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The World Trade Organization Under Challenge: Democracy and the Law and Politics of the WTO’S Treatment of Trade and Environment Matters

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The World Trade Organization Under Challenge: Democracy and the Law and Politics of the WTO’S Treatment of Trade and Environment Matters The World Trade Organization under Challenge: Democracy and the Law and Politics of the WTO’s Treatment of Trade and Environment Matters by Gregory Shaffer, Professor, University of Wisconsin Law School The final version was published in 25 Harvard Environmental Law Review 1-93 (Winter 2001). I. Theoretical Approaches to the WTO’s Treatment of Trade and Environment Matters: The Confrontation of Empirics A. An Intergovernmental Approach B. A Supranational Technocratic Approach C. A Civil Society/Stakeholder Approach II. Why Was the WTO Committee on Trade and Environment Formed? III. What Accounts for the Agenda of the Committee on Trade and Environment? A. Market Access Issues of Concern to All B. Environmental Issues of Primary Concern to the United States and EC C. Environmental Issues of Primary Concern to Developing Countries IV. Alternative Explanations of the Current Status of the CTE Process: Contending States, Neoliberal Networks, Conflicted Stakeholders A. Why Negotiation of the 1996 CTE Report Mattered B. The Predominant Role of States 1. Intra-State Conflicts 2. State Power 3. Divisions between Powerful States 4. Divisions between Developing Countries 5. Attempts to Change Southern Norms C. Role of Neoliberal Interests and Ideas 1. Role of State Trade Bureaucracies 2. Role of Business Interests 3. Role of the WTO Secretariat D. Role of Other Stakeholders: Environmental and Developmental Non-governmental Organizations E. Relation of State and Stakeholder Positions V. Legacies of the WTO Committee on Trade and Environment: Spillover Effects Within and Outside of the World Trade Organization A. The CTE as a Laboratory for Increasing WTO Transparency: Enhancing the Role of Civil Society? B. The CTE as a Mechanism for Overseeing Environmental Policy: Enhancing the Role of Technocratic Elites? VI. Conclusions: The World Trade Organization as a Conduit for States Responding to Domestic Pressures; The Prospects of a World Environment Organization A. A Two-Level Intergovernmental Game: The WTO as an Agent of States B. A Possible Byproduct of WTO Trade-Environment Conflicts: The Practicable Role and Limits of a World Environment Organization Table 1. The Agenda of the WTO Committee on Trade and Environment and State Participation 2 The World Trade Organization under Challenge: Democracy and the Law and Politics of the WTO’s Treatment of Trade and Environment Matters by Gregory C. Shaffer1 “Hey-Hey! Ho-Ho! The WTO has got to go!” chanted a potpourri of protestors at the third Ministerial Meeting of the World Trade Organization (WTO), held in Seattle, Washington in December 1999.2 Mainstream U.S. environmental groups were a core part of the protests, having taken the lead throughout the 1990s in challenging the legitimacy of WTO decision- making. Their central claim is that WTO decisions on trade and environment issues are anti- democratic and thus lack legitimacy.3 This article takes their charges seriously, assessing the 1 By Gregory C. Shaffer, Professor, University of Wisconsin School of Law. The primary support for this project came from grants from the National Science Foundation Law and Social Science Program and the Smongeski Fund of the University of Wisconsin Foundation. This was complemented by support from the University of Wisconsin graduate school research competition, the University of Wisconsin CIBER fund (U.S. Title VI grant) and the University of Wisconsin World Affairs and the Global Economy (WAGE) Initiative. Earlier versions of this article were presented at the American Society of International Law 1999 annual meeting in Washington DC, March 27, 1999, and at the ASIL International Economic Law Group biannual conference on February 20, 2000 in Washington DC. Thanks go to Francesca Bignami, Steven Charnovitz, Jeffrey Dunoff, Daniel Esty, Robert Hudec, Neil Komesar, Richard Parker, Kal Raustiala and Andrea Schneider for their helpful comments, and to Sonia Brown, Matthew Kim-Miller and Michael Mosser for valuable research assistance. All errors of course remain my own. 2 Joe Sharkey, Word for Word/Protest Studies, Skywriting, Collective Disappearance and Other Ways to Up the Revolution, N.Y. TIMES 7 (Dec. 5, 1999). 3 See e.g. LORI W ALLACH AND MICHELLE SFORZA, WHOSE TRADE ORGANIZATION? CORPORATE GLOBALIZATION AND THE EROSION OF DEMOCRACY (Public Citizen: 1999) (the Preface by Ralph Nader refers to “an autocratic system of international governance that favors corporate interests,” and concludes that “Under the WTO, the race to the bottom is not only in standard of living and environmental health safeguards but in democracy itself” Id., at ix, xi) (underlining included in text); Steven Greenhouse, Trade Ministers Sidestep a Sticky Issue: Secrecy, N.Y. TIMES 6 (Dec. 4, 1999) (quoting Lori Wallach, director of Public Citizen’s Global Trade Watch and noting demonstrator’s signs such as “Where Have You Gone, Joe Democracy?”); Henry Holmes, The World Trade Take- Over, EARTH ISLAND JOURNAL 38 (winter 1999-2000) (referring go “the WTO’s masterplan,” including its “seeking to expand its ability to override environmental laws); and the statement of WWF-World Wide Fund for Nature, “The WTO remains an institution captured by the special interests of multinational corporations and free trade technocrats.” Don Knapp, WTO Rejects U.S. Ban on Shrimp Nets That Harm Sea Turtles, CNN (Oct. 12, 1998) available in <http://www.cnn.com/US/9810/12/world.trade.ruling/>. See also the full page advertisement in the New York Times taken out by a consortium of non-governmental organizations, including Friends of the Earth, Sierra Club, the Humane Society of the USA, and Greenpeace USA, under the “Turning Point Project,” entitled Invisible Government, A14 (Nov. 29, 1999) (stating “The World Trade Organization (WTO) is emerging as the world’s first global government... and its mandate is this: To undermine the constitutional rights of sovereign nations”). 3 relative representativeness of those partaking in WTO negotiations to define a legal framework for addressing the interaction of trade and environmental policies. The basic question is who is represented and how they are represented in determining law’s contours through the political process at the international level.4 This article examines how the World Trade Organization has addressed trade and environment issues through the creation of a specialized Committee on Trade and Environment (CTE), treating the Committee as a site to assess central concerns of governance–that is, who governs–in a globalizing economy. Northern environmental interest groups and many northern academics5 criticize the WTO Committee on Trade and Environment for failing to propose substantive changes to WTO law in order to grant more deference to national environmental policies having extraterritorial effects.6 The article, through its focus on the positions and roles of 4 This article addresses the issue of representation in the negotiation and creation of WTO rules, and not the interpretation of existing WTO rules by WTO judicial panels, which is the subject of a separate on-going study 5 This article expressly adopts the term northern—and not western—non-governmental organizations, academics, media, and governments to emphasize that these are predominantly north-south, and not east-west, issues that often divide not only governments, but also their respective constituencies, in reflection of their respective interests, values and priorities. 6 See, e.g., Steve Charnovitz, A Critical Guide to the WTO’s Report on Trade and Environment, 14 ARIZONA J. OF INT’L & COMP. L. 341, 342 (1997) (stating “hopes were dashed. When the CTE issued its report in November 1996, it became clear that two years of inter-governmental deliberations had yielded little output.”); World Wide Fund For Nature (WWF), Introduction to The WTO Committee on Trade and Environment Is it Serious? (maintaining that the Committee is not serious about “making appropriate recommendations on whether any modifications of WTO rules” are required to accommodate environment policies) (visited Oct. 31, 1999) <http://www.panda.org/resources/publications/sustainability/wto/intro.htm>; International Institute for Sustainable Development (IISD), The World Trade Organization and Sustainable Development: An Independent Assessment,(maintaining that the Committee has failed to fulfill its primary task of recommending necessary changes to WTO provisions) (visited Oct. 31, 1999) <http://iisd.ca/trade/wto/wtoreport.htm>. A number of U.S. and European academics have recommended a modification of WTO substantive and/or procedural rules in order to grant more deference to national environmental policies having extraterritorial effects. See e.g. DANIEL ESTY, GREENING THE GATT: TRADE, ENVIRONMENT, AND THE FUTURE 113-136 (1994) [ESTY, GREENING THE GATT] (proposing a three-prong test to address trade-environment issues in a more balanced manner); Jeffrey Dunoff, The Death of the Trade Regime, 10 EJIL 733 (proposing new procedural mechanisms whereby WTO dispute settlement panels would avoid controversial trade-environment cases on standing, ripeness, political question and related ground, thereby permitting domestic trade restrictions imposed on environmental grounds to remain unchallenged before the WTO); Jeffrey Dunoff, Institutional Misfits: The GATT, the ICJ & Trade-Environment Disputes, supra note 5, at 1043 (recommending an institutional alternative to the GATT for the resolution of trade-environment conflicts); Philip Nichols, Trade Without Values, 90 Nw. U.L.
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