Linkage of Free Trade and Social Regulation: Moving beyond the Entropic Dilemma

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INTRODUCTION

In the early 1990s, as the historic Uruguay Round struggled toward a successful conclusion, a panel established under the General Agreement on Tariffs and Trade ("GATT"),1 which had governed international trade for the previous half century, struck down a recently enacted US embargo on Mexican yellow-finned tuna.2 The US Marine Mammal Protection Act of 1972(3) had proscribed a certain controversial tuna fishing practice that inevitably caused the incidental killing of dolphins on a large scale. The gist of the panel's ruling was that the US embargo was not necessary to protect marine mammals because the US had failed to explore other reasonable, less trade-restrictive alternatives, including reaching a cooperative arrangement with tuna exporters such as Mexico.

Whatever the merits of the panel decision, environmentalists in the US and other Western countries led popular protests against the decision based on the view that it had arrogantly countermanded a widely popular domestic measure intended to protect the beloved dolphin, as well as other endangered marine mammals. Some protesters performed a scene in which "GATTzilla," a demonization of GATT as the famed Japanese monster, devoured helpless little dolphins. Through this and other similar publicity methods, protesters were quite successful in depicting GATT-and free tradists in general-as cold-blooded monsters that cared little about legitimate environmental causes.

In the late 1990s, hope and frustration contended once again in the lead-up to the historic Seattle Round, which was marred by a protest with an estimated 50,000 to 100,000 participants. This global alliance of protesters, unprecedented in scale and intensity, accused the World Trade Organization ("WTO"),4 the successor to the old GATT, of ignoring environmental values in the name of free trade. This time, the alleged victims were sea turtles sacrificed in the process of shrimp harvesting. In a decision rendered not long before the Seattle Ministerial Meeting, the WTO Appellate Body struck down a US ban on shrimp harvested by India, Malaysia, Pakistan, and Thailand which used shrimping methods that inevitably caused the incidental killing of sea turtles on a large scale. The Seattle protest was fueled by a generalized antiglobalization mood, reinforced by an unlikely alliance between "Turtles and Teamsters," and finally aided by then President Bill Clinton's unexpected expression of sympathy for the goals of the street protesters. In the end, the Seattle Round proved to be a fiasco.

The two cases described above illustrate a glaring tension between free trade and social regulations in areas such as environmental protection. On the one hand, such tension eloquently demonstrates the existence in a phenomenological sense of a certain "link" or "linkage" between various competing values associated with the regulation of international trade. In fact, this linkage seems an inevitable phenomenon considering the multiplicity of values that individuals, states, and institutions pursue. People seem to desire free trade-or at least global free markets, driven by the principle of efficiency-that expands economic opportunity and promotes material welfare. At the same time, they also yearn for a better quality of life-including better social hygiene in the areas of environmental quality and human safety-and value the principle of regulatory autonomy.

Yet in the real world, such values and policy objectives are not formulated or analyzed in isolation. Rather, they tend to be addressed in combination by means of relational approaches that emphasize areas of mutual influence. This relational posture, which is strongly influenced by the current high level of economic interdependency, is itself a function of the natural linkage among the values in question.

On the other hand, tension stemming from competing values constitutes a threat to the institutional integrity of the global trading system. …