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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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Waiting for global consensus (e.g. among 153 WTO members) had proven to be an unreasonable negotiation strategy, just as the ‘single undertaking method’ and consensus-based amendment procedures of WTO law risked being impractical ‘implementation strategies’.

III. Case Studies on Multilevel Governance of ‘Interface Problems’ of the International Trading, Environmental and Development Systems SECTION III was devoted to empirical case-studies of multilevel governance of the international trading, environmental and development systems, which are horizontally and vertically interconnected and, arguably, share mutually beneficial ‘public goods dimensions’ (e.g. in terms of promoting efficient use of scarce resources and general consumer welfare in all trading countries). The UN Charter had conceptualized development as a collective task of providing global public goods in the framework of international organizations open to all UN member states. Section III focused on ‘jurisdiction gaps’ and related ‘governance gaps’ in the post-war system, such as the institutionalization of the world trading system outside the UN framework (as discussed by Evenett/Dawar), 4 the lack of a Global Environmental Organization (as discussed by Esty & Moffa), the cooperation between the WTO and UN Specialized Agencies (as discussed by Abbott and Pitaraki) and the ever larger number of regional and bilateral agreements filling the ‘gaps’ of worldwide regulation (as discussed by Hartmann and Penca).

UN law and WTO law referred to most of the ‘principles of fairness’ necessary for successful negotiations over global public goods, such as:

principles of reciprocity and mutual advantage, whose precise definition may legitimately vary in particular contexts (like non-reciprocal trade preferences for least-developed countries in the WTO);

principles of equality and proportionality (e.g. regarding allocation of financial contributions, The conference draft paper could not be included into this publication.

–  –  –

‘common but differentiated responsibilities’ in multilateral environmental agreements); respect for needs, acquired rights and for ‘compensatory justice’ (e.g. vis-à-vis former colonial territories); and procedural principles of ‘justice as fairness’ and ‘voluntary acceptance’ (cf. Albin, 2001). Yet, in worldwide UN and WTO negotiations, the pursuit of justice as a ‘balanced settlement of conflicting claims’ (cf. Albin, 2003, 263, 270 ff) was often distorted by intergovernmental power politics and ‘rent-seeking’ efforts (e.g. to avoid the costs of climate change mitigation by refusing reduction commitments for greenhouse gas emissions under the Kyoto Protocol). The emerging ‘triangle of global governance’ - based on the UN, UN Specialized Agencies and the G20 as a ‘Global Economic Governance Executive’ - was discussed in the keynote speech by P. Lamy and the contribution by J.

Wouters & T. Ramopoulos. Yet, both Lamy and Wouters & Ramopoulos also emphasized the ‘legitimacy deficits’ and ‘decision traps’ of multilevel governance in the WTO, the G20 and UN institutions, which call for more participatory, multi-stakeholder decision-making on global public goods involving citizens, civil society and business (as discussed under Section IV).

Multilevel Economic Governance by the G20 The analysis by Wouters and Ramopoulos of The G20 and Global Economic Governance: Lessons from Multilevel European Governance? emphasizes that the G20 is in a powerful position to promote the global common good, and to make it prevail, at times, against a narrow, short-term interpretations of national interests. It is much less clear whether multilevel European governance offers lessons for institutionalizing the G20 as a global governance executive. For instance, the ‘competence catalogues’ of the Lisbon Treaty listing various categories of EU competences (cf. Articles 3-6 of the TFEU,

2009) on exclusive, shared, parallel and supporting competences), and limiting their exercise by constitutional principles (e.g. in Articles 2-6 of the TEU, 2009), neither prevented daily turf battles on shared competences nor newly emerging modes of multilevel governance (e.g. of the Eurozone crisis among 17 EU member states). The 27 EU member states have transferred more legislative and policy powers to supranational institutions than any other group of states. But a comparison of the European Coal and Steel Treaty of 1951 with the 2009 Lisbon Treaty shows that the design of EU institutions evolved through trial-and-error. According to Wouters, it is ‘hard to draw generalizing lessons from this very specific process for the provision of global public goods’ and for the organization of global governance institutions. For instance, does the transformation of the EU Council from a ‘political directorate’ operating outside the EU Treaties (essentially until 1986) into a Treaty institution (TEU, Article 15) offer lessons for reforming the G20 as today’s ‘premier forum for international economic cooperation’? How should the G20 be coordinated with alternative modes of governance (like markets, hierarchical organizations, informal networks)? Should the G20’s currently informal mode of negotiating agreements as a ‘diplomatic club’ in a culture of reciprocity be changed, for instance by creating a permanent G20 Secretariat, transforming the G20 into a ‘Council of Governors’ of the Bretton Woods institutions and the WTO, or by otherwise promoting synergies through regular delegation of tasks to existing or new organizations (like the Financial Stability Board), thereby enhancing decision-making in international organizations (like the WTO) or ‘rebalancing’ and initiating reforms of existing institutions (like the IMF)? Could the ‘representative voice’ and deliberative legitimacy of G20 meetings be enhanced by stronger stakeholder-involvement (such as participation of NGOs) and by offering G20 membership also to the African Union (as South Africa remains the only G20 member from Africa)? Europe’s declining influence in global governance, as illustrated by the European debt crisis overshadowing the 2011 G20 summit at Cannes and by related tendencies to re-nationalize European monetary and debt governance, rendered a ‘Europeanization of the G20’ inspired by principles of EU integration unlikely.





Ernst-Ulrich Petersmann

Multilevel governance of the world trading system The three presentations by S.Evenett/K.Dawar on Regulating International Trade and ‘Sustainable Development’ in the WTO: Lessons from Ten Years of Doha Development Round Negotiations, by F.Abbott on Multilevel Governance Problems at the Intersection of Trade, Health and the ‘Global Knowledge Economy’, and by A. Pitaraki on Can the Development Dimension of the WTO be Secured without Stronger Synergies among the WTO and the World Bank? explore the interrelationships between multilateral trade, health and development governance in the WTO and UN Specialized Agencies like the World Health Organization (WHO), WIPO and the World Bank Group.

Evenett/Dawar gave an overview of the evolution of the Doha Development Round negotiations in the WTO since 2001 and of the many obstacles that continue to prevent a successful conclusion of these negotiations. While less-developed WTO members express dissatisfaction over inadequate commitments by developed countries (e.g. in terms of ‘special and differential treatment’, the ‘enabling clause’, liberalization of agricultural trade and of international movements of natural service providers), the latter criticize the former for maintaining too many welfare-reducing impediments and trade barriers. Certain WTO achievements - like increased ‘trade facilitation’ and ‘aid for trade’, the Advisory Centre for WTO Law assisting less-developed WTO members in WTO dispute settlement proceedings, reciprocal WTO commitments leading to ever more WTO Accession Protocols and WTO plurilateral agreements (e.g. on liberalization of trade in international technology products, financial and telecommunications services, government procurement) – are widely acknowledged. Yet, as long as trade policy-making remains dominated in most countries by protectionist interest groups, claims by governments maintaining trade barriers at home and requesting non-reciprocal trade liberalization abroad are bound to remain contested. In spite of the enormous ‘opportunity costs’ of the failure to conclude the proposed Doha Round Agreements, it remains uncertain whether the consensus-based WTO negotiations among more than 150 countries with often conflicting national and domestic interests will reach agreement on a ‘single undertaking’ by all WTO members on liberalizing and regulating international trade in goods, services, intellectual property rights and ‘sustainable development’. Like most trade economists and diplomats, Evenett/Dawar did not use ‘public goods theory’ for analysing the failures of the Doha Round negotiations. As emphasized in the conference discussions, the actual policy responses of WTO members to the collective action problems in the Doha Round negotiations – such as recourse to ever more free trade agreements and plurilateral agreements (like the 2011 Government Procurement Agreement among 42 WTO members) pending the failure to conclude the Doha Round negotiations – reflect many insights from public goods theories (like the need to exclude ‘free-riders’ and to reform property rights regimes). Since the repeal of the British ‘corn laws’ in 1846, the world trading regime continues to evolve through dialectic processes of unilateralism, bilateralism and multilateralism. Just as the conclusion of GATT 1947 would hardly have been possible without the preceding conclusion of more than 30 trade liberalization agreements by the USA based on the US Reciprocal Trade Agreements Act of 1934, the conclusion of the 1994 WTO Agreement was preceded by dozens of free trade and ‘plurilateral trade agreements’ (like the Kennedy and Tokyo Round Agreements) setting incentives for joining the WTO Agreement.

Conclusion of the Doha Round Agreements may, likewise, be possible only after many more free trade and ‘plurilateral trade’ agreements set sufficient incentives for third countries to join worldwide agreements.

The evaluation – in the contribution by F.Abbott – of the 10th anniversary of the 2001 Doha Declaration on the WTO Agreement on Trade-Related Intellectual Property Rights and Public Health concludes that research and funding for the development, procurement and distribution of medicines for diseases predominantly affecting individuals in less-developed countries have increased.

Nonetheless, problems in providing essential health services remain to be addressed in both developed and less-developed countries. Even though cooperation has improved among the secretariats of the WHO, WIPO and WTO in the field of public health, Abbott notes that governments continue to choose among the alternative fora of WHO, WIPO, WTO, regional or bilateral mechanisms ‘for

Introduction and Overview

securing strategic advantage’. Abbott suggests promoting more cooperation among the legal services of the three Geneva organizations in order to avoid inconsistencies among WHO, WIPO and WTO rules. He also calls for expanding institutional coordination, for instance by involving the World Bank in coordinating new financing mechanisms for promoting public health. Abbott criticizes ‘collective intrusion’ by old and newly emerging powers ‘content with rules imposed on others, but acting unconstrained for their own accounts’. The contribution by A. Pitaraki on cooperation among the WTO and the World Bank in promoting the ‘development dimension’ of WTO rules and policies likewise calls for stronger institutional cooperation and coordination of trade policy and financial policy instruments, as also required by the WTO’s 1994 ‘coherence mandate’ explicitly urging the WTO to strengthen its ties with the IMF and the World Bank in order to promote their common objectives (such as improving living standards, ‘sustainable development’ and international trade).

The analyses of the interrelationships and potential synergies among the legally separate WTO, WIPO, WHO, World Bank and multilateral environmental regimes reveal, on the one side, the need for closer coordination between trade and environmental regulation of emission reductions, border tax adjustments, emission trading systems, subsidies and environment-related goods, services, intellectual property rights and dispute settlement proceedings; on the other side, only certain IMF, FAO and WIPO rules have become explicitly incorporated into WTO law, and the modes of cooperation between the WTO and other UN Specialized Agencies (like WHO, the World Bank) continue to evolve pragmatically.

Multilevel environmental governance The analyses of the interrelationships and potential synergies among the legally separate WTO, WIPO, WHO and World Bank regimes were supplemented by three additional presentations analysing interrelationships between WTO rules and climate change policies and protection of other ecosystems like biodiversity. The contribution by D. Esty & A. Moffa analyses Why Climate Change Collective Action has Failed and What Needs to be Done within and without the Trade Regime. Climate change illustrates the ‘collective action problems’ and potential tragedy of the ‘global commons’ (like the atmosphere): neither can the harmful externalities of national greenhouse gas (GHG) emissions on global warming, sea level rise, changed rainfall patterns and increased hurricanes be successfully addressed by any nation acting alone; nor do countries agree on worldwide disciplines, institutions and the sharing of the related costs and benefits of emission-control necessary for preventing climate change and global over-exploitation of a limited resource. According to Esty&Moffa, the reasons for the failure of the complex web of institutions and programs aimed at mitigating climate change can be grouped into three main categories: (a) political economy considerations; (b) negotiation roadblocks;



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