How to Reach a Balance between Trade and Sustainable Development?
Trade considerations are increasingly important in shaping economic
policies in all countries, developed as well as developing. A multilateral
trading system that supports sustainable development is more important than
ever, in order to assist governments to open their economies to global trade. Trade
and sustainable development’s amalgamation is inexorable. Progress in one area
depends upon progress in the other. A stable and predictable system for
international trade is valuable for promoting technological innovation and investments
– which are fundamental for sustainable development. In fact, the concept of
sustainable development includes social justice, equal income distribution,
full employment, safe and healthy working environments, environmental
protection and socio-economic welfare. One can argue that the most relevant
principles related to sustainable development are embedded in the World Trade
Organization (WTO) preamble. 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. WTO
recognizes that open trade is not an end in itself. It is tied to crucially
important human values and welfare goals captured in the WTO’s founding
document, the Marrakesh
Agreement. Despite the fact that sustainable
development issues are part of the WTO’s mandate, most of the world’s
development indicators have been steadily deteriorating in the recent past and
at the global level and do not truly take into account sustainable development.
Trade liberalization without adequate sustainable development will lead to
heavy deterioration, on a global massive scale.
The current methods of valuing global economies, such as the one based
on the Gross Domestic Product (GDP), do not take into consideration many
negative effects of economic growth related to trade liberalization, like
pollution, climate change or reduction in natural resources, among others. After
Rio + 20, it seems clear that it is important in the long run a strong
commitment from the international community to sustainable development. The
recent experience has shown that GDP economic growth does not make economies
more resilient to economic shocks. On the contrary, it has made economies more
vulnerable. In response to this demand, the InclusiveWealth Report 2012 (IWR) presents an
alternative method based in some factors such as a country’s natural, human,
and manufactured capital to its overall value. The benefits of committing to
sustainability concerns are crystal and clear. The challenge for the
international community is to redefine how, and in particular how soon. Will
WTO members be able to respond to this challenge? Is WTO the most appropriate
forum to enforce sustainable development issues based for instance on IWR
guidance basis?
In the Marrakesh Agreement WTO 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. In this regard, the fundamental
principles of WTO agreements offer a framework for ensuring predictability and
fair implementation of measures that may address sustainability concerns at the
international trade level. WTO seeks to achieve a crucial balance: on the one
hand, it supports the right of members to take measures to advance legitimate
goals related to sustainable development; and, on the other hand, it ensures
such measures are not disguised protectionism.
It is true that the extent and nature of the incorporation of
sustainable development issues into WTO is still highly contentious among WTO
members. There is a major disagreement among WTO members 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 actually enforced for trade liberalization
purposes. At this stake, some fear that WTO may demand the advancement of
sustainable development norms that not all members may be able to fully
implement. Others argue that WTO preamble only obstructs interpretation of WTO
rights and obligations from impairing achievement of the highest goals
that major international legal instruments claim to promote, namely sustainable
development. No one can deny that many of the future challenges facing the WTO
system are related to sustainable development issues and the IWR may be a very
useful tool. Such issues are likely to include the relationship between
environmental challenges such as global warming and trade, and trade and
energy, raising living standards, ensuring full employment, using the world’s
resources sustainably, among others.
The WTO’s ability to reconcile multilateral trade liberalization with
sustainable development is a central concern to the institution’s legitimacy
and is, therefore, vital to further advancing free trade at the global level. WTO
members have to persuade a skeptical public that trade liberalization can
contribute to sustainable development improvement. That’s the reason why an
appropriate legal framework within the WTO system is essential to reach a
balance between trade and sustainable development. 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. Otherwise, WTO will
fail to recognize the fundamental message of sustainable development. 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 General Agreement on Tariffs
and Trade (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 disguised protectionism.
An analysis of sustainable development issues inside the WTO dispute system
shows that from all disputes submitted to the DSB only ten per cent of the
disputes were in fact concerned with sustainable development issues (Costa, 2013,
p. 344).
Following from that, it is critical that members recognize the current
limitations of the WTO legal framework and reach out towards a common agenda on
trade and sustainability having the IWR as a valuable reference to advance
further developments on this matter on a more concrete way. One can generally
say that WTO enforcement on sustainable development is a subject matter of
tense controversies among members. However, sustainable development is here to
stay. Thus, how can DSB de facto
enforce and pronounce itself against the use of sustainable development rules
as a disguised protectionism? How can DSB recognize whether the proposed trade
measure is truly for the purpose of safeguarding sustainable development
issues? In this context, the realistic option for lessening the chilling effect
of disguised sustainable related trade measures is to regulate their
applicability by means of a Ministerial statement. And the IWR is a valuable
reference to identify whether country’s natural, human, and manufactured
capital actually supports the trade measure or whether it shows that the
measure is simply a disguised protectionism. A Ministerial statement guideline
based on IWR will provide the DSB with specific rules on the interpretation of the
WTO system towards more certainty on sustainable development matters.
References
Costa, L.M. OMC e Direito
internacional do desenvolvimento sustentável. São Paulo: Quartier Latin,
2013.
Ligia Maura Costa. Professora
Titular na FGV-EAESP. Advogada em São Paulo.
