What subjects are suitable for WTO agreement?*
The European Community (EC) is pressing for a new round of trade negotiations, and it proposes an agenda that includes, inter alia, new World Trade Organisation (WTO) agreements on environmental issues; labour standards; competition policy; and treatment of foreign investment. Following on the heels of the Trade-Related Intellectual Property Rights (TRIPS) agreement and the General Agreement on Trade in Services (GATS), this proposal to extend WTO disciplines to further areas of economic activity raises the question of which issues are suitable for WTO agreements, and which not.
Members of the WTO have different views on the question. Some Members see the WTO, and the strong Dispute Settlement Understanding, as potential means of solving all manner of problems. They place no restriction on topics for WTO agreements except, perhaps, a requirement that the issue has a “trade-related” aspect. But that is not a demanding condition: most issues have some link with international trade. This view therefore suggests that many issues could properly become the subject of agreements in the WTO.
A conflicting response is driven by concerns about national sovereignty. Many developing countries–but not only developing countries–feel that the outcome of the Uruguay Round compromised their sovereignty. Such countries reject the ideaof “intrusive” newagreements. Almostbydefinition, though, new WTO agreements that are effective will seem intrusive. Concern about national sovereignty therefore suggests that new agreements, if there are to be any at all, must have very strong justification.
“Justification” provides the focus of this paper. For individual WTO Members, of course, a new agreement will be “justified” if it raises incomes in that Member or provides some other benefit to its citizens or to members of its government. That is not objectionable. It is, however, parochial, and the question addressed here is whether there are defensible but less parochial criteria for judging subjects proposed for new agreements.____________________