CAN INTERNATIONAL TRADE LAW BE USED TO PROTECT HUMAN RIGHTS OBLIGATIONS? EXAMINING THE RELATIONSHIP...

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Transcript of CAN INTERNATIONAL TRADE LAW BE USED TO PROTECT HUMAN RIGHTS OBLIGATIONS? EXAMINING THE RELATIONSHIP...

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STUDENT NO: 4132407

ANU COLLEGE OF LAW

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CAN INTERNATIONAL TRADE LAW BE USED TO PROTECT HUMAN

RIGHTS OBLIGATIONS? EXAMINING THE RELATIONSHIP BETWEEN

INTERNATIONAL TRADE LAW AND HUMAN RIGHTS AND THE

CHALLENGES BEHIND INCORPORATING HUMAN RIGHTS APPROACHES

INTO INTERNATIONAL TRADE

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INTRODUCTION

The implementation and promotion of human rights is

a frequent topic of debate. The values protected by human

rights law are generally recognised by States as

evidenced by the widespread ratification of human rights

treaties. Violations however continue to occur,1 prompting

human rights advocates to examine alternate methods of

enforcing States and individual actors to comply with

their human rights obligations.

Human rights advocates argue that World Trade

Organisation (‘WTO’) principles and obligations allow

trade agreements to interfere with and subordinate human

rights.2 Some experts however suggest that instead of

prioritising trade measures over human rights, the WTO

should use an approach that links trade with human rights

to empower international trade law with the capability to

improve human rights worldwide.3 This approach begs the

question: can international trade law and trade 1 James A Dorn, ‘Trade and Human Rights: The Case of China’ (1996) 16(1) Cato Journal 77.2 Peter Costantini, You must subordinate human rights to free trade (2001) What’s Wrong with the WTO? < http://www.speakeasy.org/~peterc/wtow/wto-hrs.htm> at June 21 2011.3 Olufemi Amao, ‘Trade Sanctions, Human Rights and Multinational Corporations: The EU-ACP Context’ (2009) 32(2) Hastings International and Comparative Law Review 379, 385.

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agreements promote human rights issues by allowing the

WTO to incorporate non-trade objectives such as human

rights into its framework?4

The aim of this essay is to examine the relationship

between trade liberalisation and human rights and

determine whether the relationship is an effective means

of endorsing a human rights approach to international

trade law. This paper will evaluate the implications and

effectiveness of using the WTO as a body for addressing

current human rights issues in four parts. Part One will

analyse the legal framework of the WTO to determine the

principal aims behind its creation and whether one of

these aims is the incorporation of free trade and human

rights. Part Two will examine the links between trade and

human rights by analysing human rights references in

trade legislation and trade references in human rights

and whether these can and should be combined to encourage

compliance with international obligations. Part Three

will then examine how the WTO could be used to enforce

human rights obligations and analysing and evaluating the

effectiveness of these in this pursuit. Part Four will 4 Ibid.

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then explore other possible approaches to using trade as

an effective tool in implementing human rights measures

to decide whether human rights law and trade law are a

compatible means in achieving the desired objectives from

combining a human rights approach to international trade.

PART ONE: ANALYSING THE ROLE OF THE WORLD TRADE

ORGANISATION

Arguments for and against free trade have existed

since the eighteenth century.5 Moral arguments in support

of free trade focus on notions that free trade is a

right, increases commerce, decreases the likelihood of

war and reduces poverty. Socio-political arguments

highlight the social and political effects of free trade,

which include political stability, national security,

human rights and environmental protection. Those against

free trade however, argue that it only benefits the

wealthy within countries as prioritising environmental

regulations, labour laws, minimum wages, safety

regulations and basic human rights can lead to costs

increases in operating within a country. 6 With such

5 Free trade debate (2011) Wikipedia < http://en.wikipedia.org/wiki/Free_trade> at June 21 2011.6 Ibid.

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arguments being thrown about, we must first analyse the

WTO legal framework and its aims and functions in order

to determine its stance on such arguments.

The WTO was established in 1994 after the conclusion

of the Uruguay round of negotiations under the General

Agreement of Tariffs and Trade (‘GATT’). The GATT was

transformed into the WTO and was established by the

Marrakesh Agreement with the principal aim of freeing up

world trade from protective barriers.7 The WTO supervises

the implementation of international rules on trade

liberalisation and also serves as a negotiating forum for

further liberalisation while its mandate extends beyond

the GATT’s into areas such as liberalisation of trade in

services as well as the protection of intellectual

property rights.8 The WTO therefore operates as the main

international arbiter on trade issues with a particular

focus on issues that arise from moves to internationalise

trade and abolish trade barriers.

The theory of comparative advantage provides the

theoretical underpinning at the heart of the WTO, which

7 Marrakesh Agreement Establishing the World Trade Organisation (15 April 1994) 1867 UNTS 3.8 Ibid.

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is the promotion of free trade – the theory that States

should concentrate on producing what they are best at to

avoid generating opportunity costs and consequent

economic inefficiency.9 The WTO was created to open up

markets and promote international trade by discouraging

protectionist measures based on the concept of free

trade. Its trading system is based on two notions: first,

removing trade protection normally enhances that domestic

and international welfare. Second, the fundamental

necessity of being able to distinguish protectionist

cheating on trade rules from various trade-impacting

policies which are purported to use aims unrelated to

commercial interests themselves, be it environment,

health and safety, or human rights.10

At the time of its creation, governments in the EC

and the United States, and members of the international

trade union movement wanted to give the WTO the power to

determine whether its member countries observed basic

human rights in labour management, along with the power

9 Sarah Joseph, ‘Human Rights and the WTO: Issues for the Pacific’ (2009) 40 Victoria University Wellington Law Review 351, 351.10 Robert Howse, ‘The World Trade Organization and the Protection of Workers’ Rights’ (1999) 3 Journal of Small and Emerging Business Law 131, 141.

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to bestow sanctions upon these members if they did not

comply. References to these rights included the rights of

freedom of association, the right to organise and bargain

collectively, non-discrimination in the work place,

freedom from child labour and freedom from slavery.11

Their arguments for endorsing human rights strategies in

the WTO was that WTO principles were not incompatible

with other goals contained in other international

agreements and that, even though the WTO was established

for the principal purpose of developing trade by reducing

the obstacles between its members, its goals, especially

those aimed at non-discrimination, were not incompatible

with other goals in other international agreements that

many WTO parties had signed and ratified.12

Other WTO members however argued that the WTO should

not be legally or philosophically equipped to arbitrate

on such matters and that any of these concerns should be

left to the International Labour Organisation (‘ILO’).

They argued that substantiating international trade on

11 Richard Broinowski, ‘Delinking Trade from Human Rights: The Australian Approach’ (1997 / 1998) 45 Australian Rationalist 47, 48.12 Andres Felipe Celis Salazar, ‘Can WTO Members Rely on Non-WTO to Justify A Violation of WTO Law?’ (2007) 10 International Law: Revista colombiana de derecho internacional 341, 343.

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non-trade-related matters such as rights of workers, is

detrimental to the promotion of welfare-enhancing free

trade, that it is hostile to the economy of developing

countries since increased export trade is one of the best

ways of improving their economy, that the WTO’s legally

defined trade policy measures would be incapable of

dealing with complex social concepts and finally that the

argument for workers’ rights is simply disguised

protectionism. They substantiated this argument with the

following conclusion: if the WTO linked human rights to

trade that it would neither serve trade nor human rights

interests and thus be detrimental to the WTO’s principal

purpose of trade liberalisation.13

Herein lies the difficulty for those wishing to use

the WTO as a means for strengthening the relationship

between human rights and trade. If establishing a link

between human rights and trade by endorsing a human

rights approach when considering trade liberalisation

issues were a key issue of the WTO, then the parties

would have expressly indicated that in the treaty text.

Because WTO legislation does not contain these express 13 Broinowski, above n 11, 48.

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references, the prevailing view is that the ILO or other

human rights bodies are the principal means for dealing

with human rights or labour standards. The WTO was

established for the purpose of liberalising trade –

therefore this should take priority over other issues to

satisfy its principal goal.14

CRITICISMS AND CONFLICTS BETWEEN WTO PROVISIONS AND HUMAN

RIGHTS LAW

The resistance to provide the WTO with human rights

responsibilities, has created a multitude of criticism

about the WTO’s stance on human rights – namely that the

WTO enshrines commerce as a higher value than other more

fundamental “human” values. Despite its potential to have

profound effects on their livelihoods, WTO members are

rarely well informed of the negotiating process within

the WTO. Those who are detrimentally affected by WTO

rules rarely, if ever, have access to procedures of

redress after a state’s accession. Furthermore, as the

negotiation process is dominated by free trade and

commercial values, these values will likely be

14 Salazar, above n 12, 350 – 351.

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prioritised when they conflict with or diverge from

values such as environmental interests or human rights.15

Those against empowering the WTO to ensure

compliance with human rights through trade argue that

focusing on workers’ rights within a domestic context can

be interpreted as disguised protectionism. Opponents

however, state that protectionism violates human rights,

as it is an act that deprives individuals of their

autonomy by empowering governments who do not take

individual rights into consideration.16 Proponents for

human rights and trade links also argue that trade

liberalisation posits a close link between increasing

economic freedom and securing human rights by reducing

government power, which in turn leads to personal freedom

and encourages moral government. Free markets that are

founded on consent and private property encourage

individual responsibility, self-esteem, social mobility

and tolerance, all of which are fundamental tenets of

human rights and democracy. Moreover, economic

liberalisation breeds political liberalisation. As

15 Joseph, above n 9, 353.16 Dorn, above n 1.

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markets spread, people acquire more wealth and gain

interest in participating in political discourse and

protesting their property. They conclude that free

markets therefore provide a basis for political regimes

that are more oriented towards human rights and thus more

likely to implement and protect them.17

Those who deplore the lack of human rights

references in the GATT and its disregard by the WTO argue

that the WTO’s basic principles of most-favoured nation

status18 and blindness to production and processing

methods19 prohibit distinguishing among trading partners

because of bad human or labour rights records. Any

attempts to ban importing goods made from child labour

would violate the GATT because child labour is viewed as

a production method instead of a physical property of the

product.20 They also argue that WTO treaties and their

interpretations subordinate values such as environmental

sustainability, public health, consumer and worker safety

and freedom of labour and human rights in order to

17 Ibid.18 General Agreement on Tariffs and Trade 1994, Agreement Establishing the WTO, Annex 1A, 1867 UNTS 187, Art. 1.19 Ibid.20 Costantini, above n 2.

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maximise trade.21 Furthermore, nearly all WTO decisions

have gutted democratic restrictions on trade, which have

lead to lower standards of consumer and environmental

protection, public health and human rights.22 They argue

that the WTO weakens the power of citizens to defend

human and labour rights through domestic government

policies, even arguing that widespread government

sanctions against South Africa during its Apartheid

system would probably have been illegal under the WTO.23

Even intellectual property, which is regulated by the

WTO’s TRIPS agreement can be used to enforce restrictions

on trade via copyrights and patents through claims of

encouraging innovation and exclusively benefitting

wealthy nations and transnational enterprises at the

expense of poorer nations.24

The argument for those who favour a human-rights-

before-trade approach is that the current system of

global trade and investment rules has failed because it

21 Ibid.22 Peter Costantini, What’s Wrong with the WTO? (2001) What’s Wrong with the WTO? < http://www.speakeasy.org/~peterc/wtow/index.htm> at June 21 2011.23 Costantini, above n 2.24 Costantini, above n 22.

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has weakened the bargaining power of workers everywhere

by undermining national regulations to protect workers’

rights and public health and thus exacerbating growing

inequality worldwide.25 Human rights advocates frequently

condemn the WTO’s current system of prioritising trade

liberalisation over other international law issues such

as these. The question for those wishing to strengthen

and promote the relationship between international trade

law and international human rights law is: is a rules-

based global trading system that protects workers’

rights, human rights, the environment, public health and

consumer protection feasible?

PART TWO: ESTABLISHING LINKS BETWEEN TRADE AND HUMAN

RIGHTS

The links between international human rights law and

international trade law have been the subject of much

focus in recent years. Debates about their similarities,

differences and coherence are creating international

tension; especially for those States and individuals who

believe that the WTO’s principal objective is trade

liberalisation only. Despite these conflicting views, the25 Costantini, above n 2.

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links between the two bodies of international law are

constantly endorsed and reaffirmed26 and attempts to

promote their links continue to gain strength. On June 22

2011, the UN Human Rights Office of the High Commissioner

released a statement declaring that in an unprecedented

move the United Nations Human Rights Council has endorsed

a new set of Guiding Principles for Business and Human

Rights which aim to provide – for the first time- a

global standard to prevent and address the risk of

adverse impacts on human rights linked to business

activity.27 Furthermore, Michelle Bachelet released a

statement on June 16 2011 on the Adoption of the ILO

Convention and Recommendations on Decent Work for

Domestic Workers in which she describes the convention as

“precedent-setting” for its sole focus on domestic work

and its definition and praises it as a tool for ‘laying

out human rights standards for domestic workers in the

context of the decent work agenda, within which to act as

26 Gillian Moon, ‘A Light in a Dark Place? Human Rights and International Trade Law’ (2006) 9(2) Balayi: Culture, Law and Colonialism 58, 58.27 UN Human Rights Office of the High Commissioner, ‘New Guiding Principles on Business and Human Rights endorsed by the UN Human Rights Council’ (Press Release, 22 June 2011).

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committed governments, responsible employers and

workers.’28

The stimulus for these attempts to create legal

instruments by linking international standards of human

rights law and trade law arises from their common origin

and shared objectives. Both international trade law and

international human rights law originated and entered the

arena of public international law at the same historical

point. Both were considered essential components of the

international strategy devised in the final days of World

War II to prevent future world wars. Because of the

similarities of their origins, connections are frequently

pointed out by those wishing to show instances where the

WTO can, or has the potential to negatively influence the

implementation of human rights.29 The United Nations High

Commissioner for Human Rights argues that human rights

law should be extended and reconceived to include the

kinds of market freedoms protected by WTO law as economic

rights within human rights law. By citing factors such as

28 Michelle Bachelet, ‘ Statement by UN Women Executive Director Michelle Bachelet on the Adoption of the ILO Convention and Recommendations on Decent Work for Domestic Workers’ (Press Release, 16 June 2011).29 Moon, above n 26, 58.

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similarities of objectives, scope and terminology, the

common status of human rights and trade law as bodies of

international public law provide opportunities to examine

how the two types of law could be integrated to form a

more coherent relationship.30

LINKING THE SIMILARITIES BETWEEN INTERNTIONAL HUMAN

RIGHTS LAW AND INTERNATIONAL TRADE LAW

In its preamble, the Marrakesh Agreement, which

established the WTO, included not only free trade as its

objective but also referred to human rights and social

issues, such as raising the standards of living, ensuring

full employment, sustaining development and protecting

the environment.31 This is an example of one of the first

attempts to establish a link between human rights law and

trade law.

International trade law and human rights law entered

the body of public international law at the same

historical point and were both considered a vital element

in securing international peace and security in

30 Ibid.31 Marrakesh Agreement Establishing the World Trade Organization, 1867 UNTS 154.

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international relations after World War II for the

prevention of future world wars.32

The core principle of the notion of free trade

promoted by the WTO is the principle of non-

discrimination, which is enshrined in all WTO

agreements.33 The principle of non-discrimination is

equally fundamental in human rights law. The Human Rights

Committee has declared it is ‘a basic and general

principle relating to the protection of human rights’

which is not only present in the United Nations Charter

but also the Universal Declaration of Human Rights, the

ICCPR, the ICESCR and is reiterated in most of the major

human rights treaties.34 The United Nations take this

analysis of the linkage between the two one step further

by stating that ‘the realms of trade, finance and

investment are in no way exempt from human rights

obligations and principles.’35 Those human rights 32 Moon, above n 26, 59..33 Gudrun Zagel, ‘The WTO and Trade-Related Human Rights Measures: Trade Sanctions vs. Trade Incentives’ (2004) 9 Austrian Review of International and European Law 119, 125.34 International Covenant on Civil and Political Rights, opened for signature 19 December 1966, 999 UNTS 171 (entered into force 23 March 1976), General Comment No 18, para.1.35 Office of the High Commissioner for Human Rights, Human Rights as the Primary Objective of Trade, Investment and Financial Policy, Sub-Commission Resolution 1998/12.

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obligations and principles include labour standards,

labour conditions, environmental policies and access to

life-saving drugs. Even Article 55 of the UN charter is

evidence that its human rights goals of higher living

standards, full employment and economic development are

shared by those who created the preamble to the GATT.

Human rights and liberal trade rules, including

those of the WTO, are based on the same values. These

include individual freedom and responsibility, non-

discrimination, rule of law, the freedom of access to

courts and adjudication of disputes, the promotion of

social welfare through peaceful cooperation among

citizens and parliamentary approval of domestic and

international rules.36 Human rights are also to be

understood generally to encompass not only the rights

contained in the “International Bill of Rights” but also

basic standards, as protected by the International Labour

Organisation (ILO). The links between international trade

law and international human rights law are often used by

NGOs, scholars and the United Nations to substantiate a

36 Ernst-Ulrich Petersmann, ‘The WTO Constitution and Human Rights’ (2000) 3(1) Journal of International Economic Law 19, 19.

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case for linking human rights to international trade

within the context of the WTO as an inevitable expansion

of the WTO trade mandate. The UN has called on the WTO to

shift to a human rights based approach to international

trade citing the links mentioned above, by arguing that

the promotion and protection of human rights law over all

other regimes of international law is a basic and

fundamental principled that should not be departed from.37

Human rights advocates also argue for inclusion of human

rights considerations in the international trade regime

because they believe that these links between

international trade and human rights are a legitimate and

necessary linkage within the WTO. Failure to do so will

only increase disregard for human rights – especially in

the domain of labour rights.

HUMAN RIGHTS AND THE WTO

The WTO does not explicitly take human rights

considerations into account in multilateral trade

liberalisation. The GATT lacks express references to

human rights considerations with the exception of the

37 Tatjana Eres, ‘The Limits of GATT Article XX: A Back Door For Human Rights?’ (2003-2004) 35 Georgetown Journal of International Law 597, 600.

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reference in the preamble of the Marrakesh Agreement that

established the WTO. This sole reference conceives of

trade liberalisation as a means to an end, which is the

fulfilment of basic human values, which include ‘Raising

standards of living, ensuring full employment …’38

Although these expressions provide a contextual

basis for precise human rights implications, they do not

trump the widespread belief among WTO members that human

rights considerations are not within the realm of the

WTO. Because of this, difficulties in achieving a global

consensus have forced the issue off the WTO agenda,

leading to debates between scholars and human rights

lawyers about whether a link exists between international

trade law and international human rights law and if so,

how trade liberalisation can be made compatible with

human rights in order to use one to enforce the other.39

IS TRADE A HUMAN RIGHT?

The WTO was established for the specific purpose of

liberalising trade with the commonly held view that this

issue prevails over others when presented with a conflict

38 Marrakesh Agreement Establishing the World Trade Organisation (15 April 1994) 1867 UNTS 3.39 M. Rafiqul Islam, International Trade Law of the WTO (1st ed, 2006) 534.

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of laws.40 In terms of international rules such as human

rights, the current argument is that if other issues

prevailed then this would have been expressly indicated

by participating parties in any relevant treaty texts. So

what is the relationship of trade within an international

law arena? Is it an inherent part of an individual’s

property rights and a civil right that should be

protected as a fundamental human right and what evidence

of this is there in international texts?41

Proponents who argue for the use of trade to advance

human rights claim that free trade is a human right as it

rests on an individual’s rights to life, liberty and

property. When these rights are denied, they rob an

individual of one or more freedoms.42 Express references

to a “right to trade”, however, do not appear in any

documents of key international institutions.

TRADE REFERENCES IN INTERNATIONAL TREATIES

We therefore need to find references within human

rights instruments where trade can have an effect on 40 Salazar, above n 12, 350 .41 Dorn, above n 1.42 Ibid 78.

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labour, environment and legal representation rights,

especially as a majority of countries are parties to at

least one human rights treaty such as the Convention on

the Rights of the Child (‘CROC’), the Convention on

Elimination and Discrimination Against Women (‘CEDAW’)

and the “International Bill of Rights” which consists of

the International Covenant on Civil and Political Rights

(‘ICCPR’) and the International Covenant on Economic,

Social and Cultural Rights (‘ICESCR’). One example of

this is the right to health, which features in the UDHR43

and the ICESCR44 and was encroached upon in the Thai

Cigarettes case45, the Hormone Beef case46 and the Asbestos case47, in

addition to the TRIPS Agreement, which also impedes on

this right by preventing poor people from accessing

affordable medicines and generic drugs because of their

protection under intellectual property rights.

Signatories to these treaties are legally bound to take

measures that respect, protect and fulfil human rights

43 GA Res 217A (III), UN Doc A/810 (10 December 1948), Article 25.44 Opened for signature 16 December 1966, 999 UNTS 3 (entered into force 3 January 1976), Article 12.45 WTO Doc WT/DS10/R – 37S/200 (1990) (Report of the Panel).46 WTO Doc WT/ DS26/ R/ USA (1997) (Report of the Panel). 47 WTO Doc WT/ DS135 / R & WT / DS135/R/Add.1 (2000) (Report of the Panel).

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and ensure that they do not undermine the ability of

other countries to comply with their human rights

obligations.48 Without an express reference to trade, this

is presently the best way to implement trade-related

human rights measures.

CURRENT HUMAN RIGHTS ENDORSEMENT STRATEGY OPTIONS

Opponents of incorporating human rights style

legislation into trade agreements or endorsing a human

rights approach to free trade argue that current

international human rights measures are more than

suitable, but is this view accurate? Although

international human rights instruments generally ensure

compliance through monitoring, and in some cases through

individual complaints mechanisms, there are no strong

enforcement measures, let alone trade measures, to make

states comply with international standards.49 Because of

this, it is suggested that linking human rights to trade

agreements would be an effective way to compel States to

meet their human rights commitments as well as ensuring

48 International Covenant on Economic, Social and Cultural Rights, opened for signature 16 December 1966, 999 UNTS 3 (entered into force 3 January 1976), Article 2(1).

49 Zagel, above n 33, 124.

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that private actors such as corporations do not violate

human rights.50 The theory behind this is that endorsing

the use of trade agreements for compliance with

international obligations provides extra guarantees for

human rights and would signal to States that they would

lose numerous trade benefits if they fail to prevent

human rights violations in their State.51

USING TRADE TO DEAL WITH HUMAN RIGHTS ABUSES

The relationship between human rights and the WTO

has generated different positions. Human rights advocates

argue that WTO agreements hinder the ability of States to

achieve objectives such as human rights and that the WTO

system makes it harder for States to meet their

obligations under the Universal Declaration of Human

Rights to respect, protect and promote human rights.

Opponents however argue that the WTO system has a strong

and effective dispute resolution mechanism while the

international system of human rights does not. Some argue

that WTO rules give precedence to trade over human rights

issues. Others defend the WTO system arguing that the

50 Amao, above n 3, 394.51 Ibid 417.

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WTO’s function is to govern trade and not human rights

issues.

Incorporating human rights into trade measures can

have a powerful effect. For example the right to life and

the right to health can be found enshrined in human

rights treaties and impose on States an obligation to

make sure that this accessible to all their citizens. One

way of doing this is to ensure access for all to

affordable medicines by preventing intellectual property

rules from infringing on human rights requirements.

Incorporating human rights and trade would compel

governments to take into account their human rights

obligations not only at an international level, but

domestically when drafting and implementing bilateral

trade agreements by, for example, ensuring that third

parties like the pharmaceutical industry do not exert

pressure on trade negotiations. Furthermore, States that

have signed but not ratified human rights treaties would

be bound from engaging in acts that would defeat the

object and purpose of human rights.

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Trade measures are a powerful tool. After the use of

force, they are perhaps the most effective means by which

one state can impose its will on another.52 The concept of

trade supporting the advancement of human rights can be

demonstrated in various ways. For example, it increases

economic growth and leads to higher standards of living,

thus having the effect of taking people out of poverty.

Liberalising barriers to the trade in services also has

the ability to enhance movement of labour from one

jurisdiction to provide greater opportunities to exercise

the right to work. It is possible that justifying

measures on the basis of human rights treaties (even

those of almost universal acceptance) might well be

defeated by countries that are not party to them.

Moreover there is unlikely to be any human rights treaty

to which all WTO members are a party.53 This provides the

perfect impetus to integrate human rights and trade in

order to strengthen an international commitment to human

rights norms. The question now is, is the WTO willing to

accept the challenge and take up the offer?

52 Jenny Schultz and Rachel Ball, ‘Trade as a Weapon? The WTO and Human Rights-Based Trade Measures’ (2007) 12 Deakin Law Review 41, 43.53 Ibid 57.

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PART THREE: WHAT IS THE MOST EFFECTIVE WAY TO ENFORCE

HUMAN RIGHTS THROUGH TRADE: WTO OPTIONS

The aim of trade-related human rights measures is to

improve the human rights situation by prohibiting or

restricting economic relations. Attempts to integrate

human rights into liberal trade law have faced

considerable adversity. Suggestions of introducing a

human rights clause into the WTO agreement, or that WTO

meetings and dispute settlement proceedings be open to

the public have all been rejected.54

The most controversial question is whether trade-

related measures are a feasible instrument to improve

human rights. When analysed from an ethical point of

view, trade measures such as prohibiting products made

from child labour appear justified. When analysed from

an economic point of view however, they do not, as

measures like trade sanctions often have side effects

that ultimately harm the people whose human rights

situation they are attempting to improve.55

54 Petersmann, above n 54, 19.55 Zagel, above n 33, 120.

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Human rights advocates continue to argue that trade

is an appropriate instrument to advance human rights and

generally identify two ways in which human rights could

be used by the WTO to do this. The first is to reform WTO

rules and restructure and apply them in such a way that

human rights aims and objectives are promoted by linking

international trade and human rights regimes. The second

is to question the extent to which the current trade

regime can be used to promote or at least not undermine

the enjoyment of human rights.56 We therefore need to

examine three issues: first, whether the WTO can become a

body for addressing human rights issues by analysing

possible trade-related human rights measures; second,

whether a human rights approach to trade is a feasible

way of using trade measures to solve human rights

violations and third, if this approach is feasible, what

is the most effective way of using trade and the WTO to

endorse a human rights approach for those countries whose

human rights are at risk.57 The two most endorsed options

56 Schultz and Ball, above n 52, 42.57 Zagel, above n 33, 119.

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for this are economic sanctions and the WTO’s general

exception clause.

ECONOMIC SANCTIONS

With the prohibition of the use of force to enforce

international law under the United Nations framework,

trade sanctions have emerged as one of the most coercive

means available to enforce international law, especially

international human rights norms.58 Economic sanctions can

be authorised in two ways; either as economic sanctions

by the UN Security Council within the system of

collective security under Chapter VII of the UN Charter,

or imposed unilaterally. The UN Security Council has

imposed economic sanctions in the past against Iraq,

Sierra Leone, or Somalia.59 Gross violations of human

rights were specifically targeted by sanctions against

Haiti, Rwanda and Congo. Although such provisions would

constitute discriminatory trade restrictions under WTO

law, as they are banned under Articles I and XI GATT,

Article XXI(c) GATT allows deviation from GATT

58 Amao, above n 3, 382.59 Zagel, above n 33, 121.

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obligations in order to pursue a member State’s

obligations under the UN Charter.60

Unilateral economic sanctions are often used as an

example of how trade is a legitimate means to fight human

rights abuses such as child or slave labour. Examples of

their success include the fight against Apartheid in

South Africa61 and in the fight against human rights

violations arising from trade in “conflict diamonds.”62

Those who oppose the use of sanctions however, argue that

they in themselves are not human rights neutral and often

fail in their objective. International human rights

treaties do not contain any references allowing trade

sanctions as a way of enforcing compliance with human

rights norms63 and opponents argue that their use can lead

to further exacerbation of the violation of rights such

as the right to life, the right to freedom from inhuman

or degrading treatment, the right to an adequate standard

of living, food, clothing, housing and medical care.64

60 Ibid.61 Schultz and Ball, above n 52, 71.62 Ibid.63 Schultz and Ball, above n 52, 72.64 Ibid.

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The case for whether economic sanctions should be

used to enforce human rights revolves around two

questions. First, are they legitimate? Second, are they

effective?65 Sanctions would be legitimate for preventing

trade with an enemy in circumstances where trade would

directly enhance the military’s capability and ultimately

lead to a situation where the enemy could use this to

harm another country’s citizens. Banning the importation

of goods made from slave labour or prison labour, or by

those who have been wrongly imprisoned is another

legitimate use, as is protecting the rights of minors by

preventing the importation of goods made from child

labour. Perhaps the most legitimate use of trade

sanctions though would be against the abuse of

intellectual property rights.66 Intellectual property is a

private property right, widely governed by the WTO

through its TRIPS agreement and would be a legitimate

pursuit through banning the importation of pirate

software and entertainment discs. Moreover, using

sanctions to enforce compliance with copyright laws could

65 Dorn, above n 1.83.66 Ibid.

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be supplemented by providing multilateral agreements with

other States to protect intellectual property rights and

encourage non-members to become a party to the WTO.

The question of their effectiveness however is less

clear. In order for sanctions to be truly effective, a

State requires the near unanimous support of its major

trading partners, the need for the target country’s

government to prioritise the implementation of its

citizens’ human rights, and for the benefits of the

sanctions to the countries implementing the sanctions

exceed the costs. There are also other potential problems

with the effectiveness of trade sanctions. First, the

violating country can circumvent sanctions by finding

substitutes of new supply sources for the sanctioned

goods. Sanctions can also fail to have an impact on

countries whose political regime displays an extensive

lack of regard for the human rights of its citizens, as

was the case with Iraq, and who also lack fundamental

aspects for a successful trade boycott, such as freedom

of the press. When sanctions occur in such cases, it is

generally the poorest and most defenceless in these

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countries that suffer the most from economic sanctions.

In contrast the political elite, who are generally

responsible for the human rights violations in the first

place are likely to be unaffected by the negative effects

of the sanctions and can use sanctions as a tool to

incite opposition against the sanctioning country.

Product based sanctions can also have carry over effects.

Banning the importation of goods made from child labour

could force children into other dangerous forms of work

such as prostitution, or leave them without enough money

to live. The list goes on.67

The detrimental effects, particularly on human

rights, means that economic sanctions have the ability to

do more harm than good. The Committee on Economic Social

and Cultural rights outlined some of these detrimental

effects on human rights in General Comment 8:

While the impact of sanctions varies from one case to another,

the Committee is aware that they almost always have a dramatic

impact on the rights recognized in the Covenant. Thus, for

example, they often cause significant disruption in the

distribution of food, pharmaceuticals and sanitation supplies,

jeopardize the quality of food and the availability of clean 67 Dorn, above n 1, 77.

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drinking water, severely interfere with the functioning of

basic health and education systems, and undermine the right to

work. In addition, their unintended consequences can include

reinforcement of the power of oppressive elites, the emergence

of a black market and the generation of huge windfall profits

for the privileged elites which manage it …and restriction of

opportunities to seek asylum or to manifest political

opposition. While the phenomena mentioned … are essentially

political in nature, they also have a major additional impact

on the enjoyment of economic, social and cultural rights.68

The Preamble to the Marrakesh Agreement, which

established the WTO, states that the trade system should

be ‘conducted with a view to raising standards of living…

ensuring full employment…and allowing for the optimal use

of the world’s resources in accordance with the objective

of sustainable development.’69 Economic sanctions however,

antagonise the governments in the sanctioned country and

radicalise those in power, thus destroying their

objective of advancing human rights. As these arguments

show, they are not an efficient trade-related human

68 The Committee on Economic Social and Cultural Rights, UN Doc. E/C. 12/1997/8, (1998) General Comment 8, Paragraph 9.69 Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations,opened for signature 15 April 1994, 1867 UNTS 14, Preamble.

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rights measure in the fight to implement change in

countries with poor human rights records.

ARTICLE XX

WTO members must ensure that their national trade

regulations comply with GATT principles. There is

however, a way for those who wish to use GATT provisions

to protect the international human rights regime and

justify unilateral trade-restrictive measures to enforce

human rights, and that is through Article XX.

Article XX GATT is the general exception clause,

which provides an exhaustive list of public policy

reasons that a Member may invoke to justify a violation

of a WTO obligation. Those relevant for trade-related

human rights measures are the protection of public

morals,70 the protection of human, animal or plant life or

health,71 measures relating to prison labour72 and the

conservation of exhaustible natural resources.73 As well

as fulfilling the requirements of the specific policy

goals, the protective measure must comply with the

70 General Agreement on Tariffs and Trade 1994, Agreement Establishing the WTO, Annex 1A, 1867 UNTS 187, Article XX(a).71 Ibid, Article XX(b).72 Ibid, Article XX(e).73 Ibid, Article XX(g).

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general requirements of the Article XX chapeau: namely,

the non-discrimination principle that is enshrined in all

WTO agreements, and must not be a disguised restriction

to international trade.

It is important to note that Article XX is a general

exception clause and not a human rights or social clause,

which is one of the reasons that human rights proponents

argue for incorporating specific legislation for labour

rights and human rights into the WTO. Human rights

violations however can still fall under this exception.

Articles XX (a), (b) and (d) provide members with

possible exceptions to invoke justification for trade-

related human rights measures by giving members the

option of three different objectives. Under Article XX(a)

the measure must ‘protect public morals’. Under Article

XX(b) the measure must ‘protect human, animal or plant

life or health while Article XX(d) can be used to ensure

‘secure compliance with laws or regulations’. Further

legal bases for implementing trade-based social and human

rights measures also exist under Article XX(e), the

prison labour exception or Article XX(g) for measures

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relating to the conservation of exhaustible natural

resources. Until now, exceptions (a) and (e) have rarely

been applied or mentioned in any of the reports of the

Dispute Settlement institutions. Articles XX(b) and XX(g)

however have frequently been invoked to justify

environmental or public health measures.

The key to using Article XX to justify intervention

for human rights protection is to determine which rights

are in jeopardy and justify it by creating a link between

the either the product or the process used for the

product. For example, paragraph (e) allows measures

relating to the ‘products of prison labour’ and covers

measures directed at goods produced by prison labour.

This exception could also be extended to include workers

situations that involve slavery. Another potential

example includes the public morals exception in paragraph

(a), which could be used to ban pornographic material

produced from the abuse of women or even children.

Paragraph (a) is of vital importance to those wishing to

use the WTO to invoke compliance with international human

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rights norms for the production of goods that have

involved a violation of public morals.

Article XX(b) is also important to those wishing to

use trade to enforce human rights because it allows

measures necessary to protect human life and health. Not

only does it protect human life, but it also can be

extended to encompass justification of public health

measures as an aspect of the human rights to health, such

as those in the Asbestos case74 where it was argued that an

import ban of substances containing asbestos was a

justified measure to protect public health.75 This

paragraph could also be used to justify trade measures

against products arising from extremely dangerous working

conditions. Article XX(g) can also use these types of

extensions as it calls for the protection of living and

non-living natural resources and could be invoked as an

exception to protect the right to food as was seen in the

US Shrimp case.76

74 European Communities – Measures Affecting Asbestos and Asbestos-Containing Products,WTO Doc WT/ DS135 / R & WT / DS135/R/Add.1 (2000) (Report of the Panel).75 Ibid. 76 WTO Doc WT / DS58/R (1998) (Final Report).

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The problem with invoking Article XX is that it

contains two requirements. It is not enough to justify

its use under an enumerated exception – it must also

satisfy the general affirmative requirements in the

chapeau of Article XX – namely that it not be applied in

a discriminatory way or as a disguised restriction on

trade. Therefore, in order to invoke this exception, a

Member must show a connection between the targeted

product and the risk in order to prove a nexus between

the measure and the policy objective in order to maintain

consistency with the GATT’s object and purpose.

Measures invoked under articles XX (a) and (b) must

also pass a “weighting and balancing test”, which

evaluates a series of factors to determine if a measure

is necessary to achieve the intended outcome. Such

factors include the importance of the interest or value

protected by the measure, the extent to which the measure

achieves its intended goal and the trade impact the

measure would have. If there are no measures available

that are consistent with WTO rules then the least trade-

restrictive means possible must be applied. Here lies the

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difficulty. If an import restriction is the least

restrictive measure, then not only could it further

deteriorate the situation for those concerned but also

prove ineffective.

The requirements to bring an action under Article XX

for a human rights violation are cumbersome and

demonstrating that the requirements of the chapeau have

been met is a difficult task. WTO Dispute Settlement case

law has a history of showing a restrictive attitude

towards environmental matters and public health

concerns.77 Attempts to impose sanctions for human rights

violations will most likely be viewed as discriminatory

and lack justification meaning that exceptions invoked

under Article XX requirements will most likely fail.

Unfortunately, the majority of measures used to

enforce human rights law on a trade basis would not fall

within the range of policies designed to serve the policy

objective and would run the risk of appearing

protectionist in their application. The above analyses

highlight the lack of foresight of the GATT drafters to

77 United States – Import Prohibition of Certain Shrimp and Shrimp Products, WTO Doc WT/ DS58/AB/R (1998) (Report of the Appellate Body).

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consider these issues and prove that there is a current

inability to reconcile the WTO system with international

human rights law. Human rights advocates must therefore

find other more effective measures if they wish not only

to make trade and human rights compatible but also

effective.78 Using the WTO as a mechanism as a means to

improve human rights violations through trade law is

possible, but as we have seen, ineffectual and, more than

likely, unsuccessful.

PART FOUR: POSSIBLE WAYS TO IMPROVE THE RELATIONSHIP

BETWEEN TRADE LAW AND HUMAN RIGHTS LAW

Despite the many advantages of linking trade and

human rights and using the WTO to enforce their

implementation, the difficulties outweigh the advantages.

States are currently at liberty to draft human rights

legislation in free trade agreements at a domestic level,

but not at an international level. Calls to amend current

WTO agreements are countered with the argument that the

WTO is a trade organisation and not an organisation to

78 Sarah H. Cleveland, ‘Human Rights Sanctions and International Trade: A Theory of Compatibility’ (2002) 5(1) Journal of International Economic Law 133, 189.

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enforce human rights.79 Human rights monitoring is the

responsibility of UN human rights organisations and any

human rights concerns should be presented at the relevant

forum.80

Taking all these arguments and factors into

consideration, the one question left now is: how could

the WTO approach the issue of human rights obligations

and implementation under the current circumstances?

FEASIBLE APPROACHES WITHIN THE WTO TO HUMAN RIGHTS

While suggestions abound that human rights issues

should either be addressed to human rights bodies or left

to the ILO, there are still several ways States can

ensure human rights compliance at a State level.

Incorporation of human rights standards in trade

agreements is unavailable at an international level, but

incorporating human rights aspects into technical

assistance programs, especially for developing countries,

could serve as a starting point, as these programs are an

79 Zagel, above n 33.80 Ibid.

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important part of WTO work. Incorporating human rights

standards directly into access to WTO benefits81 or WTO

membership for those who are not WTO members could act as

an incentive for States to comply with their human rights

obligations. The WTO could also avoid the negative

aspects of trade measures against human rights violations

by conducting a human rights impact assessment of its

decisions and rules.82

In contrast to trade sanctions, an alternative and

probably the most effective option at this point would be

trade incentives, which have the benefit of providing

incentives instead of coercion. The EU has an extensive

history of adding human rights clauses to cooperation

agreements with third countries in an attempt to improve

measures through voluntary compliance and thus provide a

reward of trade preferences. Unlike trade restrictions,

trade aspects have positive advantages. First, they do

not infringe on another state’s sovereignty and do not

interfere with internal affairs. Second, trade incentives

are more efficient at targeting a population’s needs,

81 LAWS 8229 Overhead: Trade and Human Rights.82 Zagel, above n 33.

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especially when they are combined with technical

assistance and programs to promote the awareness for

human rights and change of the human rights situation in

the target country.83

These are all viable methods within the realm of the

WTO but they are still no substitute for express

references and mainstreaming of human rights norms into

WTO trade agreements. Those wishing to pursue human

rights goals must therefore use other means if they wish

to vigorously pursue compliance with human rights norms,

as current trade measures do not have enough impact for

this goal.

CONCLUSION

The relationship between human rights and trade

remains one of the most contentious issues faced by those

participating in today’s world trading system.84 Social

justice and human rights concerns regarding the WTO are

real and substantial.85 Improving human rights situations

from an economic view would be a prudent long-term

investment that would increase social standards by 83 Ibid 33.84 Howse, above n 10, 131.85 Joseph, above n 9, 352.

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limiting work hours, increasing social benefits and

providing education opportunities for workers. This in

turn would attract foreign investors, as the country’s

productive capacity comprising labour forces who enjoy

basic human rights and social standards, would rise and

therefore ultimately increase economic performance and

produce long-term economic rewards.

Raising human rights standards only works when a

country’s public and private actors are involved to make

feasible programs to satisfy a country’s needs. Trade-

related human rights measures permitted by the WTO

presently are not sufficient for improving a country’s

human rights situation, nor do they protect the economy

of the State imposing the sanction. These measures must

be strengthened if there is any hope of integrating human

rights norms into international trade in order to improve

international compliance with human rights norms and

strengthen the current links between international trade

and human rights. It is not enough to leave human rights

monitoring to the UN human rights bodies and the ILO.

Current trade measures are an inappropriate means to

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achieve human rights goals, so the WTO must integrate

human rights aspects into its framework and work together

with UN human rights bodies and other organisations to

set standards and monitor the implementation of human

rights if it wishes to stay loyal to its purpose of

encouraging free trade in order to improve the living

standards for citizens.

Examining the relationship between trade and human

rights is an ideal way to elaborate approaches to

mainstreaming human rights in the WTO and incorporating

them into their legislation and dispute settlement

actions. Until this is done, the improvement of human

rights standards will remain a distant and desirable goal

- one that is unachievable through current trade measures

and unsupported by the WTO.

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