Participation for Sustainability in Trade

Sophie Thoyer, Benoît Martimort-Asso

• Publisher: Routledge
• Year: 2017
• Print ISBN:
  9781138357099
• eBook ISBN:
  9781351151863
• Topic: Business
• Subtopic: Management
• Index: Business

Presenting extensive new research, this ground-breaking study addresses the critical dimensions of participatory and democratic processes in the field of trade-sustainability relationships and sustainability assessments of trade rules. The specific issues in trade include social and environmental concerns for which there is a wide disparity of preferences and no economic benchmark. The contributors provide analytical responses to questions of how deliberative processes can adequately close the democratic gap in global governance and how institutional reforms can ensure better access to information, transparency, deliberation and more accountability. The book provides the necessary theoretical background as well as case studies to understand these issues and is suitable for students and academics in international law, international relations and economics.

Chapter 1
Introduction: Participation for Sustainability in Trade

Sophie Thoyer and Benoît Martimort-Asso

The final Declaration of the Hong Kong World Trade Organization (WTO) ministerial conference in December 2005 is presented as a success. Yes, Ministers agreed on a common declaration that ‘put the Round back on track’ in the words of Director-General Pascal Lamy, and this can be named a ‘success’ compared to the failures of the ministerial conferences in Cancun in 2003 and in Seattle in 1999. Delegates were under pressure to find an acceptable way-out for a round which seemed doomed to fail. Their proposals were motivated more by this objective than by genuine efforts towards substantial liberalisation outcomes. The contents of the Declaration confirmed this fear. They are so feeble that their impact is really mitigated. Although WTO members were not ready to fully negotiate the content of the Doha Round in Honk Kong, they clearly demonstrated that the need for a multilateral framework for international trade is shared.

The success, in a very specific context, of the Doha ministerial conference in 2001, when the Development Round was launched, has to be found in fact more outside than inside the WTO dynamics. After the September 11 attacks, nation states needed a symbolic success of international cooperation, especially in Arab countries. Moreover, following the collapse of the Seattle meeting, another failure in Doha could have had a major impact on the trade multilateral regime in a time of abundance of regional and bilateral trade negotiations. The failures of the Seattle and Cancun WTO ministerial conferences and the modest success in Hong Kong in 2005 have confirmed the mounting difficulties in reaching international agreements on trade.

The tensions and disagreements are intense, both on the objectives pursued by liberalizing trade and on the pace at which the process should take place. In the analysis of the dynamics of trade negotiations following the creation of WTO in 1995, three factors are particularly worthy of note.

First, there has been a growing interdependence between trade and social and environmental concerns. Though sustainability questions were already being addressed in the agenda of international negotiations, they emerged during the WTO Seattle meeting in 1999 as a major trade-related issue. Two questions were to become focal points of the trade debate: social and environmental norms, and the management of global risk. These issues have raised some major obstacles to the pursuit of the WTO negotiation process. On the one hand, they are suspected to introduce new biases in trade competition and are therefore challenged vigorously by nations fearing that their market shares might be unfairly reduced by hidden protectionism. On the other hand, were they to be managed within the WTO system, there would be a risk that sustainability development objectives would be reduced to trade liberalization objectives. By highlighting the need to clarify the links between trade rules and multilateral environmental agreements, the WTO debate on environmental norms and on the precautionary principle has brought the exceedingly complex issue of the architecture of the global system of international rules to the fore. The preamble to the 1995 Marrakech Agreement establishing the World Trade Organization recognizes that ‘relations in the field of trade and economic endeavour’ should allow for ‘the optimal use of the world’s resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development’ and the 2001 Doha Declaration reaffirms, in paragraph 6, the commitments of Members to act ‘for the protection of the environment and the promotion of sustainable development’. Yet, the WTO is not an international institution created to promote sustainable development. The relationship between the WTO and multilateral environmental agreements (MEAs) on the one hand, and institutions in charge of social matters such as the International Labour Organization (ILO) and the World Health Organization (WHO) on the other, is not organized in a clear and constructive way. Indeed, the relationship is more often seen as one with impending conflicts, rather than as an area of cooperation and mutual reinforcement.

Second, developing countries have radically changed their negotiation stance: from a fairly passive role, particularly evident in the General Agreement on Tariffs and Trade (GATT), they have adopted a much more proactive bargaining attitude. Although the United Nations Conference on Trade and Development (UNCTAD) has already demonstrated that consistent positions rooted in robust coalitions could help to gain momentum in trade negotiations, it is certainly within the fora of MEAs that developing countries have learnt to position themselves and to claim their due share of bargaining power. Their capacity to edict their preferences and priorities was reinforced by the increasing collaboration between the official delegations of developing countries and NGO activists, although such cooperation was sometimes embedded in ethical conflicts and mutual suspicion. The ‘Sectoral Initiative in Favour of Cotton’, which was presented on 10 June 2003 to the Trade Negotiations Committee by Burkina Faso is a good illustration: when four Sub-Saharan African countries (Benin, Burkina Faso, Chad and Mali), backed up by powerful development NGOs such as Oxfam International¹ and the Institute for Agriculture and Trade Policy (IATP), required, in the name of fair development, that developed countries phase out their subsidies to their cotton sector and pay compensation to traditional cotton exporters, it created upheavals at the WTO and developed countries could not afford to ignore it. Moreover, developed countries have understood that they are not protected from litigation pursued by increasingly determined developing countries. The victory of Brazil in the recent dispute settlement panel (March 2005) on the cotton issue, which ruled that US cotton subsidies violate international trade laws, has reinforced the feeling that the bargaining power in trade talks is changing hands. From a practical (and probably quite cynical point of view), the increased presence of rapidly developing countries – led by China, India, Brazil and South Africa in G20 – in the WTO negotiation process, has certainly contributed to accentuating the difficulties in reaching a trade agreement. The implicit principle of reciprocal trade concessions, which was the driving force of the trade negotiations until 2001, cannot be put into play in the same way with the entry in the bargaining game of these new partners: they want more access to developed countries’ markets (in particular agricultural markets) but they are not offering any interesting trade prospect in exchange for developed countries – which therefore wish to extend trade discussions to new areas (services, intellectual property, environment etc.). Meanwhile, leading negotiating parties such as the European Union and the United States have had to learn that bilateral ‘green room’ negotiations are no longer acceptable. The increased role that developing countries – who represent three-quarters of WTO members – wish to play has created some procedural ‘gaps’ pertaining to the forms that cooperative coalitions might take and the means by which transparency, democracy and trust might be acquired.

Third, there has been a surge in demands by civil society to participate in a negotiation process that remains very much limited to member states. The demand for greater participation is clearly associated with a deep wave of protest against further trade liberalization and globalization. Although disorganized at its early stages, civil society has proved its capacity to coordinate efficiently and its potential to influence the decision-making process. Civil society groups have been particularly dynamic and vindictive on a wide range of issues linked to sustainable development, and have contributed to demonstrating that trade rules could not be designed in isolation of other burning global issues such as poverty, debt, North–South relations, environmental protection, labour rights, human rights and democracy. On these issues, their contributions, either in the form of street demonstrations, or in the (more cooperative) form of position papers and side conferences, have served to enrich the agenda of international negotiation and to enlarge the issues publicly debated.

The Objectives of the Sustra Network

The Sustra² network was launched, following the Doha meeting, in 2001. The overarching objective was to create a network of European social scientists and NGOs, analysing together how trade regulation could be designed or improved to be more supportive of sustainable development objectives. Sustra’s aim has been to contribute to the development of a theoretical framework for analysing the interactions, links and trade-offs between trade rules and social and environmental protection objectives. Another, and equally important, objective of Sustra’s work has been to interpret the needs of civil society and to seek a better understanding of collective preferences at the international level. Sustra has been working as an independent research group, but it has also had exchanges with the European Commission, more specifically with the Cabinet of Trade Commissioner Pascal Lamy, who had emphasized, shortly after the Seattle debacle, the urgent need to ‘ensure that the rules of the game support not only economic growth but also equitable economic development in the emerging economies, the sustainable use of natural resources and the protection of the planet’.

The work of the Sustra network has focused on the definitions of sustainable development and on the fact that it is not a stable concept. Although the term ‘sustainable development’ was used as early as 1972 at the United Nations Conference on the Human Environment in Stockholm, it was not until 1987, in a UN report entitled Our Common Future, that the term was fully defined as development that meets the ‘needs of the present without compromising the ability of future generations to meet their own needs’. The World Bank has also defined sustainability in terms of opportunities for future generations, based on three pillars; economic, social and ecological objectives, which have to be pursued simultaneously over the long term. More precisely, economists have tried to provide a benchmark against which sustainability could be measured, in terms of capital preservation (human-made capital, natural capital, human capital). In 1992, at the Rio Earth Summit, prescriptions for achieving sustainable development were agreed upon in ‘Agenda 21’, which recognized that the ‘integration of environment and development concerns and greater attention to them will lead to the fulfilment of basic needs, improved living standards for all, better protected and managed ecosystems and a safer, more prosperous future’. Since 1992, it is interesting to note that almost all international agreements refer – directly or indirectly – to the sustainable development objective.

However, despite international negotiations and policy prescriptions, there is no consensus on what the principle pillars of sustainable development should be. Different categories of stakeholders, governments, international organizations, businesses and NGOs define it within their own interpretative framework and following their own priorities and preferences. It is therefore difficult to develop a theoretical framework that can assess and measure progress towards sustainable development objectives. In fact, claims for more equity, transparency and civil society participation in the decision-making process are also indirect demands for new forms of social and political relations in which stakeholders can present their understanding of what sustainable development should achieve, and under what conditions it should be implemented. It is an area in which traditional top-down approaches to the public decision lack legitimacy, and for which deliberative processes could help to improve the quality and acceptability of policy making.

The emphasis on more deliberative and participatory approaches to governance has been actually one of the most important changes in international rule making in the last twenty years.

The Increasing Interest of Civil Society for International Issues

Already in the first years of the 1980s, demonstrations in several third world countries had led to accusations against the international Monetary Fund (IMF), and to a lesser extent the G7, for their role and responsibility in creating poverty. At the London meeting in 1984, activists at The Other Economy Summit (TOES) challenged shareholders of the International Monetary Fund (IMF). However, with the end of the Cold War and the imposition of policies based on the ‘Washington Consensus’, the structure of international relations has changed. The G7 (now G9), the IMF, World Bank and the WTO have become prominent actors of what is called ‘liberal globalization’. The different anti-globalization movements were to finally converge in their criticism of the liberal doctrine, in particular the more conservative and authoritarian version, to organize coordinated action for a different model of globalization, less liberal and more sensitive to sustainable development issues. The demands of these groups, though quite diverse, shared a common leitmotif; that of more direct citizen participation in the international rule-making process. In particular, the functioning of international institutions in charge of trade and finance was accused of being opaque, inequitable, non accountable and as such, illegitimate.

The outcry against these institutions led to counter summits being organized during the official ones. The informal civil society meetings (NGOs and trade unions) turned into independent civil society fora, the World Social Forum (WSF) being the most substantial illustration. The participation of individuals is at the heart of the World Social Forum’s success. Indeed, the WSF is a self-described democratic alternative space for dialogue and debate with the aim of proposing alternatives to the current system.

Participatory Approaches in Development and Environmental Issues at the National Level

These claims for more participation in global governance have not emerged spontaneously from a suddenly convergent popular demand for participating in the international decision-making process. They are in fact rooted in the older movement of decentralization and participatory development approaches.

Responding to criticisms and assertions as to the failure of centralized top-down approaches of development projects, the 1970s and early 1980s have witnessed a new emphasis placed on bottom-up ‘people-centred’ development. The increasing recourse by local and national governments, as well as by NGOs and (later) international development agencies, to various forms of participatory approaches were rooted in the expectations that community-based initiatives would help to design more proactive, more innovative and better-adapted responses to the development issue. The justification was also that by taking into account different knowledge, values and preferences, the participatory processes would improve the legitimacy of local policy responses and would create a greater sense of shared responsibility and a greater commitment to implementation. Priority was therefore given to capacity building, participatory action research and people’s empowerment at the local level. At the national and regional levels, emphasis was placed on the subsidiarity principle, in order to bring decision centres closer to the communities concerned.

Beginning in the early 1990s, consultation and participation have also become the keywords of successful environmental decision-making. It was then emphasized that environmental issues are complex, and characterized by multiple conflicting interests, within and between communities, because the environment relates to various aspects of life (leisure, production, consumption, technology), for which people may have very different and often competing preferences. Moreover, the problem of diffuse responsibilities and lack of personal, social and even political responsibility (because of the large distances covered and long time-span of many environmental impacts), lead to free-riding options, and therefore to an absence of action, aggravating environmental problems. Environmental policies, it was deemed, were therefore extremely difficult to design and implement. Participative and deliberative processes were expected to lead to better policy decisions, built progressively and collectively through a shared diagnosis of the issues at stake and the co-construction of common long-term objectives. In developing countries, this has taken the form community-based environmental management. In developed countries, emphasis has been placed on participatory rule-making for local environmental rules and also on various deliberative fora at the national level, such as the famous citizen conferences on controversial subjects (biotechnologies, climate change) or commissions for public debate. It has also influenced the legislation: for example, the Negotiated Rule-Making Act was enacted in 1991 in the USA to give priority to negotiated solutions to environmental conflicts. The Aarhus Convention was signed by the European Union in 1998 and made compulsory the provision of information to the public, access to justice and greater public participation for matters related to environment.

These new forms of collective decision have given rise to a number of theoretical and policy debates. On the philosophical and political side first, they raise questions about the nature of democracy itself, by highlighting the respective advantages and limitations of representative and deliberative democracy. It also raises questions concerning the ‘right’ level of decision and subsidiarity, and the coordination between different levels of governance. On the more practical side, the success of deliberation depends also very much on the design of participation: who is entitled to participate, with what rights or duties, how to prevent the lack of accountability or representativeness of certain participating groups, what are the decision rules, what role should public authorities play and so on. Although social science research has recently invested in those questions, there is still a large gap in knowledge that leaves decision-makers and coordinators of deliberative processes with too few recommendations and little guidance. The consequence is that it casts suspicion on such processes, throwing discredit on decisions. It is interesting to highlight that the same enthusiasm, and also the same reticence, exists concerning participatory decision-making at the international level.

Participation for Global Governance

At the international level, the issue of legitimate and democratic decision-making is even more crucial since nation states are sovereign and cannot be forced to abide by the law of an international treaty. The issue of global governance has, of course, received considerable attention, more so since citizens and decision-makers are aware that a number of global issues (mainly environmental) can only be solved by international cooperation.

Theoretically, two visions have been traditionally opposed. In the libertarian approa...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Contents
• List of Boxes and Tables
• List of Contributors
• List of Abbreviations
• About Sustra
• Dedication
• Foreword
• 1 Introduction: Participation for Sustainability in Trade
• PART 1: THEORETICAL ANALYSIS OF PARTICIPATORY PROCESSES
• PART 2: PARTICIPATION IN INTERNATIONAL AGENDA-SETTING AND DECISION-MAKING
• PART 3: PARTICIPATION IN IMPLEMENTATION AND EVALUATION
• PART 4: CONCLUSION
• Index