The WTO's Impact on Human Rights 

 Caroline Dommen [1] 

February 2001

"The WTO violates human rights!"  "The WTO dangerously erodes citizens' interests in favour of commercial interests!"  "The WTO is a veritable nightmare for certain sectors of humanity!" 

These are but a few of the accusations thrown at the World Trade Organisation (WTO) in recent months, as the question whether the WTO violates human rights increasingly attracts attention.  The complexity of the issues involved and the polarisation of the debate means that many are still confused as to whether, how or why the WTO violates human rights, and what can be done if it does.  In order to better understand the human rights issues that arise in the WTO context, one must distinguish (1) between the different functions and actors of the WTO and (2) between the different types of human rights issues that arise.

Identifying the WTO Actors  

  The WTO currently has 140 Members.  Its secretariat is relatively small and based in Geneva.  The WTO's main functions are to facilitate implementation and operation of the WTO Agreements, to provide a forum for trade negotiations amongst Members, and to administer the Dispute Settlement Mechanism (DSM).  The WTO is a "Member-driven" organisation, meaning that any policy initiatives or decisions come from its Members.  The Secretariat has no supranational powers or independent authority from its Members.  The only part of the WTO's work which is not decided on by Members themselves are decisions of the DSM, considered to be the most effective international judicial mechanism in existence today.  A dispute brought by one Member against another will be ruled on by a dispute settlement Panel (a kind of trade court) and then, if the decision is appealed, by the Appellate Body.  Panels and the Appellate Body are composed of independent legal experts, and their decisions are legally binding.  

When faced with a claim that "the WTO" is violating human rights one should look to see who is actually responsible for the violation: the Secretariat, the DSM, WTO Members acting collectively, a particular Member in its implementation of WTO law, or a company which has been able to expand its operations in a country following the entry into force of WTO-related law. 

This article will flag two broad categories of the many ways in which the WTO is claimed to have violated human rights.

Identifying the Issues

(1) Using trade as an enforcement weapon. 

One often hears calls for trade sanctions to ensure respect of a standard  - often a moral standard - abroad.  After the military took over in Burma in 1988, the U.S. state of Massachusetts terminated purchasing contracts with companies doing business in Burma.  The EC and Japan challenged this step before the WTO's DSM, claiming that Massachusetts' selective purchasing law was WTO-inconsistent, basically because it resulted in discrimination against Japanese and European companies.  Human rights groups were very critical of this challenge to Massachusetts' pro-human rights effort, accusing the WTO of impeding steps taken to put pressure on regimes that violate human rights.  In fact, the WTO-related challenge to the Massachusetts law came from the EC and Japan, not from the WTO itself.  And as the EC and Japan withdrew their challenge, the WTO DSM did not issue a ruling on the issue.   

The more important issue this case raises is whether or not it is a good thing for one country to use trade as a means to enforce its standards abroad.  This has been a key question in the trade-environment debate as well as in the trade-labour debate.  The WTO's raison d'être is to avoid arbitrariness, protectionism and discrimination in international trade, which is why it sets strict limits on when and how a country can discriminate between trading partners concerning the same products.  Although in very different ways, the trade-environment and trade-labour debates both came to the WTO with claims that one should be able to use trade to enforce an environmental or trade standard abroad, or that an importing country should be able to discriminate between products on the basis of the way they were produced (favouring imports of products made by workers who are paid a minimum wage, for instance).   

Many WTO Members are resisting opening the doors of the WTO to this kind of unilateral approach.  Many developing countries are already struggling to compete with their more economically powerful trading partners and fear that any introduction of environment or labour standards into the WTO would just be a way of eroding any comparative advantage – such as lower wages – that they have over industrialised countries, further marginalizing them on the international economic scene.  

(2) Trade or trade rules that harm human rights. 

Another way in which the WTO is often said to violate human rights is when its rules, or application of its rules, infringe human rights.  There are many examples of areas of WTO law that pose a threat to human rights, particularly the right to food and the right to health.[2]  The TRIPs Agreement, for instance, requires each WTO Member to provide patent protection on pharmaceutical products.  This reduces countries' capacity to produce generic medicines or otherwise less costly medicines than patented ones.  In other words, TRIPs and other intellectual property-related legislation can reduce governments' ability to ensure that drugs are on the market at an affordable price.  The result of this has been particularly harsh in Sub-Saharan Africa where drugs for treatment of AIDS are still hugely expensive and thus well out of most people's reach.

South Africa for instance adopted legislation in 1997 which enabled parallel import and compulsory licenses but could not implement this legislation after threats from the U.S. Government - at the behest of the U.S. pharmaceutical industry - to resort to trade sanctions over the legislation.  The South African Pharmaceutical Manufacturers Association (PMA) and the European Union also put pressure on the South African Government to revoke the legislation, and the PMA has challenged it in the South African courts.  If their case succeeds and the South African government has to revoke this law, it would probably constitute a violation of the right to health.  Yet in a case like this it is not clear whether it is the pharmaceutical industry or the South African government that should be held liable for causing the South African Government to violate the right to health or the right to life of many of its people.    

Ways Forwards

Lawyers from both the trade and human rights arena usually agree that human rights are fundamental and inalienable and that human rights law should prevail over international trade law.  In practice however greater weight is generally given to trade law given the importance of economic considerations for any government.  When talking about the WTO and its effect on human rights one should nevertheless recall that it is the same governments whose representatives are speaking in the WTO and in the international human rights bodies, and the representatives to different bodies must be made aware of their country's commitments in other areas.  Groups working on human rights, social justice or international trade could do a lot to reduce conflicts between human rights and trade law in future by seeking to build better links between trade and human rights officials domestically.   

Many companies work directly with governments, providing advice or positions on trade-related issues of concern to them, which are then carried forward to the WTO by governments.  Human rights groups would also do well to build links with companies to work towards ensuring that new trade rules or application of existing ones do not violate human rights.  Last but not least, when WTO-related laws or measures clash with human rights, human rights activists should not forget that they have strong tools for seeking redress of violations in the international human rights treaties and their implementation mechanisms.