Second, trade rules at best complicate and at worst prevent government use of economic sanctions to penalize governments that condone genocide, practice torture, or commit other human rights violations. As explained in chapter 2, GATT’s Four Pillars command unconditional nondiscrimination in the treatment of imports from other Members. The principal and most effective enforcement tool of many human rights treaties and policies is precisely to discriminate among countries based on their human rights performance, to deny market access to the goods of these countries, or even to prohibit trade with them altogether.14 Trade rules require that WTO Members treat products that share similar physical characteristics and uses alike, even if one product (for example, a blouse) was produced using indentured child labor, while the other was not; or if one product (for example, a tropical hardwood armoire) was produced using unsustainable forestry methods, while the other was not; or if one product (petroleum, for example) was obtained by depriving indigenous peoples of their economic future, while the other was not. These contradictory approaches create important and unnecessary obstacles to just trade: using trade’s power to realize human rights objectives.
Third, and we believe most tellingly, human rights proponents complain that trade rules, by distancing themselves from responsibility for improving the human rights record, fail to take advantage of trade’s vast power by making compliance with human rights law a condition of participation in trade’s bounty. Beginning at the regional economic integration level and ultimately spreading to global rules of the WTO, trade instruments must, both from a legal and a policy perspective, command purposeful integration of trade law with human rights law. Globalization thus is faulted both for making the human rights situation worse through its activities and for not improving the human rights record through its ubiquitous presence and enormous power.
For example, human rights activists and workers in the North often hold the view that the developing economies of Latin America, in order to attract investment, engage in a “race to the bottom.” That is, they sacrifice human rights standards to provide lower costs for foreign investors.15 Most economic studies of why foreign investors choose certain countries for their operations discount these fears, noting that environmental costs, and even wage rates, cohabit a long list of factors that contribute to a corporate decision to invest. Nonetheless, the fear of a race to the bottom is so widespread that it affects the motivation of a developing country in decisions to protect the environment and to improve the conditions of workers. Thus, it is not surprising that the most fervent reaction against the Washington Consensus—that philosophical perspective that promotes industrialization and free trade by the private sector along with the reduction of government spending and regulation—has come from environmental and labor activists.16
There is an obverse to this coin. As the World Bank study notes, globalization is a powerful force for reducing poverty. It literally creates money. As Clive Crook has written in the Economist, “Globalisation, far from being the greatest cause of poverty, is its only feasible cure.”17 In developing countries, trade creates jobs that did not previously exist and that raise living standards. For example, during the last three decades of the 20th century, while the world’s population was increasing by two-thirds, the percentage of that population living on less than an adjusted two dollars per day decreased from 44 percent to 8 percent.18 Whether an econometric formula accurately can measure poverty is widely contested, however. The World Bank itself recognizes that poverty is a complex problem of which financial deprivation is but one component (see chapter 12 on poverty).
Trade also increases company profits, which theoetically allows lowering of prices, in turn raising real incomes of all consumers, rich or poor. Trade leads to technological innovation, which allows industries in developing countries to produce more efficiently, enabling people in these nations to buy more goods and services with less income. With increased living standards, governments and civil society can afford to focus on more than preventing starvation, which can lead to greater worker rights, improved health, broader freedom of association, and increases in other human rights.
To be sure, while trade’s compelling economic growth indeed has driven absolute poverty downward, some areas of the globe have longer resisted trade’s loud knock of opportunity, with unhappy results. For example, while Asia’s poor dropped dramatically as India, China, Japan, and others opened their trade doors, Africa’s poverty levels increased, with the result that, while thirty years ago 11 percent of the world’s poor lived in Africa and 76 percent in Asia, now Africa hosts 66 percent of the poor and Asia’s share has declined to 15 percent.19 Latin America, breaking loose from protectionist trade policies that lasted into the 1990s, has also seen sizeable decreases in poverty levels, although none as dramatic as in most Asian nations.20
Other data show a correlation between an increase in trade followed by a decrease in human rights concerns. Perversely, data exist that support the opposite conclusion. For example, some studies indicate that there is an increase in indentured child labor in some countries with fast-rising trade numbers. Other data reveal a decrease in food security in developing nations that keyed agricultural production to exportable commodities, and then suffered from a drop in world prices combined with competition from heavily subsidized imports. There is also evidence of the splitting of families by Mexican women forced to travel to squalid shantytowns adjoining the border assembly-for-export industry (maquiladoras) that mushroomed to meet the demand created by Mexico’s signing of the NAFTA. What we cannot do, and herein lies a principal premise of the trade and human rights debate, is demonstrate purposeful correlation, much less integration or even coordination, between human rights policies and international trade policies.
Professor Powell elsewhere has discussed the “splendid isolation”21 that characterized the parallel growth of modern human rights and global trade law beginning in the mid-1940s.22 The same atrocities of the Second World War inspired rapid evolution of both legal disciplines. The UN’s Universal Declaration of Human Rights and the World Trade Organization’s General Agreement on Tariffs and Trade, each of which continues as the key governing document in its field, celebrated their fiftieth anniversaries in the same year at the end of the last century. Each document also has inspired an unending series of negotiations leading to increasingly broader jurisdictional reach, a complex web of regional and global institutions, and ever-tighter limitations on state action.
Yet, as their subject matter increasingly overlapped and their dependency progressively tightened, treaties in these two fundamental fields of human endeavor gave, with rare exception, no hint of the existence of the other and even less do they show a coordinated effort by the states negotiating them to make the world not only a richer, but a better place.
The exceptions are protection of the environment, identified early on as directly intersecting with trade rules, and promotion of public health. Ironically, the result of recognition in these two phases of the trade and human rights intersection has been far from euphoric. In fact, the episodic, often pro forma mention of the environment in trade treaties and of trade in multilateral environmental agreements has led to direct conflict in treaty terms, as compared with simple indifference to other human rights areas. For example, as we discuss in section 7.5, if a WTO Member bans imports of genetically modified soybeans for health reasons based on incomplete evidence, its action likely would be consistent with the Convention on Biological Diversity’s Protocol on Biosafety, but likely would be inconsistent with the WTO’s Agreement on Sanitary and Phytosanitary Measures.
Origin of This Volume
Our inspiration and felt necessity for this volume proceeds from our research and student interactions while separately teaching law courses on human rights and on international trade and, especially, from our co-teaching over the years of courses that explore the intersection of these disciplines. While we hope that it will be of interest to any student of this intriguing intersection, the book is designed in particular to serve as the text for a trade and human rights seminar or course that explores the premises of the trade and human rights debate from the perspectives both of free trade advocates and of human rights activists, with the purpose of imparting a better understanding of the rationales for both systems of law and the ways that each is—or