The Globalization of Health and Safety Standards: Delegation of Regulatory Authority in the SPS Agreement of the 1994 Agreement Establishing the World Trade Organization
Buthe, Tim, Law and Contemporary Problems
INTRODUCTION: THE GLOBALIZATION OF HEALTH AND SAFETY STANDARDS
Previous research has shown that international organizations do not necessarily operate or act as intended by the states that created them. (1) Why then would states delegate regulatory authority to international organizations? I examine this question theoretically, drawing on principal-agent (P-A) theory and conceptualizing international delegation as a particular form of institutionalized cooperation. Explaining international delegation thus requires an analytically prior explanation of international cooperation. Empirically, I focus on the delegation of standards-setting authority in the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement), which is an integral part of the founding treaty of the World Trade Organization (WTO), negotiated during the Uruguay Round of the General Agreement on Tariffs and Trade (GATT). (2)
States should be particularly hesitant to delegate standards-setting in the realm of SPS standards since these standards are often the technical basis for politically sensitive health and (food and consumer) safety regulations. Indeed, setting sanitary standards to protect human and animal health from risks arising from additives, toxins, diseases, and disease-carrying organisms and setting phytosanitary standards to protect plants from similar risks used to be predominantly a domestic issue. In recent years, however, we have witnessed what one might call the globalization of SPS standards and standards-setting. SPS standards-setting today takes place, in large part, in three international organizations--the Codex Alimentarius Commission (CAC), the International Office of Epizootics (OIE), and the International Plant Protection Convention (IPPC)--which have a global membership of 171, 169, and 161 countries, respectively. This change has occurred mostly as a consequence of the SPS Agreement, which delegates standards-setting functions to these three international organizations. (3)
This delegation of regulatory authority is the focus of this article. Since readers may not be familiar with the SPS Agreement, Part II provides a sketch of the main provisions and significance of the Agreement and an account of how it came about in the context of the Uruguay Round negotiations of the GATT. This empirical sketch leads to two analytical questions: Why did the contracting parties of the GATT decide to cooperate on SPS standards? And why did they select delegation as the means to achieve this objective? Parts III and IV analyze these questions theoretically and empirically. I derive possible answers from a political-economy approach in the liberal tradition of International Relations theory, which emphasizes cost-benefit analyses, diversity of interests within states, and issue-specific bargaining power to explain cooperation. (4) Based on this logic, the decision whether to delegate should be a function of the costs and benefits of delegation, which leads me to build on P-A theory to explain international delegation. In Part III.C, I derive alternative (not necessarily strictly competing) hypotheses from the Realist and constructivist traditions in International Relations theory.
Part IV analyzes cooperation and delegation empirically. The foremost objective of the SPS Agreement was the liberalization of agricultural trade, which was particularly contentious between the United States and the European Community (EC) and had been a key demand of developing countries for the Uruguay Round. (5) The empirical analysis therefore focuses on the United States, the EC, and developing countries. Broad-based agreement on the desirability of international cooperation allowed for an early decision in favor of harmonization and the presumption of GATT/WTO compliance for "international [SPS] standards." (6) This decision, in favor of cooperation in general, is well explained by a rationalist political-economy account but also appears to have been facilitated by the widespread belief in the legitimacy of international harmonization. …