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«EUI Working Papers RSCAS 2012/23 ROBERT SCHUMAN CENTRE FOR ADVANCED STUDIES Global Governance Programme-18 MULTILEVEL GOVERNANCE OF INTERDEPENDENT ...»

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For a not entirely hypothetical illustrative case: a number of ideas have been put forward at WHO on new mechanisms for funding R&D on new vaccines and treatments (Health Action International Global et al., 2001). It is possible that a new international legal instrument ("New Instrument") will emerge with some creative approach to promoting R&D. What if that new approach is inconsistent with some rule of the TRIPS Agreement?

In what is probably the easiest case, a WHO-sponsored New Instrument would be adopted by consensus of WHO members and, from the standpoint of the Vienna Convention on the Law of Treaties (VCLT), would be a later in time agreement with coincident parties as the WTO Agreement, with the later in time agreement governing (Article 30(3), VCLT). Given that the WTO Appellate Body has already recognized that the WTO is not a self-contained legal system (WTO Appellate Body, 1998), it seems unlikely that the Appellate Body would fail to give priority to a later in time inconsistent agreement among coincident state parties. The situation becomes more difficult if a WHO New Instrument was not accepted by one or more key economic actors. It would be effective among its state parties, including at the WTO (per Article 30(4) of the VCLT). But, rights and obligations in respect to parties that did not adopt the New Instrument would remain governed by the WTO Agreement, including, for example, the TRIPS Agreement. This could give rise to "material issues".

What if the New Instrument provided that a certain type of innovation is not subject to patenting, and an enterprise based in a state party that did not adopt the New Instrument sought to patent that type of innovation in a state party that did adopt it? Under Article 30(4) of the VCLT, the state party adopting the New Instrument presumptively would remain obligated to grant a patent further to Article

27.1 of the TRIPS Agreement. Would Article 27.1 allow the adopting state party to refuse patenting as justified on field of technology differentiation grounds in the sense of the panel report in the CanadaGenerics case? (WTO Appellate Body, 2000).

The lawyers should spend some time working out these integration issues before they arise in a concrete way. This might be a useful area for cooperation among the legal divisions of the WHO, WIPO and WTO.

Multilevel Governance Problems at the Intersection of Trade, Health and the ‘Global Knowledge Economy’ Expanding Institutional Coordination A number of proposals to put global public health on a more sustainable footing involve the creation of new financing mechanisms. None of the WHO, WIPO and WTO are set up as global financial managers. A logical fourth institution is the World Bank, which does considerable work in the field of public health, but largely separate from the Geneva institutions. Other institutions such as the Global Fund, UNITAID and UNICEF are important in the procurement context. Institutions such as UNCTAD work with developing countries on transfer of technology relating to public health. The Gates Foundation has become a major factor in global public health dialogue, and there are a number of nongovernmental organizations, such as DNDi and the Medicines Patent Pool, that are important.

Advocacy NGOs continue to play an important role. There may be a space for the formation of something in the order of a Global Health Coordination Council that could and should help establish priorities and overall strategy for addressing problems of global public health.

Back to the Future From the early 1800s to 1995, nations relied on the principle of national treatment as the means to promote fair trade; and in the 1940s most-favoured-nation treatment was added as a means to promote global stability. The entry into force of the WTO Agreement represented a substantial intrusion into the regulatory sovereignty traditionally enjoyed by governments. This "experiment in intrusion" is not an unqualified success. As the major emerging market countries - Brazil, China, India - begin to behave more like the United States and European Union - content with rules imposed on others, but acting unconstrained for their own accounts - the problems facing multilateral institutions grow more acute. It is not so clear that the principle of national treatment has outlived its usefulness as the bedrock of international cooperation. Reciprocal fairness might be preferable to - or more pragmatic than - collective intrusion.

References Abbott, F. M (2010) An International Legal Framework for the Sharing of Pathogens: Issues and Challenges. Geneva: ICTSD Issue Paper 2010/30.

Abbott, F.M. (2011) 'Intellectual property and public health: meeting the challenge of sustainability', in 23 November 2011 Geneva: Global Health Programme of the Graduate Institute.

Health Action International Global et al. (2001) Consideration of an Essential Health and Biomedical R&D Treaty. [online]. Available from: www.who.int/phi/news/phi_1_joint_submission_en.pdf.

WTO Appellate Body (2000) Canada - Patent Protection of Pharmaceutical Products.

WTO Appellate Body (1998) United States - Import Prohibition of Certain Shrimp and Shrimp Products.

–  –  –

Introduction There is no consensus as to what 'global issues' are, but, when the question is posed, the answer is almost spontaneous: climate change, biodiversity, global poverty, financial stability, trade. Various authors and organizations have attempted a definition of global issues and an enumeration of their key characteristics. The United Nations itself maintains a list of issues perceived as global, without clarifying, though, its selection criteria (World Bank, 2012). Trade, development, and global public goods (GPGs) are issues that merit the characterization 'global'. They have a significant impact on a large number of people across national boundaries; they go beyond the capacity of any one nation to resolve; they are interconnected with each other as well as with other global issues; and, finally, their resolution requires a global regulatory approach because of the global economic and/or social concerns that are at stake (Bhargava, 2012, pp.1–2).





This contribution is situated in this broader debate of globalization, multilevel governance and GPGs, and seeks to examine whether and how international organizations contribute to the administration of GPGs. The case-study of the World Trade Organization (WTO) and the World Bank (including all its affiliates) weaves together four, independent at first glance, narrative threads: GPGs, development, trade and collaboration between international entities. Development and trade could not be classified among the typical GPGs. 1 The former is arguably neither non-rival nor non-exhaustible (pure GPG), whereas the latter is treated only by some as a GPG (club good) (Gardiner and Le Goulven, 2002). Rather, they could be more credibly perceived as global policy outcomes that sometimes suffer, especially in the case of development, from undersupply, which, in turn, gives rise to public bads (fragmented markets, financial crisis, poverty, civil strife etc.) (Kaul et al., 1999). Put differently, GPGs and trade are vehicles to achieving development and, hence, their supply is a key component of development (United Nations Development Programme, 2012).

Global trade and development 'walk hand-in-hand'. Ensuring adequate trade opportunities has inevitable spill-overs in the area of development. The dynamic interlinkage between trade and development plays out in various ways. Over the medium and long terms, increased efficiency and economic growth more or less guarantee poverty alleviation - even the most sceptical ones concede that there is no coherent evidence that trade restrictions boost growth (Rodriguez and Rodrik, 2000, p.317). In the shorter run, though, trade liberalization may induce dramatic changes in wages and prices and entail heavy 'adjustment burdens'2 and infrastructure costs. The other side of the coin is that, * (PhD Researcher) European University Institute, Florence.

Special thanks are due to all participants of the Multilateral Governance of Interdependent Public Goods Conference, Florence, 18-19 February 2011, especially to E.-U. Petersmann for his comments. All errors remain of the author.

The World Bank defines GPGs as “commodities, resources, services, and systems of rules or policy regimes with substantial cross-border externalities that are important for development and poverty reduction, and that can be produced in a sufficient supply only through cooperation and collective action by developed and developing countries” (Development Committee, 2001); Morrisey et al. (2000) define GPGs as “a benefit providing utility that, in principle is available to the global population. They consider three types of benefits: provision of direct utility, risk reduction, and capacity enhancement.” According to the Specific Factors Model, the production factor that is specific to the import-competing sectors will benefit, whereas the factor specific to the export sector will benefit. This is the short-term effect. The Heckscher-Ohlin Model suggests that owners of a country's abundant factors gain from trade, while owners of a country's scarce factors will lose in relative terms. This loss could be neutralized by compensatory measures.

Anna Pitaraki

as it will be shown further on in greater detail, certain deviations from the principles of trade liberalization and multilateralism have been justified in the name of development and developing countries' needs (General Preferences, Special and Differential Treatment etc.).

It is often underscored that GPGs are not state-produced. For the case of GPGs, there exists no market or governmental mechanism appropriate for them (Samuelson, 1954). “There is no mechanism by which global citizens can make binding, collective decisions to slow global warming, to cure overfishing, or rein in dangerous nuclear technologies” (Nordhaus, 2005, p.7). Against this light, various institutional designs have been studied to reduce collaborative failures. In trade and development, there are just as many shades of privateness and publicness, of national and international. Although achieving development remains predominantly a state responsibility, 3 various international organizations, have been charged with the task of promoting it – to mention just a few: i) UN Economic and Social Council (2012); ii) ‘The United Nations Development Programme’ (2012);

iii) ‘The Untied Nations Conference on Trade and Development’ (2011); iv) European Commission (2012). The liberalization of trade, on the other hand, has been entrusted to the WTO, which is an intergovernmental organization, premised upon an agreement between governments to behave in a way that is mutually decided upon and serves members' mutual interests. The application of these economic policies and the distribution of gains deriving therefrom is a matter of domestic politics.

Instead of the traditional conduits of cooperation, horizontal, among states and vertical, among international organizations and their member states, this article offers an insight into the politics and the mechanics of the collaboration between two historically bound yet organically distinct organizations, the WTO and the World Bank. Taking into account the global character of trade and the negative consequences of lack of development, it examines the independent, as well as the common practice of the WTO and the World Bank in the field of development policies (aid, capacity-building, technical assistance) and the potential of these policies to provide GPGs as a joint product. In doing so, it looks at the GPGs problem from a different angle – leaving aside the freeriding problem, it investigates into the multipolarity of actors and policies. Finally, it concludes with an assessment of these collaborative initiatives in constructing a more effective and legitimate governance system for the pursuit of development, despite any asymmetric expectations and different strands of development efficiency.

The first part commences with a description of the mandate, the diverging perception of development and their reflections on the various strategies that each of the above-mentioned institutions have independently applied in this direction. The second part, on the other hand, is dedicated to the joint actions that the WTO and the World Bank have launched together in the area of development. The final part theorizes the need for, the structure, as well as the underlying principles (systemic repercussions) of the interaction pattern between the WTO and the World Bank before setting out a future coherent agenda for development.

The UN Declaration on the Right to Development (UN. General Assembly, 1986) “recognizes that the creation of conditions favourable to the development of peoples and individuals is the primary responsibility of their states”; Article 2, paragraph 3 states that: “States have the right and the duty to formulate appropriate national development policies that aim at the constant improvement of the well-being of the entire population and of all individuals, on the basis of their active, free and meaningful participation in development and in the fair distribution of the benefits resulting therefrom.”;

Article 3, paragraph 1, determines that: “States have the primary responsibility for the creation of national and

international conditions favourable to the realization of the right to development”, whereas paragraph 3 states that:

“States have the duty to co-operate with each other in ensuring development and eliminating obstacles to development.

States should realize their rights and fulfil their duties in such manner as to promote a new international economic order based on sovereign equality, interdependence, mutual interest and co-operation among all States, as well as to encourage the observance and realization of human right”; and Article 6, paragraph 3: “States should take steps to eliminate obstacles to development resulting from failure to observe civil and political rights, as well as economic, social and cultural rights.” Can the 'Development Dimension' of the WTO Be Secured Without Stronger Synergies Between WTO and World Bank?



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