The World Trade Organization’s Fuzzy Borders” Dealing With Internal Measures in the Multilateral Trading System: Why, How and With What Consequences? Marion Jansen (ILO) and Patrick Low (WTO) Presentation at “Trade-And? The World Trade Organization’s Fuzzy Borders” a Graduate Institute and NCCR Conference Geneva, February 5, 2009.

Dealing with Internal Measures at the WTO Reasons for linking internal measures and policies to trade negotiations … we suggest a variety of motives; no over-arching theory for normative analysis available. Internal policies in WTO law … different approaches have been used Factors that have affected agenda-setting in the past … some motives appear to have found more political support than others Decision-making options in the WTO … suggesting a way forward for discussing internal measures within the WTO

Motives for linking internal measures to trade negotiations Contestability of markets Anti-circumvention Public policy with a dual objective ( … regulatory chill, race to the bottom arguments) Engendering new competitive opportunities Reduce trade costs Shaping national markets in the face of other distortions

Motives for linking internal measures to trade negotiations Contestability of markets Guaranteeing the effectiveness of domestic policies Taking advantage of cross issue linkages in negotiations

Internal measures in WTO law Type of agreement (within WTO legal texts) Alternative approaches to WTO consistency Plurilateral or multilateral counterpart to WTO TBT Multilateral International standards ISO and other international bodies SPS Codex, OIE and IPPC TRIPS TRIPS sets the multilaterally agreed “standards” WIPO TRIMS A (non-exhaustive) list of WTO inconsistent investment measures is contained in agreement. Bilateral Investment Agreements (around 3000) Labour --- ILO Environment References to environmental objectives in: Preamble of WTO Agreement GATT Article XX TBT Article 2.2 “Necessity” to meet policy objective MEAs

Internal measures in WTO law Type of agreement (within WTO legal texts) Alternative approaches to WTO consistency Plurilateral or multilateral counterpart to WTO Government Procurement Plurilateral Treatment of foreign suppliers, services or products should not be “less favourable” than the treatment of domestic counterparts. Subsidies Multilateral “specificity” of subsidy Services Multilateral (with the possibility make commitments for individual sectors and modes) GATS Article VI GATS Article XVI: restrictions on domestic market structure. Reference Paper on Telecommunication Decision on Disciplines on Domestic Regulation in the Accountancy Sector Competition Policy --- International Competition Network

Factors that have affected agenda-setting the past “Policy effectiveness” arguments have not been very successful; There is evidence of an ambiguous attitude towards harmonization; Export interests and the anti-circumvention argument appear to have been rather successful; Enforcement considerations appear to have played a role.

Decision making and agenda formation in the WTO Varied interests, needs and priorities Complex negotiations Transactions costs and large numbers Agenda size and trade-offs For WTO rule-making (not trade liberalization negotiations) Consensus/veto ? Critical Mass ?

Decision making and agenda formation in the WTO Maintaining multilateral integrity with critical mass Critical mass defines itself Three decision points: Launching a negotiation Drawing up the norms Adopting the results Critical mass and MFN Critical mass, protecting interests and managing free-riding

Conclusions Motives for affecting agenda setting are multiple and complex Options for institutional design are numerous Forum selection Facilitating agreement through a re-balancing of rights and obligations