Abstract
Is the World Trade Organization (WTO) in a legitimacy crisis and might the protracted Doha negotiations be evidence of it? This article understands the notion of ‘legitimacy crisis’ as a severe threat to an institution’s viability due to fundamental shifts in the legitimising ideas underlying the institution, an external threat to its values or its ability to fulfil its functions. It contends that the WTO is not yet definitely in a legitimacy crisis because the Doha negotiations still reveal the commitment of the WTO members to the values and legitimising ideas of the WTO. Perception of a legitimacy crisis fuels the negotiation of free trade agreements (FTAs) amongst key WTO members, which could be used to advance the Doha negotiations, force developing countries into agreement and shape the outcome of the negotiations in favour of developed countries. Such an outcome, this chapter cautions, could be the real onset of a legitimacy crisis if developing countries gain very little from a Doha agreement. To prevent a crisis and move the negotiations forward this chapter suggests that the different trade-related development needs of developing countries need to be assessed more seriously and developing countries need to be enabled to address serious adverse consequences linked to any trade liberalisation they undertake.
Assistant Professor, University of Antwerp. I am thankful to the reviewers and the Editorial Board of the Netherlands Yearbook of International Law for incisive and helpful comments. All errors remain mine.
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- 1.
WTO Ministerial Declaration, WT/MIN(01)/DEC/1, 14 November 2001, Preamble (hereinafter Doha Ministerial Declaration).
- 2.
- 3.
I use the terms objective normative legitimacy and perceived legitimacy to distinguish between, on the one hand, a prescriptive evaluation of the WTO against the set of benchmarks one has reason to accept as the best indicators of the legitimacy of a legal-political system and, on the other hand, the legitimacy beliefs key actors and observers of the system hold, respectively. Empirically existing legitimacy beliefs of actors do not necessarily coincide with the most plausible indicators of legitimacy. Therefore, an organisation or legal system can be in an objective normative legitimacy crisis even though it is widely supported by actors’ legitimacy beliefs and, vice versa, perceived, empirical legitimacy can be low while normative legitimacy can be high.
- 4.
- 5.
The term ‘output legitimacy’ refers to the results of authoritative norm-setting processes being acceptable on substantive grounds. The term ‘input legitimacy’ refers to the process through which law is made.
- 6.
Preamble of the 1994 Marrakesh Agreement Establishing the World Trade Organization, 1867 UNTS 154.
- 7.
WTO Briefing Note, 3 December—The Final Day and What Happens Next, 3 December 1999, http://www.wto.org/english/thewto_e/minist_e/min99_e/english/about_e/resum03_e.htm. Accessed 26 November 2013.
- 8.
WTO Briefing Note, Ministers Consider New and Revised Texts, 2 December 1999, http://www.wto.org/english/thewto_e/minist_e/min99_e/english/about_e/resum02_e.htm. Accessed 26 November 2013; WTO Briefing Note, Ministers Start Negotiating Seattle Declaration, 1 December 1999, http://www.wto.org/english/thewto_e/minist_e/min99_e/english/about_e/resum01_e.htm. Accessed 26 November 2013.
- 9.
Doha Ministerial Declaration, paras. 20, 23, 26 and 27.
- 10.
Ibid., Recitals 2 and 3 and paras. 12–14, 16, 42–44.
- 11.
SDT provisions are special accommodations for developing and least-developed WTO members, allowing them to maintain higher tariffs and other restrictive regulations of commerce, longer transition periods for compliance with WTO obligations and giving them enhanced but discretionary market access through lower tariff rates for exports to the preference-granting member than the most-favoured nation tariff rate the grantee has agreed to apply to all other WTO members.
- 12.
The General Agreement on Trade in Services (GATS) creates an in-built agenda, meaning that future negotiations on services would be automatic in its Article XIX. 1994 Marrakesh Agreement Establishing the World Trade Organization, Annex 1 B General Agreement on Trade in Services, 1869 UNTS 183.
- 13.
In particular, how to ensure access to medicines and generics notwithstanding patent protection of the relevant drug for developing countries without manufacturing capacity of their own and the question of the extension of protection afforded for geographical indications (e.g. Parma ham) other than alcoholic beverages. If a geographical indication has received IP-right protection, products produced outside the geographic indication may not use the appellation.
- 14.
Doha Ministerial Declaration, paras. 15–19, 28–30.
- 15.
WTO Summary, Day 5: Conference Ends without Success, 14 September 2003, http://www.wto.org/english/thewto_e/minist_e/min03_e/min03_14sept_e.htm. Accessed 26 November 2013; Wilkinson and Lee 2007, at 5.
- 16.
WTO, Text of the ‘July Package’—the General Council’s Post-Cancún Decision, 2 August 2004, http://www.wto.org/english/tratop_e/dda_e/draft_text_gc_dg_31july04_e.htm. Accessed 26 November 2013.
- 17.
WTO, Doha Work Programme, Ministerial Declaration, WT/MIN(05)/DEC, 18 December 2005 (hereinafter Hong Kong Ministerial Declaration); WTO Summary, Ministers Agree on Declaration that ‘Puts Round back on Track, 18 December 2005, http://www.wto.org/english/thewto_e/minist_e/min05_e/min05_18dec_e.htm. Accessed 26 November 2013.
- 18.
WTO, Negotiating Group on Market Access, Market Access for Non-Agricultural Products, Report by the Chairman, Report by the Chairman, Ambassador Don Stephenson to the Trade Negotiations Committee, JOB(08)/96, 12 August 2008; WTO, Committee on Agriculture, Report to the Trade Negotiations Committee by the Chairman of the Special Session of the Committee on Agriculture, Ambassador Crawford Falconer, JOB(08)/95, 11 August 2008.
- 19.
WTO, Eighth Ministerial Conference, Chairman’s Concluding Statement, WT/MIN(11)/11, 17 December 2011.
- 20.
Compared to the initial ambition of the Doha Development Agenda, the Doha-related results of the Bali conference are notable for what was not decided. There is no agreement on domestic agricultural support, agricultural and non-agricultural tariff reduction, services, TRIPS or DSU reform. On agricultural export subsidies, WTO members commit to continue the progress toward the elimination of all export subsidies and equivalent measures but there are no deadlines and no modalities, except for the commitment that real amounts of export subsidies and equivalent measures should be significantly below bound rates and not be increased. Cotton subsidies have to be eliminated. Stockpiling for food-shortages is allowed and tariff quotas are subjected to the import licensing agreement. Developed countries grant least-developed countries (LDCs) duty free and quota free market access on at least 97 % of tariff lines and preference-granting countries endeavour so simplify preferential rule of origin for LDCs but there are no precise, binding commitments. The Council for Trade in Services is instructed to work towards a list of service sectors and modes of supply for preferential access of LDC service suppliers on a request-offer basis. WTO members have also agreed to a monitoring mechanism of special and differential treatment (SDT) provisions with the ability to recommend the start of re-negotiations of provisions and make substantive recommendations for implementation and produced a detailed agreement on trade facilitation. The really significant trade-generation will arise from the trade facilitation agreement. The significance of the export subsidy commitment depends on the willingness of panels and the Appellate Body to interpret the term ‘significant’ maximally. The SDT monitoring mechanism is helpful in terms of generating knowledge on how trade can advance development. These reforms are no doubt positive but they remain far below what should have been achieved to enable developing countries to derive greater benefits from participation in the multilateral trading system. Overall, the Bali results confirm the hypothesis that FTAs have had the effect of forcing developing countries to agree to a deal with insignificant development benefits. Bali Ministerial Declaration and Decisions, 7 December 2013, https://mc9.wto.org/draft-bali-ministerial-declaration. Accessed 10 December 2013.
- 21.
Esty 2002.
- 22.
Ibid., at 10.
- 23.
Ibid., at 11–15.
- 24.
Ibid., at 17.
- 25.
Ibid., at 17.
- 26.
Ibid., at 18–9.
- 27.
Ibid., at 18.
- 28.
For instance, references to protests against the WTO in Esty’s article seem to reflect a concern with perceived legitimacy, while the rest of the article clearly provides an independent analysis of the normative legitimacy of the WTO. Esty 2002, at 7–9 and 19.
- 29.
- 30.
Hüller and I have suggested that in order to enhance its procedural and substantive legitimacy, the WTO needs to address certain ‘structural problems’, inter alia the centrality of consensus decision-making, which structurally privileges the status quo, and the exclusion of developing countries from substantively fully equal participation through substantive protections of their interests. Herwig and Hüller 2008, at 225–230.
- 31.
In the DDA, WTO members set out to liberalise agricultural trade, reduce tariffs of developed and developing countries, to clarify the relationship between WTO law and multilateral environmental agreements and in the course of the negotiations, they also managed to enhance access to affordable generic medicines notwithstanding the protection of intellectual property rights in the TRIPS Agreement.
- 32.
Wilkinson and Lee 2007, at 22.
- 33.
The eighth is the Uruguay Round.
- 34.
Winham 2007, at 233, 235–236.
- 35.
Ibid., at 235.
- 36.
Hong Kong Ministerial Declaration, para. 24.
- 37.
Ibid.
- 38.
Import substitution policies sought to replace purchase of imports with purchase of domestic products by applying high tariffs to imports. The idea was that this would give the domestic industry a leg up and promote broader economic development.
- 39.
Winham 2007, at 233, 235.
- 40.
Lee and Wilkinson 2007, at 10.
- 41.
Similarly, Schwab 2011, at 105, 117.
- 42.
Formula-based negotiations mean that several or even all tariff lines will be subject to the same liberalisation commitment. For instance, linear cuts across all tariff lines would simply reduce all tariffs by a given amount no matter the prior level of tariff binding. The Swiss formula foresees steeper cuts in tariffs for tariff lines subject to a higher tariff than for lines subject to a low tariff.
- 43.
Winham 2007, at 242.
- 44.
Dirk de Bièvre brought this to my attention.
- 45.
An overview of the agriculture negotiations and modalities is in WTO, Unofficial Guide to the Revised Draft Modalities—Agriculture, 6 December 2008 (hereinafter Unofficial Guide to Revised Draft Modalities), http://www.wto.org/english/tratop_e/agric_e/ag_modals_dec08_e.pdf. Accessed 26 November 2013.
- 46.
WTO, An Unofficial Guide to Agricultural Safeguards: GATT, Old Agricultural (SSG) and New Mechanism (SSM), 5 August 2008, http://www.wto.org/english/tratop_e/agric_e/ssm_explained_4aug08_e.pdf. Accessed 26 November 2013; WTO, Committee on Agriculture, Revised Draft Modalities for Agriculture, TN/AG/W/4/Rev.4, 6 December 2008, paras. 126–127.
- 47.
Schwab 2011, at 110.
- 48.
Unofficial Guide to Revised Draft Modalities.
- 49.
For an overview of the NAMA negotiations and modalities, see WTO, The December 2008 NAMA Modalities Text Made Simple, http://www.wto.org/english/tratop_e/markacc_e/guide_dec08_e.htm. Accessed 26 November 2013.
- 50.
Schwab 2011, at 109–110.
- 51.
Ibid.; WTO, Trade Negotiation Committee, Report by the Director-General on his Consultations on NAMA Sectoral Negotiations, TN/C/14, 21 April 2011.
- 52.
Ibid., at 6.
- 53.
- 54.
Mavroidis 2011, at 370.
- 55.
WTO, Differential and More Favourable Treatment, Reciprocity and Fuller Participation of Developing Countries, L/4903, Decision of 28 November 1979; European Communities—Conditions for the Granting of Tariff Preferences to Developing Countries, Report of the Appellate Body, WT/DS246/AB/R, 20 April 2004, paras. 162–165.
- 56.
Hoekman 2010, at 516.
- 57.
Ibid.; Lee and Wilkinson 2007, at 11.
- 58.
WTO, Negotiating Group on Market Access, Fourth Revision of Draft Modalities for Non-Agricultural Market Access, TN/MA/W/103/Rev.3, 6 December 2008.
- 59.
Mavroidis 2011, at 372–374.
- 60.
Ibid., at 374–375 ff.
- 61.
United States—Subsidies on Upland Cotton, Report of the Appellate Body, WT/DS267/AB/R, Report of the Panel, WT/DS267/P/R, 21 March 2005.
- 62.
For an overview of the FTAs the EU has finished, see European Commission, Memo. The EU’s Bilateral Trade and Investment Agreements—Where Are We?, 1 August 2013, http://trade.ec.europa.eu/doclib/docs/2012/november/tradoc_150129.doc.pdf. Accessed 22 October 2013.
- 63.
Mavroidis 2011, at 376.
- 64.
Scott suggests that the trade deficit explains the US’ tough stance in the negotiations before the 2008 financial crisis. Scott 2007, at 111–117. Ismail affirms that the EU and the US have continued to be protectionist after the financial crisis. Ismail 2009, at 581, 587–589. For evidence of the impact of the financial crisis on reducing trade flows, see George et al. 2010.
- 65.
Clapp mentions the example of Colombia, Peru, Guatemala and El Salvador leaving the G20 following pressure from the US to leave the group or forfeit the bilateral trade liberalisation. Clapp 2007, at 45. Taylor also suggests that the EU used preferential access to divide developing countries. See also Taylor 2007, at 159.
- 66.
Manger 2009, at 15–19, 39–51.
- 67.
Ibid., at 55–61.
- 68.
See discussion in Sect. 7.3.3 above.
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Herwig, A. (2014). The WTO and the Doha Negotiation in Crisis?. In: Bulterman, M., van Genugten, W. (eds) Netherlands Yearbook of International Law 2013. Netherlands Yearbook of International Law, vol 44. T.M.C. Asser Press, The Hague. https://doi.org/10.1007/978-94-6265-011-4_8
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