Document Type

Article

Publication Date

2004

Abstract

In "Global Governance and the WTO," Professor Andrew Guzman has done an impressive job of articulating a vision of the World Trade Organization (WTO) that many international lawyers share. In this vision, the WTO's mission should be expanded beyond its present task of facilitating tariff reductions and preventing covert protectionism. Rather, the WTO should take on substantive authority in a wide variety of non-trade areas, including the environment, labor, human rights, and public health. Unlike many people who share this vision, Guzman takes the time to describe how it might best be accomplished. He advocates specialized WTO departments and periodic "Mega-Rounds" in which members make cross-issue regulatory bargains.

Unless members agreed otherwise, these regulatory bargains would be subject to the WTO's Dispute Settlement Understanding (DSU).

The availability of the dispute settlement system is a major element of Guzman's proposal. Guzman argues that the mechanism could serve as an important credibility-enhancing device that would encourage members to make beneficial cross-issue bargains. While Guzman believes that members should be free to avoid the application of the DSU to their new bargains if they wish, the unavailability of the mechanism as an enforcement device would rob Guzman's proposal of much of its force. In the absence of the DSU, one might as well seek out international fora other than the WTO for the harmonization of global rules.

As its title suggests, Guzman's article is ultimately a call for world government by the WTO. In this necessarily brief response, we describe some of the more important theoretical and practical problems that Guzman's proposal presents. First, in Part II, we address the matter of cross-issue bargaining in the WTO. While cross-issue bargaining can create gains for parties to a contract, substantive regulatory deals may be vehicles for "amoral" wealth transfers among interest groups. Unlike the present WTO, which works to minimize the influence of one particular form of interest group—protectionists—the transformed organization would facilitate agreements that empower special interests.

In Part III, we discuss the potential of the dispute settlement system as a credibility-enhancing device. We demonstrate why the dispute settlement system might actually discourage cross-issue bargains by vesting extraordinary discretion in WTO tribunals. This discretion would entail an intolerable lack of predictability for WTO members, particularly given the sensitivity of the matters involved. We explain why developing countries would be especially chary of signing on to such a regime, and show how extending the dispute settlement system to cover a variety of non-trade issues might upset the sensitive dynamic in which exporters work to assure national compliance with WTO obligations.

Finally, in our conclusion, we briefly address another possible model for the future of the WTO, one that we have previously described at length. Rather than transform itself into a global government—a World Trade, Economic, Environment, Human Rights, Labor, and Public Health Organization—the WTO should stick to its limited but important role: reducing barriers to trade among nations.