1. 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.

2. 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

3. 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

4. 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

5. 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
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ILO
Environment
References to environmental objectives in:
Preamble of WTO Agreement
GATT Article XX
TBT Article 2.2
“Necessity” to meet policy objective
MEAs

6. 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
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International Competition Network

7. 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.

8. 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 ?

9. 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

10. 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