Does WTO need to be reformed? Professor Weiss sheds some light on the matter.

In this essay, Professor Weiss examines the role of Non-Trade Concerns in WTO governance of globalization and the managing by WTO of important social issues, such as labor and environmental standards. Therefore, he assesses the feasibility of reforms regarding the WTO dispute settlement mechanisms. In this a common claim that WTO has become an embodiment of globalization. Its unique two-tier dispute settlement system constitutes a central element in providing security and predictability to the multilateral trading system and is essential to the effective functioning of the WTO and the maintenance of the rule of law and of a proper balance between the rights and obligations of Members. Furthermore, it might also be utilized for the adjudication of issues directly affecting peoples’ lives. These issues reflect a broad range of non-trade concerns including environmental protection and global warming (climate change), biodiversity, food security, development policies, human rights, labour standards, health, medicines, animal welfare, eco-labelling, biotech products, distribution of resources, economic prosperity, social welfare, ethical issues, and even security. Governments called upon to address these non-trade concerns may do so by using different types of measures, most prominently measures concerning processes and production methods of products. It is not surprising that pressure is mounting to use the services of the WTO for the governance of globalization. This would involve the negotiation of regulatory standards, as well as their coordination, administration, and enforcement – in short, the construction of some kind of ‘global public policy’ in such areas as the management of trade-related environmental standards, social justice in a globalized economy, investment and competition policy and electronic commerce. The relationship between labor standards and capital is, then, specifically addressed. Given the centrality of low labor costs to the workings of comparative advantage, one could argue that labor standards are more relevant to trade than intellectual property rights which the United States had successfully brought into the world trade regime through the TRIPS Agreement. For instance, developing countries might in the future campaign for an accommodation of their comparative advantage in labor services. Regarding environmental protection, governments are expected to assume some kind of scientific-managerial role pursuant to an ideologically neutral scientific logic of intervention to protect an emerging new balance between ecological interdependence and political independence, between market and communitarian or collective views, and between environmental concerns and economic development and trade objectives. However, already in the GATT debates on the complex interface between trade and environmental policies exposed profound differences of opinion. These, however, were to some extent patched up rather than reconciled by the insertion into the preamble to the Agreement Establishing the World Trade Organization of the evocative concept of ‘sustainable development’. That principle requires the ‘rule of trade’ to be applied in a manner that respects the principle of sustainable development and protects and preserves the environment, allowing members to pursue valid conservation goals. As a conclusion, it is argued that the WTO dispute settlement system is the most important innovative element of the WTO as the principal organization of global economic governance. It is pointed out that in order to balance and thereby integrate trade-related values, it would be necessary for the system to be freed from its traditional and self-imposed adjudicative isolation from relevant practice in international law. Overall the question whether the WTO is ‘reformable’ can be answered affirmatively, if based on a broad understanding of ‘reform’, including evolutionary reform, encompassing institutional, procedural and adjudicative adjustments to practice.