A report for the Commonwealth Secretariat entitled ‘The right to trade: Rethinking the aid for trade agenda’, by Joseph Stiglitz and Andrew Charlton, has been reviewed in a Commonwealth Secretariat Trade Hot Topics paper by Emily Jones. Stiglitz and Charlton have called for “a right to trade” and “a right to development” to be “enshrined in WTO rules and enforced through its dispute settlement mechanism”. The proposals were made in the context of a critical review of the ‘aid for trade’ experience since 2005 and a perceived loss of faith by developing countries in “the prospects for multilateral liberalisation”, given the unbalanced outcome of the Uruguay Round negotiations, including the failure to address agricultural subsidies.
The proposal for “a right to trade” would seek to address “the trade barriers facing exporters from developing countries”, by granting them the right to “bring an action against an advanced country on the basis that a specific policy materially impedes the development of an identified community in a poor country by restricting their ability to trade”.
The proposal for “a right to development” would seek to address the challenges arising “when developing countries implement multilateral trade rules”, by “[limiting] the applicability of WTO obligations when the enforcement of such obligations would have a significant adverse effect on development”.
Groups of developing countries, non-state actors and a new office of “defender of the right to trade” could all bring actions under the new provisions. LDCs would have full access to the new rights, while other developing countries would enjoy “softer rights”.
These rights would “transcend any existing agreements and apply to all trade-related policies in advanced country members”, although they would need to be “subject to appropriate safeguards”.
Under Stiglitz and Charlton’s proposals, providing for enforcement of these rights via the WTO dispute settlement mechanism would seek to remedy power asymmetries in global trade negotiations, and to fully integrate special and differential treatment into WTO rules. This would be supported by a Global Trade Facility which – in addition to genuine ‘aid for trade’ support – would also assist developing countries in upholding their new “right to trade” and “right to development”. Stiglitz and Charlton propose that the new facility should be housed in UNCTAD.
Concerns have been expressed that the scope of these proposals is too broad and that they require fundamental changes to WTO rules by moving beyond state-to-state relations. Questions have also been raised over whether LDCs should be able to assert similar rights in their trade relations with emerging economies.
The Trade Hot Topics analysis argues that “discussion is required about both the desirability and legal feasibility of enshrining a ‘right to trade and a ‘right to development’ through the WTO dispute settlement mechanism.”
Serious questions arise as to whether the Stiglitz and Charlton proposals would ever be able to mobilise consensus in the WTO on such rule changes. Nevertheless, there are a number of connected issues that all appear to warrant further discussion:
- “hardwiring” special and differential treatment into the application of all existing WTO provisions;
- establishing appeals mechanisms to combat the application of non-tariff measures in ways that inhibit developing country exports;
- establishing “the right not to be harmed by the imposition of trade rules”;
From an ACP perspective, throughout 2013 the trade effects of changes in the application of previously agreed SPS and food safety measures have come to the fore, highlighting the importance of the debate around “the right to trade” (see Agritrade articles ‘ Tightening of Citrus Black Spot controls could pose challenges’, 28 April 2013, ‘ New EU maximum residue levels hit Kenyan vegetable exports’, 28 April 2013, ‘ Commercial implications of EU SPS requirements hinder development of sma...’, 4 May 2013).
In an ACP–EU context, these issues are currently purely a matter for bilateral discussions. This leaves the affected ACP countries largely powerless to influence unilaterally determined changes in the implementation of SPS and food safety policy measures, regardless of the underlying scientific evidence for such changes.
Similar issues arise for ACP countries with regard to “the right to development”, as a number of the contentious issues in the interim EPA negotiations hinge on an insistence that the use of long-established agricultural trade policy tools be abandoned (e.g. import licensing to manage national markets, in a context of profound imbalances in economic power within ACP regions).
In this context, moves towards the creation of an international arbitration system on “the right to trade” and “the right to development” can be seen as particularly relevant to ACP countries.