 514 ,521-525] [26: 864 rethinking the ]

However it should be noted that one weakness of this argument is that it does not adequately explain why the same narrow interest groups do not dominate the WTO.[footnoteRef:27] Indeed it is often argued that this is just what happens with national governments being used by corporations to fight for their own narrow interests. For instance the fact the Kodak/Fuji case is commonly referred to by the names of the private interests behind the litigation, rather than that of the states seems to indicate how influential these narrow interests can be even within the WTO, which operates on the international level.[footnoteRef:28] [27: 866 rethinking the ] [28: The World Trade Organization and Human Rights Interdisciplinary Perspectives320 Eds Sarah Joseph ]

(b) WTO makes decsions by consensusAn information leaflet issued by the WTO states that the WTO is not undemocratic as it takes decisions by consensus. It argues that this is in practice more democratic than rule by majority as all the nations have to agree. However this statement has been criticized by Singer who argues that this is a strange conception of democracy as this allows the status quo to be protected as there will always be one member that will prefer that which they are familiar with this means that the rules and decisions do not reflect what the majority of nations may want. This argument is also criticized in a memorandum submitted to the WTO by ten NGOs which included Oxfam and the Third World Network. The memorandum states that in practice consensus has a double standard meaning whereby whenever major developed countries reach an agreement amongst themselves an emerging consensus is said to exist but when the majority of countries and agree but the few major countries do not a consensus is said not to exist.

WTO is undemocratic

(a) WTO does not allow for all decision makers to take part on an equal footingOne of the reasons that the WTO attracts criticism that it is an undemocratic is because developing states which make up over half of the WTO membership are not able to participate meaningfully in the decision making process, their voices often times remain unheard. For instance nations with limited resources are often barred from effectively participating and pursuing negotiations due to the costs of doing so. [footnoteRef:29]Such states are unable to maintain a full time office in Geneva and if they are able to the staff they may be able to spare will not be enough to deal with an overloaded agenda with various meetings scheduled which are often scheduled simultaneously. This situation is doubly worsened by the fact that if the members are not in attendance they are counted as part of the consensus. [29: Peter singer and TWN memo page 10 ]

Another glaring example of the lack of democracy in decision making are the infamous green room deals. Where major countries such as the US Japan Canada and the EU reach agreements on important issues and present it fiat accompli to other states with no input from any other state.[footnoteRef:30] [30: Peter singer 76 TWN ]

However it should be noted that there have been some attempts at reforming this situation. For instance the WTO has committed itself to providing resources for smaller nations to enable them to participate in the negotiationsThe lack of resources by smaller nations may also to a small measure be mititgated by the resourcs provided by NGOs such as the Cathloc which has provided valuable insight for many of these countriesAlthough small green room type meetings stil occure here have been attempts at making it more nclusive by incudiing variojs countries in this process

(B) The dispute resolution system One of the reasons for the criticism directed at the WTO is that the appellate body is seen to be undermining the rule making function of the WTO members by interpreting the treaty in a manner that was not foreseen by the WTO members,[footnoteRef:31] and also by legislating to fill in the gaps in the WTO treaty.[footnoteRef:32]. For instance Singer referes to the fact that although the WTO trade rules were negotiated by member governments and ratified in their parliaments the interpretation method of the DSB has prevented articles such as article XX from being given full effect. He argues that although the countries knew about the product process distinction when they signed the WTO treaty they had reason to believe that this argle XX guaranteed them that the agreement would not prevent them from acting in good faith to protect public morals other matters mentioned in the article. However as discussed above the WTO interepeted this article very restrictively depriving the article of its full effect. Singer argues that if a court were to interpret an article in tis manner in a domestic context the parliament wold be able to legislat to give effect to its intention but in the WTO all it takes is one member to block the consens from achiving this aim [31: peter singer ] [32: Charles barrfield page 11 chapter 4 ]

It is also argued that the DSB is undermining the ability member economys legislature to make choices based on the domestic democratic will. Critics refer to cases such as the Beef Hormone case where the EU banned beef imports from the US which had However it should be noted that in cases such as the Beef case the howswer