Article: Transparency and Public Participation in the WTO: A Report Card on WTO Transparency Mechanisms, 4(1) Trade, L. & Dev. 19 (2012) [available here]
Authors: Gabrielle Marceau & Mikella Hurley
Comment by Robert Wolfe
This paper is an outstanding description and analysis of the openness of the WTO dispute settlement system to NGOs and the public. Anyone interested in transparency would benefit from a careful reading of its arguments. But the title is misleading, because the paper has much less to say about the WTO in general than it does about adjudication, and little at all to say about the broader policy purposes of transparency. Since I learned a great deal from what they do say allowing outsiders to observe decision-making and to contribute ideas, I want to focus this comment on what they do not tell us about transparency as a policy tool, not merely a right of citizens.
The authors intend to examine the old myth of the WTO dispute settlement system as an inaccessible and undemocratic “star-chamber”, with comparisons to other adjudicatory fora in the realm of international economic law. They are right to stress the comparative openness of the WTO disputes process, and its accessibility to NGOs, but the comparison looks different if the notion of “international economic law” is extended to multilateral environmental agreements (MEAs). Formal third party adjudication is technically available in MEAs, but never used. Without transparency to ensure compliance with legal obligations, therefore, these regimes would not work.
Take the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). Parties may take unilateral action under Article XIV by refusing to accept shipments of all CITES specimens from a country found in persistent non-compliance with reporting and other requirements if that country has not demonstrated to the Standing Committee that it has adopted all necessary measures to adequately implement the Convention. Trade sanctions under this provision have been successfully implemented in at least 40 well-documented cases since 1985. This procedure is open to NGOs, who participate in CITES as accredited observers at plenary sessions and committee meetings. CITES mobilizes a community with a stake in wildlife trade – from safari hunters to animal rights activists. NGOs gather information CITES transparency mechanisms may miss. The best example is TRAFFIC (Trade Records Analysis of Flora and Fauna in Commerce), the joint wildlife trade-monitoring programme of the World Wildlife Fund and the World Conservation Union (IUCN). The WTO has indeed learned to be more engaged with civil society, but it could make much more effective use of such third party information. In the case of crisis monitoring, for example, the Secretariat made use of data published by the Global Trade Alert, but did not have any kind of formal or systematic engagement with this NGO.
Transparency is often seen as part of a basic right of access to government information, a principle that has become more important especially in OECD countries over the last 30 years, notably with respect to environmental governance. This trend is exemplified in Europe in the 1998 Aarhus Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters. In the trading system, however, the objective is neither to enhance the capacity of citizens nor to promote domestic objectives that can be achieved without the need for international obligations.
The WTO Glossary defines transparency as the “Degree to which trade policies and practices, and the process by which they are established, are open and predictable.” Such openness and predictability about both substance and process is needed in Geneva and in capitals alike. This definition refers to a number of inter-related actions, including how: a rule or a policy is developed domestically; the rule is enforced or a policy is implemented; the rule is published; the other Members of the WTO are notified of the new rule or a policy action; a notification is discussed in Geneva; and the results of the Geneva process are published.
The ultimate objective is reducing information asymmetries among governments, and between the State, economic actors, and citizens. Under conditions of “imperfect information”, everybody would be better off if partners reduce their asymmetrical information about each other. One of the questions in any international legal regime is the extent to which differing national laws are functionally similar, or recognizably similar. Good faith implementation of international obligations need not and does not result in identical national law. The purpose of transparency mechanisms in reducing information asymmetry is thus to allow verification by other Members that national law, policy, and implementation achieve the intended objective. Citizens and economic actors need this information as much as governments, so the WTO needs transparency for outsiders as well as among its Members, and not just about decision-making.
Transparency can be categorized for convenience as first, second and third generation policies, a typology developed to think about the evolution of transparency policies in advanced economies. The first generation is the emergence of open government or “right to know” policies, the second is regulation by disclosure, and the third is e-government. When adapted for analysis of the WTO, first generation refers to the original GATT policies from 1947 as elaborated over the years, while second generation refers to the monitoring and surveillance mechanisms introduced with the conclusion of the Tokyo Round negotiations in 1979, and enhanced in the Uruguay Round negotiations that led to the creation of the WTO in 1995. Third generation refers both to managing an enlarged WTO with 157 Members, and to the greater openness to the public, as discussed by Marceau and Hurley.
A trade agreement is first a set of rules that should govern policy in a given domain. If nobody knows what the policy is, however, the agreement cannot work. Simple publication of tariff schedules, though still an essential form of transparency, is no longer sufficient for first generation or right to know transparency. Now trading partners and economic actors need to have information about a wide range of domestic policies that have the capacity to affect the flow of transactions across borders, domestic policies that are increasingly subject to WTO obligations. An ad valorem tariff imposed at the border is transparent in itself, and can readily be compared to the rate bound in a Member’s published Schedules, but trading partners cannot see what is going on “behind the border” without help. Domestic standards and regulations, notably those related to product safety and animal health, are hard to observe, which makes notification essential.
In the WTO Glossary, a “notification” is defined as “a transparency obligation requiring member governments to report trade measures to the relevant WTO body if the measures might have an effect on other Members.” Some WTO notifications are linked to the possibility of review by a relevant WTO body before or after the measure takes effect. Second generation transparency at the WTO refers, therefore, to monitoring and surveillance mechanisms. Monitoring means any activity where Members review each other’s implementation of the Agreements. Surveillance might focus on checking whether governments have created national legislation that incorporates an agreement into law; or on whether those laws are adequately enforced.
The monitoring and surveillance mechanism that might have the greatest potential in WTO is now known as the “specific trade concerns” (STC) procedure. While many agreements encourage a process where Members may engage in ad hoc consultations, the STC process has evolved the most in the SPS and TBT committees. Questions of the sort that later came to be called STCs were raised in their first meetings in 1995. The questions and answers increase the transparency of the system for everyone because the Secretariat provides detailed information on every STC in cumulative summary reports that are revised annually. These reports are therefore an excellent source of information on standards and regulatory issues. Knowing whether the process leads to a resolution of issues is not straightforward, however, since Members are reluctant to report back to the committee when they have reached a bilateral accommodation.
Third generation transparency is represented at WTO by greater attention to what is done with the information available. Information is aggregated in new ways, and made more readily available. The challenge is to enable better policymaking in capitals, engaging both economic actors and citizens. Encouraged by environmental NGOs, meetings of the Committee on Trade and the Environment were the first to use the web to make the results of the meetings quickly accessible to the public. Nevertheless, while WTO Members are committed to making information available in Geneva, but that information is largely a by-product of information otherwise generated to serve governments. Only some information is published with NGOs, economic actors, or citizens in mind. For example, the Trade Policy Review reports are written for Members, and in a specialist language, but the summary observations are written for a general audience. The crisis monitoring reports are explicitly aimed at Member governments, but the Secretariat has been working hard to report the results on the web in a way that makes complex data readily accessible to an interested but not necessarily professional audience. Many of the reports on committee meetings are also increasingly informative. All of this information provides the basis for the relevant discussion, which may be more anodyne, in the WTO Annual Report, which is aimed at the interested public.
Sunshine may well be the best disinfectant, as Brandeis wrote, but too much sunlight can cause cancer. Transparency might hurt if it encourages posturing by negotiators and politicians. If constituents perceive a negotiation as purely distributive, they will be critical of a negotiator who pursues the possibility of an integrative outcome. The transparency that modern governance demands undermines the privacy essential for negotiations. The tough questions are always transparency for who, and to what end? The assumption is that some interested public will respond to information in a way that changes a targeted actor’s behaviour. If the obstacles in a given market are understood, economic actors can make alternative decisions, which might induce the government to change policy to maintain the benefits of investment. Such illumination might also generate domestic political pressure for change. In this way, transparency is the foundation for the trading system as a living thing not just a legal text stored in a Geneva filing cabinet.
