Globaphiles v Globaphobes
Last Sunday, more than 50,000 people demonstrated in the streets of Nontes, the capital of Newland, against economic globalisation, free trade and the Government’s plan to join the World Trade Organisation (WTO). The Republic of Newland is a developing, lower middle income country, with a population of 30 million people. It has a booming, exportoriented toy manufacturing industry and an up-and-coming steel industry. Many of its other industries, however, are unable to compete with foreign goods or services. The demonstration was organised by the Newland Coalition for a Better World (NCBW), representing Newland’s labour unions and its main environmental, consumer and human rights organisations. When small groups of radicals, led by a moustached farmer, attacked and destroyed a McJohn’s restaurant along the route, the police intervened to disperse the demonstrators with teargas. Three hours of violent clashes between the police and a group of about 500 young demonstrators ensued, leaving several people wounded. At an emergency cabinet meeting called on Sunday evening, the Prime Minister announced that he will invite the chairperson of the NCBW to a public debate on economic globalisation, international trade and the Government’s plan to join the WTO. On Friday, the chairman accepted the challenge. The Chairman of the of the NCBW is a professor of constitutional law. The debate is to be broadcast live on Tuesday or Wednesday afternoon. You have been working with the Chairman of the NCBW for a number of years and from the NCBW perspective he is likely to question why it would be in the interest of Newland to ‘squander its sovereignty’ and accept a host of new international obligations. The NCBW is likely to argue inter alia that the WTO fails to consider the needs to developing countries, that the core WTO rules and disciplines are about opening foreign markets for the benefit of multinationals, the EU and the USA. You know that some issues and questions are of particular concern to the professor and so you may wish to consider the following, as it is likely that the government will be prepped to respond:
• Whether the WTO Agreement will prevail over Newland’s Constitution and whether WTO law will have, or should have, direct effect in Newland’s courts
• The full impact of WTO membership
• What is the traditional notion of state sovereignty? Why is globalisation forcing us to rethink this concept?
The process of economic globalization can be described as the defining feature of today’s world and it is a process in which high level of international trade and foreign direct investment are involved. In the present assignment, a debate is going to be held between the Prime Minister of New Zealand and the chairman of Newland Coalition for a Better World that represents the labor unions of Newland and also the human rights organizations as well as the consumer and environmental organizations of the country. Some of the issues that are likely to be debated include the fact if the individual agreement will prevail over the constitution of Newland and similarly if the WTO law will have any direct impact on the courts of the land. Similarly the impact of taking WTO membership is also likely to be discussed as well as the notion of state sovereignty and the impact of globalization on this notion.
For example, according to an estimate by the World Bank, by opening all the trade barriers across the world, the global income can increase by US $2.8 trillion and in this way, nearly 320 million people can be saved from poverty. However, for the purpose of realizing this opportunity, it is important that economic globalization is regulated and managed at the international level. If it is not done so, it is likely that the economic globalization may prove to be a curse instead of being a blessing to the humankind and in such a case, it may aggravate economic inequality, environmental degradation (Bacchetta and Jansen, 2003). At present the law of WTO can be considered as the most ambitious effort for regulating and managing international trade.
Economic Globalization: The term economic globalization is frequently used by politicians, officials of the government, trade unionists, environmentalists, Third World activists, lawyers and economists. The term globalization and particularly ‘economic globalization’ has been used by different people to describe the defining feature of the world after the Cold War. However, it is important to know the exact meaning of the term, economic globalization. For example, the concept of globalization has been described as the “closer integration of these nations and people of the world which has been achieved by significant reduction of cost of transportation and communication as well as by the breaking down of the artificial barriers that were present in the flow of goods, services and capital and to some extent, the movement of people across borders (Stiglitz, 2002).
In the same way, economic globalization can also be defined as the integration of markets, technologies and nation-states to an extent that were not seen before. It is a, it allows the individuals, corporations and the nations to reach around the world, faster, farther and cheaper as compared to before (Friedman, 2000). It also needs to be noted in this regard that it is a multifaceted phenomenon and still a lot needs to be done to understand economic globalization completely. However in essence, economic globalization can be described as a gradual integration of the economies of different countries into a borderless, global economy. The economic globalization includes free international trade and also unrestricted foreign direct investment. The impact of economic globalization can be seen on all the people of the world and it touches different aspects of the daily lives of the people. For example, economic globalization has an impact on the jobs of the people, their health, their education, food and also on their leisure time. Economic globalization also has an impact on the price; people have to pay for the daily commodities or health services.
Although economic globalization is generally perceived as a new phenomenon, however it needs to be noted that the present-day global economic integration is not unprecedented. Much before the First World War, there was significant flow of goods and capital across the borders of different countries and similarly the flow of people during these times was even much more than now. This was the period when the loading of trade barriers supported globalization and also the significant reductions that took place in the cost of transport as a result of the technological innovations like the introduction of steamships and railways. At the same time, it also needs to be noted that there is a clear trend present diverse globalization however the extent of global economic integration in today’s world can be exaggerated. It is believed that international trade should generally force the domestic, high-cost producers to decrease the prices of their products and similarly it should bring the price of products and services from different countries closer. However, there is still a significant difference present in the prices of products and services. For example, even in case of the European Union, there is a difference in prices between different countries of EU. Although, partly this difference can be attributed to the difference that is present in cost of passport, taxes and the efficiency of distribution networks, however subtle difference is also present, at least outside the European Union, as a result of the continuous presence of significant trade barriers. Moreover, while it is possible for goods and services and capital to move freely across borders but, still there are several restrictions placed on the free movement of workers.
Regarding the regarding the relationship that exists between the WTO law and national law, there are two aspects that need to be examined. The first aspect is related with the place of national law in the WTO law and the second issue deals with the place of WTO law in the national judicial system. Regarding the place of the national of a country in WTO law, it has been provided by the WTO agreement in Article XVI:4 that it shall be ensured by each member state that its national laws are in conformity with the obligations of such a country as provided in the annexed Agreements. In this way, a general rule of international law that has also been mentioned in article 27 of the Vienna Convention according to which, the provisions of its internal laws cannot be invoked by a party in order to justify the failure of such a party to perform a treaty. For example it was stated by the Appellate Body that the domestic laws of a WTO member cannot be used for excusing such the member state from fulfilling the international obligations of the member (Brazil – Aircraft (Article 21.5 – Canada). However, it needs to be noted in this regard that when it comes to the measures and actions taken by the regional and local governments and authorities, it has been provided by Article XXIV:12 of GATT that reasonable measures shall be taken by each Member in order to make sure that the regional and local authorities and governments within the territory of such a member observe the provisions of this Agreement.
This means that it is the responsibility of the WTO members to enforce the compliance of obligations by regional and local governments that have been prescribed by GATT, 1994 only to the extent that the Members dispose of the necessary constitutional powers for doing so. In this regard it needs to be noted that where securing compliance with the obligations described by GATT is not possible, the provisions dealing with compensation and the suspension of concessions are applicable.
On the other hand, while dealing with the issue as to how the national law should be handled by panels and the Appellate Body, it was stated by the Appellate Body that in case of public international law, the municipal law may be treated by an international tribunal in many ways. For example, the national law can be used as evidence of acts and that the same time; it may also provide evidence regarding State practice. It also needs to be noted that the municipal law may also constitute evidence regarding the compliance or noncompliance of international obligations (India – Patents (US). The position adopted by the Appellate Body in this regard also found support from the ruling given by Permanent Court of International Justice in which it was stated by the Court that “a question may be asked if a difficulty is not created by the fact that the court has to deal with Polish law. However it does not appear to be the case. From the point of view of international law and also the viewpoint of this Court, national laws are considered as merely facts that are capable of expressing the will and constitute the activities of States, in the same way in which the legal decisions and administrative measures do the same. Certainly the Court is not required to interpret the Polish law however, the Court is not prevented from giving a judgment regarding the question if, while applying the law, Poland is acting according to its obligations under the Geneva Convention” (Certain German Interests in Polish Upper Silesia, 1926).
In the same way, regarding the effect of WTO law on the national courts of Newland first of all, it needs to be noted that in case the provision of national law allows different interpretations, such a provision should be interpreted, whenever possible, in a way that avoids any conflict with the law of WTO. In case of many countries, this doctrine of treaty consistent interpretation has been adopted by the courts. For example, the European Court of Justice has also confirmed the doctrine of treaty-consistent interpretation of the national laws regarding the WTO agreements. However there may be a case when it may not be possible to avoid the conflict between a national law and the provisions of WTO law. In this regard, it needs to be noted that if the provisions of WTO law are provided direct effect and can be important for the purpose of challenging the legality of national measures, the enforceability as well as the effectiveness of these measures will be improved significantly as it will allow the member states much less flexibility regarding compliance with these provisions. However, a fierce debate is going on if direct effect should be granted to the provisions of WTO law.
Conclusion:
The legal position in this regard can be summed up as follows. Although, it is the responsibility of each member to fully execute the commitments undertaken by it, however the Members are free to determine the legal means that are considered as appropriate by them for achieving that objective in their domestic legal system (Eeckhout, 1997).
In view of the demonstrations on the streets of the capital of Newland, Nontes, by more than 50,000 people, the government of Newland has asked for a debate between the Prime Minister of Newland and the chairman of NCBW. Therefore, the above-mentioned issues can be raised by the Chairman during the debate
References
1. Bacchetta and M. Jansen, Adjusting to Trade Liberalization: The Role of Policy, Institutions and WTO Disciplines, WTO Special Studies 7 April 2003, 6
2. Stiglitz, Globalization and Its Discontents (Penguin, 2002), 9.
3. Friedman, The Lexus and the Olive Tree: Understanding Globalisation, 2nd edition (First Anchor Books, 2000), 9
4. Eeckhout, ‘The Domestic Legal Status of the WTO Agreements: Interconnecting Legal Systems’, Common Market Law Review, 1997, 53
Case Law
1. Appellate Body Report, Brazil – Aircraft (Article 21.5 – Canada), para 46
2. Appellate Body Report, India – Patents (US), para. 66
3. Certain German Interests in Polish Upper Silesia [1926] PCIJ Rep., Series A, No. 7, 19
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