Renovating the International Architecture for Economic Growth and Social Justice
Steve Charnovitz
6 August 2020
One of the enduring lessons of the past 150 years is the value added from international rules and transnational mimesis. National (and subnational) governments are the primary providers of public regulation and public goods, but the salience of cross-border interdependence invites the quest for better outcomes through international cooperation.
World trade has driven economic growth for centuries and has long benefited from economic treaties between countries seeking to establish policy predictability and the rule of law. The apotheosis of these developments was the establishment of the World Trade Organization (WTO) in 1995. But today, the WTO’s failures have run far ahead of its successes. Looking at the three branches of the WTO, the legislative Ministerial Conference failed to meet as legally required in 2019 and so far in 2020 (not even a Zoom meeting); the executive branch will soon lose its Director General; and the judicial branch has been wrecked by the U.S. assault on the Appellate Body. Among the ironies in this disaster is that 25 years ago, the institutions of the WTO were widely viewed as a good model for other regimes to emulate.
Other international organizations are equally or more important than the WTO to the goals of sustaining world economic growth. The global Covid-19 crisis has illuminated the need for much better international pandemic law and much more effective international health institutions. At present, we lack the nimble and robust global networks required to secure early warnings of pandemics and to act rapidly to control them. In my 10 May 2020 paper on “The Field of International Pandemic Law” (https://ielp.worldtradelaw.net/2020/05/the-field-of-international-pandemic-law.html), I expressed doubt that the World Health Organization (WHO) was up to that vital task. So, although I deplore President Trump’s action to seek to pull the US out of the WHO, a reversal of that threat by the incoming US Administration is just a sideshow to advancing the WHO reforms that are needed. I would also note that the lack of preparedness for the pandemic was a deficiency in many international institutions. For example, if one considers the 2015 United National Sustainable Development Goals (SDGs) to be a Baedeker for good governance, there will be a disappointment in perusing Goal #3 (“Good Health and Well-Being”) to look for any awareness that the planet was facing a looming pandemic. Yes, epidemics and vaccines are mentioned; yet they are not given any greater salience than local problems like “road traffic accidents”, “family planning”, and the “harmful use of alcohol.”
Well-functioning labor markets and job creation should be a basic goal for national government, but also a goal for international governance. I’ve been promoting that verity in my writings for 35 years, but I claim no credit for the insight. That’s because the insight comes from Article 2 of the Charter for the International Trade Organization (1948) which states: “The Members recognize that the avoidance of unemployment or underemployment, through theachievement and maintenance in each country of useful employment opportunities for those able and willing to work … is not of domestic concern alone, but is also a necessary condition for the achievement” of “the expansion of international trade, and thus for the well-being of all other countries.” Unfortunately, the WTO has not shown much interest in domestic job creation and employment as a means for achieving trade liberalization or as an end in itself.
Environmental quality is also an important factor in sustaining economic growth and human prosperity. Many international environment regimes exist, but some of them lack the regulatory architecture needed to achieve their goals. The most obvious example of such inadequacy is the climate regime which lacks the rules, reciprocity, and funding mechanisms needed. I deplore President Trump’s threat to pull the US out of the Paris Agreement. But even more so than with the WHO, merely keeping the United States in will not solve the pathologies of the Paris Agreement which are preventing it from reversing the global warming that threatens the human condition.
Promoting economic growth is necessary, but not sufficient. We also need to improve the international architecture for social justice. Although “fighting poverty” has long been a mantra of the World Bank and “No Poverty” is the Goal #1 of the UN SDGs, the international agency with the longest track record in pursuing social justice is the International Labour Organization (ILO) which was set up in 1919 with precisely that objective in mind. The ILO’s architecture was to be a rulemaking organization that would foster government and private sector agreement on minimum international labor standards and worker rights and then provide institutional help to domestic agencies to achieve those commitments. A century of practice has not uncovered a better path for international progress. For the ILO, social justice was to be achieved not just through a well-regulated labor market. Rather, the ILO also championed the empowerment of workers to use labor unions to negotiate with employers.
When I was a US government negotiator for international labor standards in the 1980s, my biggest embarrassment as a US official was that the United States had refused to ratify the most important ILO treaty, namely, the Convention on Freedom of Association and the Protection of the Right to Organise (No. 87). This Convention has been before the US Senate since 1949, and yet the Senate Committee on Foreign Relations has never found the time even to hold a hearing on this important treaty. To be sure, the absence of the United States as one of the 155 ratifying countries has not in itself diminished worker rights in the United States. But worker rights in the United States currently are not adequately protected, and sometimes not protected even up to ILO standards.
Governments should pursue domestic social justice primarily by removing barriers and assuring equal opportunity in law. But there is also a moral imperative for high-income countries to provide more effective development assistance to low-income countries. The international architecture for promoting investment in developing countries needs new thinking and can benefit from the latest communication technologies and financing techniques.
In summary, the Covid-19 crisis is inducing massive change in our economies and societies and these shock waves will continue to destabilize the architecture of international economic and social cooperation. Once the virus is defeated by new medicines and public health measures, governments and civic society should seize opportunities to strengthen our vital international institutions so as to achieve a “global green new deal” for the peoples of the world.
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