The World Trade Organization is not the villain many of its critics claim it to be, but it does suffer from ineffective compliance tools and a lack of transparency, Vanderbilt University researcher Trish Kelly finds in her new book, The Impact of the WTO: The Environment, Public Health and Sovereignty.
The book is the first to provide a comprehensive analysis of the nine environmental and health disputes that have been adjudicated at the WTO since its formation in 1995. The investigation concludes that the nature and impact of the WTO’s environmental and public health decisions has been misinterpreted and that they have not had a negative impact on the sovereignty of affected nations.
Kelly became interested in this issue because of the widely reported protests and controversy surrounding the WTO.
“From the news coverage of protests against the WTO, I thought its decisions constituted a real assault on our environment and health standards,” she said. “But the disputes suggest that the WTO is not a threat to the environment and public health and that nations retain sovereignty over environmental and health policy.”
Kelly found that several of the WTO decisions that went against the countries imposing environmental restrictions were widely misunderstood.
“Two particular decisions that have received attention, one involving U.S. requirements for turtle excluder devices on fishing vessels that harvest shrimp and another affecting reformulated gasoline standards, were perceived as attempts to roll back U.S. environmental protections,” she said. “In fact, the WTO found that the U.S. may impose these regulations, but must treat all nations fairly. It ruled against the U.S. in the shrimp-turtle case because the U.S. offered technology transfers and financial assistance to some nations but not others. And in the gasoline case, the U.S. imposed higher standards on foreign refiners than domestic ones.”
Kelly found the same sort of discrimination was the basis for the WTO’s decisions in cases involving food safety.
“Several cases reveal that governments use food safety regulations to disguise protection favoring the home nation’s products,” she said. “These cases demonstrate that the WTO’s risk assessment and scientific evidence requirements are necessary to distinguish between legitimate food safety regulations and protectionist ones.”
Kelly points to the closed nature of the WTO’s dispute resolution process as one of the reasons why its decisions have been misunderstood.
“The lack of transparency in the WTO’s dispute resolution process contributes to the suspicion and controversy that surrounds it,” she said. “By opening its proceedings to the public and perhaps by televising them, the WTO would demystify the process and defuse some of the controversy.”
Kelly also found that compliance with WTO rulings was problematic in the disputes she explored.
“A losing country is supposed to comply with the decision. If the losing government does not remove the offending measure, it can compensate the other government, either financially or by providing greater access in other markets. However, ‘losers’ hardly ever do that. As a result, ‘winners’ are forced to retaliate by placing tariffs on other products, which further reduces trade,” she said. “If the parties could agree to move toward a compensation system, that would address this concern.”
WTO members are currently in the process of the Doha Development Round of trade negotiations, which began in 2001.
“The troubled negotiations have broken down a few times,” Kelly said. “At this point, members are trying to come up with concrete numerical targets affecting agriculture and industrial goods. Their goal is to have an agreement at the end of 2008, but progress has to be made soon if they are to meet that goal.”
The Impact of the WTO: The Environment, Public Health and Sovereignty was published by Edward Elgar Publishing in November 2007.
Media Contact: Melanie Moran, (615) 322-NEWS
melanie.moran@vanderbilt.edu