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Saturday, May 18, 2013


Siamese Twins: Trade & Sustainable Development

The launch of the WTO denoted a new era in international trade relations. A number of taboo issues have been incorporated into the international trading system, such as the agricultural products. Some progress has been achieved on services and intellectual property rights. But the accolades for the WTO may be precipitate if WTO members do not enforce the goals of trade liberalization and sustainable development as equally supportive. WTO members have to persuade a skeptical public that trade liberalization can contribute to sustainable development improvement. Will WTO members be able to respond to this challenge?
Trade considerations are increasingly important in shapping economic policies in all countries, developed as well as developing. The primary assumption is that trade liberalization leads to greater prosperity, which in return creates better condition for sustainable development governance at the global level. For instance, in the Marrakesh Agreement, members do recognize that trade policies should support raising standards of living, ensure full employment and economic growth, and seek the optimal use of the world’s resources in accordance with the objective of sustainable development. Despite the fact that sustainable development issues are part of the WTO’s mandate, most of the world’s sustainable development indicators have been steadily deteriorating in the recent past and at the global level.
There is a major disagreement among developed and developing countries regarding the nature of the WTO’s mandate and its impact on international trade rules. Some argue that trade liberalization plays an important role for countries, both developed and developing, towards sustainable governance policies. Others oppose that WTO’s rules play an important role towards a general decline in sustainable issues. The most contentious source of disagreement among WTO members is how sustainable development issues should be enforced for trade purposes. Continuing support for trade liberalization depends on the ability of WTO members to ensure that trade liberalization benefits are widely and sustainable distributed, and then the legitimacy of the trade regime will be widely accepted. However, the almost last two decades of WTO have not been encouraging. The Committee on Trade and Development has not achieved anything remarkable. It has continued a record of uselessness that dates back to the old GATT level. Most of the cases at WTO Dispute Settlement Body (DSB) concerning import bans related to sustainability issues have been struck down by the WTO because they were, in fact, mere pretexts for protectionism.
Trade and sustainable development’s amalgamation is inexorable, like Siamese twins. Progress in one area depends upon progress in the other. That’s the reason why an appropriate framework within the WTO system is essential to reach a balance between them. Otherwise, WTO will fail to recognize the fundamental message of sustainable development. And, trade liberalization without adequate sustainable development will lead to heavy deterioration, on a global massive scale.

Ligia Maura Costa. Partner at Ligia Maura Costa, Advocacia, full professor at FGV-EAESP and associated professor at Sciences Po. Paris.