James Cook University Law Review
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James Cook University Law Review |
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GUIGUO WANG[*]
International development law is a result of international economic integration and the interdependence of the international community. As such, international development law is a set of provisions, principles and norms of a trans-national nature that govern cross-border activities relating to development.[1] With the growing awareness of the importance of development of the international community, scholars have examined the related issues from different angles. Modernization theory, one such effort, regards modernization as a ‘progressive, evolutionary process that would result in the transformation of “less developed” societies into Western political, social and legal institutions’. According to modernization theory, four elements are ‘critical in this transformative process.’ They are rationalization, nation building, democratization and participation.[2] Modernization theory attributes the problem of development to developing countries, the victim of the world economic development for their ‘lack of modern capitalism’.[3] In this regard, dependency theory offers a sharp contrast by criticizing the world economic system rather than its victim. According to dependency theory, ‘extractive and exploitative neo-colonial economic relations between the developed and the developing world lay behind the ‘underdevelopment’ of developing nations.’[4] Therefore, the theory supports ‘nationalization, import substitution and other forms of protectionism in support of nascent industries’. From a historical point of view, the New International Economic Order (‘NIEO’)[5] that originated from the framework of the United Nations represents the majority view of developing countries in the 1970s and 1980s. The theory emphasises reparations for past colonial wrongs and establishment of a new legal regime.[6] It argues that ‘[p]ast inequities were reinforced through the imposition of unequal legal treatment between the ‘haves’ and ‘have-nots’. The disparate legal treatment of these two categories of sovereign states tended to perpetuate, rather than ameliorate, the inequities between them.’[7] Still others argue that international development law is not new but instead is a part of public international law. In their view:
[D]evelopment as a principle of international law merely covers efforts of States, i.e. their co-operation for the elaboration of civil, cultural, economic, political and social standards, embodied in the Charter of the United Nations and the International Bill of Human Rights, based upon a common understanding of the generally recognized human rights and the principles of public international law concerning friendly relations and co-operation among States.[8]
All the above theories tackle the issue of international development law from different perspectives and with different emphasis. In analysing the evolution of international development law and its impact on other allied branches of law, attention must be paid to the ever-increasing interdependence or globalization of the international community at the turn of the last century marked by the establishment of the World Trade Organization (‘WTO’) and other regional arrangements. An important aspect of the economic globalization is the moving of international norms into national boundaries. Some believe that through the process of globalization:
[T]he fundamental source of conflict in this new world will not be primarily ideological or economic. The great divisions among humankind and the dominating source of conflict will be cultural. National states will remain the most powerful actors in world affairs, but the principal conflicts of global politics will occur between nations and groups of different civilizations. The clash of civilizations will be the battle lines of the future.[9]
Against this background, international development law has gained a new life and new dimensions. This article examines, from the New Neo-Confucianism (in Chinese, Xin Li Xue) point of view,[10] the relationship between international development law, public international law, and national laws against the background of globalization. Thus, this paper first will discuss briefly the essential features of law, followed by the development aspects of public international law and finally the impact of international development law on national laws through the process of globalization.
In Neo-Confucian philosophy, ‘[e]verything in the world can be comprehended by means of the Li (Principle). If a thing exists, there must be a law to it. That is, for each thing, there must be a governing Principle (Li).’[11] ‘Hence the coming into existence of men and things must be endowed with Principle before they can have their inherent natures; they must at the same time be endowed with matter (emanative material force)[12] before they can have the material form.’[13] There must be a reason (Principle) for the existence of everything and everything must exist according to the Principle. Also everything belongs to a certain category of things. The nature of the given thing determines to which category a given thing belongs. The nature of a thing reflects the Principle according to which it was created and exists. Although things may follow more than one Principle, there must be one main Principle that followed for a given thing. Accordingly, everything is of one main nature so as to reflect the category of to which it belongs. The same principle applies to international development law. In order to be law or to be called law, international development law must follow the general Principle of law and must contain the nature of law. In other words, to examine the relationship between international development law, international law and national law, one must first determine the general characteristics of law and particularly of public international law.
Starting from Aristotle’s time onward, commentators have emphasised the universality and neutrality of law. According to these philosophers and jurists, law, once it is enacted, must be applicable and applied to all the members of the society including the lawmakers. As such, although law is adopted by individuals with feelings and emotions, as the rule governing the entire society, its enforcement is without passion. In other words, law must be neutral and objective insofar as those subject to it are concerned. This is very different from the view of the ancient Legalists in China[14] who advocated that the law should only be applied to ordinary people but not high ranking officials.
In the history of the mankind, numerous attempts were made to define what the law was. Yet, as stated by Hayek, there has been no consensus on the subject:
What we know about pre-human and primitive human societies suggests a different origin and determination of law from that assumed by the theories which trace it to the will of a legislator. And although the positivist doctrine stands also in flagrant conflict with what we know about the history of our law, legal history proper begins at too late a stage of evolution to bring out clearly the origins.[15]
Although scholars from different countries with various cultural backgrounds and history may differ in their research methodology and focus, they agree that law must be enforced with the compulsory force of the authorities and applied universally within society. It is also generally agreed that law must reflect society’s belief of fairness and justice at the time of adoption.
What then are the features of law?
In any society, the law being law is because it is a norm governing the acts of the society members, which is concerned with public interest and must be observed. Although the majority of the society may understand the need of law and is willing to be bound by it, it is unavoidable that a handful of people may violate it. Therefore, without a combination of the external compulsory force and the legal means, the effectiveness of the law cannot be guaranteed. Even in a society where state government is not yet established, such external compulsory force is indispensable, and is also endorsed by the society and accepted by the members thereof. The difference between such a society and a state with centralized power is that the mechanism of external compulsory force may not be perfect or is diversified and not centralized.[16]
Any law must reflect the will and interest of the society concerned yet at the same time it may favour a group of people or some sectors of the society. With the development of the economy and in particular the integration of the world economy, the social formation and the level of the rule of law will change and improve. Such changes will affect the views of the members of society including scholars’ research methodology and understanding of legal values.
The Whole of all types of social organizations exists all the time without any change. The actualization of any type of organization, however, requires the presence of the principal and subsidiary causes. The most important among these causes is the material basis which is the pre-condition for the coming into being of the social organization concerned.[17]
Law is closely connected with the state. Any discussion of the nature and characteristics of law must involve the study of the sources of law. Without the state, modern law might not exist. How then did the states come into existence? The Mohist School in ancient China made some insightful comments:
In ancient times when there was neither punishment system nor government, there were different interpretations of everything. One person might have one opinion toward a matter, whilst two persons might have two views toward the same matter, and ten persons with ten opinions. As there were many people, there could be many interpretations of everything. Everyone used his own ‘correct’ interpretation opposing that of others. As a result, the society was full of confrontation. At home, father and son could not get along nor could the brothers. In the society, people used poison, set fire and let out flood to fight against each other. … The chaotic society was like the jungle of animals. Eventually people realized that the reason why the society was chaotic was because there was no leader running the society. They therefore selected the person of virtue as their emperor.[18]
This is perhaps the closest description of the virtuous person politics advocated by Plato.[19] The difference is that whilst in Plato’s view, the virtuous person should be the law, the Chinese theorists believed in the government of the sage. In any event, the emergence of states brought together people from different races and groups and accommodated them in a community called country, and its members became citizens thereof. Moral norms became standards of behaviour and law became the rules regulating people’s action and inaction. In other words, without establishment of countries, people’s behaviour could not have been judged in accordance with moral standards nor could it have been regulated by the law. Some scholars even maintain that: ‘The law co-existed with social authorities. Before and even after the existence of countries, as long as there is an authoritative institution in the society, there must be a law regardless whether there is any special interest group.’[20] The above comments define law broadly.
An examination of the nature and characteristics of law must take into consideration the community or jurisdiction concerned. This is because:
Any action, either being that of an individual or of an organization, cannot be judged as moral or immoral without the background of the society where it is done. … For those who do not recognize that there is a society composed of and above the states, the actions of any country or state cannot be judged in accordance with morality of the international community. As they assume there is no society above the states it does not matter whether an action of a state is in compliance with the basic rules derived from the Principle. Therefore, such an action of the state cannot be judged as moral or immoral. To say that an action of the state is immoral is actually speaking from the point of view of the society which is above the states.[21]
It should be pointed out that ‘morality’ is a yardstick used to judge whether certain actions or things are comply with societal norms. In legal sense, it can be said that only in a concrete society with specific norms or rules, can an action or thing be judged as legal or illegal.
Laws are closely related to morality and justice. To some, law must express morality and justice. Some believe that law and morality cannot be separated.[22] Others consider the relationship between law and morality as that between established law (what the law is) and what the ‘law ought to be’.[23] Undoubtedly there is a close relationship between law and morality. Most of the time and to a large extent law reflects the morality of the society concerned. Nevertheless, this does not mean that law and morality are the same or belong to the same category of things. It is equally wrong to consider law as what the ‘law is’ and morality as what the ‘law ought to be’. If morality were what the ‘law ought to be’, then moral standards would be and must always be higher than that what is required by the law. In every society, moral norms and legal requirements change from time to time. Sometimes, such changes are progressive and positive and sometimes retrogressive or negative. Moral norms, in certain cases and at certain times, may be left behind by the law. Could we then say that the standard of what the ‘law ought to be’ is lower than what the ‘law is’?
It is therefore fair to say that law and morality are related but are distinguishable from one another. Firstly, law regulates the external actions of the members of the jurisdiction or society in question but not their internal movements of thoughts. Moral norms however ‘govern the innermost being of the people, in particular, their motives, virtues and evils’.[24] This argument is similar to the views expressed by some Western scholars.[25] Additionally, normally, law grants rights (a balance of rights and obligations is necessary in the relations amongst people), while morality emphasises responsibilities. ‘The enforcement of law is backed by force, whilst observation of morality cannot be enforced in the same manner.’[26]
Regarding the nature of morality, Professor Feng Youlan made some eloquent comments. In his view, the observance of the order of morality:
[I]s not tempted by external reward or personal happiness. It is not a means to reach that objective either. We observe moral orders because we respect them. There is no other motive. It is imposed on us by our rational faculty and constitutes the expression of our nature which is deep down in out heart. The rational faculty of morality is not a settlement of happiness and sufferings, it is a reflection of
justice in our heart, which points out that living in accordance with morality is the purpose of living and also the condition of living.[27]
According to the New Neo-Confucianism, that which is regulated by law is of the sphere of utilitarianism, while that which is subject to moral norms is of the moral sphere. The action or omission of action by the person who is in the sphere of utilitarianism ‘aims at gaining benefit for his own’.[28] The benefit-seeking here is not like the instinctive impulse of animals. The person in the sphere of utilitarianism seeks benefits conscientiously with specific purposes. ‘He understands what he is doing. He does what he is doing conscientiously. He acts either for increasing his own wealth, for developing his own career or for improving his own reputation.’[29] The person in the moral sphere does everything for the sake of righteousness. ‘The benefit and righteousness are mutually opposite and complementary to each other. Any one who acts for his personal gains is for a personal benefit. Any one who acts for the benefit of his society is for the righteousness’.[30] As most people act for their own interests, the law prohibits people from seeking their own benefit at the expense of others. From this perspective, law should be considered as the lowest moral standard.[31] In other words, what the law requires is that people follow and obey. The law does not prohibit people from pursuing their own interests as long as they obey the commonly applied rules.
To say that a certain thing or action is moral or righteous in fact is relative and must be confined to a society. A thing or action, which is considered as moral and righteous in one society may be regarded as immoral and unrighteous in another. Where individual constituencies of a society are considered one by one as an independent sub-society, it is easy to realize that something which complies with the norms of law and morality of a sub-society may in fact violate the norms of law and morality of the society to which it belongs. Chuang Tzu’s discussion on a dialogue between Zhi, a legendary leader of an insurrectionary army in ancient China and his apprentice illustrates this point. Chuang Tzu states:
An apprentice of Zhi asked him, ‘Is there any moral norm for robbers?’ Zhi replied, ‘how could robbers survive without moral norms? A robber who vainly thinks about the treasuries in a house is a sage. He who breaks in first is brave, withdraws last righteous, knows whether a robbery can succeed cognizant, and divides treasuries fairly and equally fair and kindhearted. Without observing these five moral norms, it is impossible for a robber to become a leader of robbers. Therefore, it can be concluded that without following the norms of the sage, a kindhearted person cannot attain a respectable position, and that without following the norms of the sage, a robber cannot be successful.[32]
Needless to say, robbery is unlawful and immoral in any civilized society. The braver and better a robber leader is, the more dangerous the person is and the more serious the punishment the person should be subject to. Yet, among robbers themselves, the same person is viewed differently because of their different moral value. Applying this theory to the international community, it can be said that certain things considered illegal and immoral by the international community may be considered legal and moral by the laws of a member country. The reason for this is that laws and norms at the international level are different from those at the national level.
Under the New Neo-Confucianism, the absolute ‘law ought to be’ is the norms governing the behaviour of the people of the sphere of transcendent. Those belonging to the transcendent sphere:
act for the whole universe. In addition to the whole (sum total) of their society, they also understand the whole universe. Only when a person understands the whole universe, could his human nature be fully exploited as a human being. Those of the sphere of transcendent understand that they should not only contribute to their own society but also to the universe. A person should not only live with dignity in his society but also in the universe. His action is not only related to a society but also to the universe. Although a person is only seven-feet tall, yet his moral realm can be as high as the heaven. Although a person may not live a life for more than hundred years, yet his influence can be as everlasting as the sun and the moon as well as the world.[33]
The sphere of transcendent is the highest sphere. The people of the transcendent sphere are those with the highest moral cultivation, i.e., sages. The ‘law ought to be’ should be the norms that can fully exploit the nature of the law which govern the behaviour of those people of the highest standards, i.e., the transcendent sphere. Those of the sphere of transcendent have the broadest vision of the universe. To borrow a Mohist School saying, these people are able to ‘ramble with morality’; ‘rambling at the common source of all the myriad things, treating all the myriad things as things, but don’t let the myriad things treat you as a thing’.[34]
Only those who have attained the sphere of the transcendent can fully exploit the nature of human beings. Only the law which is compatible with the circumstance of the transcendent sphere, i.e., the absolute ‘law ought to be’ can actualize the nature of law, i.e., the fulfilment of the Principle of law. Moral norms or morality exist in the sphere of the unselfconsciously natural, the sphere of utilitarianism, the sphere of morality and the sphere of the transcendent. The acts of those in the sphere of unselfconscious nature may be same or similar than those in the sphere of the transcendent. Nevertheless, the former act without consciousness while the latter act consciously and with specific purposes. It is equally true that the moral norms of each of the spheres differ. In fact, even in the same sphere but at different time, the moral norms may still differ. There is therefore no such a morality or moral norm that is absolute, eternal, priori and applicable throughout the history of the mankind. The moral norms and values exist only in relative terms.[35]
Law must reflect justice or the belief of justice. Yet there are many ideas as to what is just and unjust.[36] Generally speaking, the concept and contents of justice differ from society to society and from time to time. People in different spheres of life may also have different views regarding justice. According to Rawls, ‘for us the primary subject of justice is the basic structure of society, or more exactly, the way in which the major social institutions distribute fundamental rights and duties and determine the division of advantages from social cooperation.’[37]
Pythagoras, a Greek philosopher compares justice with a square, arguing that the concept of justice is like the basic form multiplier. For instance, four indicates the concept of equal distribution. If we develop this concept further, it becomes more significant. In contrast with a circular which is without any angle, a square has four angles. A circular represents smoothness and compromise, a typical feature of kindheartedness in Chinese culture; its characteristic is self-controlled, modest and harmonious. On the contrary, a square by its very nature has several angles and in a natural position to challenge and resist other things. It is therefore understandable that justice has a tendency to challenge others in order to enforce its belief, while the kindheartedness of morality tends to respond passively in advocating its belief. In other words, justice in legal sense is backed up by force, while the kindheartedness of morality, with love as its eternal pursuit, favors invisible force[38]
This passage eloquently describes the characteristics of justice and the differences and similarities between morality and justice.
Justice is also closely related to equality. Justice therefore can be ahead of or behind the law. What is just today may not be considered as just tomorrow and what is regarded as just in one society may not be treated as just in another society.[39] In any event, justice is important to the establishment and maintaining of the legal order of every society.
A legal system is a coercive order of public rules addressed to rational persons for the purpose of regulating their conduct and providing the framework for social cooperation. When these rules are just they establish a basis for legitimate expectations, they constitute grounds upon which persons can rely on one another and rightly object when their expectations are not fulfilled. If the basis of these claims are unsure, so are the boundaries of men’s liberties.[40]
Therefore, law that can fully express justice is the law reflecting its nature in absolute compliance with the Principle of law. In practice, there may be very few, if any, laws that reflect the true nature of law. However, there are laws relatively in compliance with the Principle of law. The closer that the laws comply with their Principle, the more advanced the society is. In general there must be a long period of evolution for the laws to fully reflect their Principle or to be in compliance with their Principle.
An examination of the international development law should take the same approach. In the first place, international development law refers to the set of principles and norms that have the characteristics of law or contain the main nature of law. In other words, such principles, provisions and norms must have the binding force on the members of the society concerned.[41] Secondly, international development law is the law of the international community.[42] It therefore belongs to the category of law applicable to the international community that regulate the behaviour of states, international organizations and multinational corporations. Thirdly, international development law is still evolving and therefore although a given practice, resolution or provision may not have gained consensus as an international norm, it may represent the trend for the development of legal norms in the field. Such norms should be treated as the law ought to be and not be disregarded right away. For instance, a given practice may come from the consideration of morality rather than demand of a legal obligation. With time, however, such practice may become a norm with binding force. The World Trade Organisation (WTO) is a case in point. The importance of the WTO in the international community is unquestionable. What is most important is not that it covers almost every economic aspect of the international community. Its importance lies in the fact that it does not allow its members to make any reservations to its agreements including the obligations in connection with the special treatments and rights of developing countries. In the past such special considerations were regarded as based on morality rather than on law. Fourthly, with the increasing globalization of the world economy, norms of international development law are gradually moving into the sphere of the national laws of sovereign states. This however does not change the nature of international development law as the law of the international community. What then are the differences and similarities between international development law, public international law and the national law of the sovereign states?
The starting point in examining the relationship between international development law and public international law is whether international law belongs to the category of law. The international community has not yet developed into a society with all the characteristics of a country. Its systems, including its legal system, are not highly developed or well established. However, it is not appropriate to compare the international community with a national society, as the former has its own characteristics. If today’s international community is compared with a national society in a primitive stage, it is easy to realize that despite its achievements, the international community we are living in is still in the process of evolution from the elementary stage to a more advanced level, from a society with imperfect systems to the one with more mature and better mechanisms. National society and an international society belong to different categories. The Principles according to which the two societies came into being and exist are different. Therefore, the laws of these two different societies also differ.
As mentioned above, the basis for the creation of countries was the need of the people for survival; in an organized society like a country, where some common norms are established and observed, the potential of the people can be better developed and everyone can be better off.
Since we are living in the same world, nobody can pursue his happiness without the influence of others. For the sake of happiness of oneself, one must be on good terms with others and help others with the expectation that others will help him. At the same time, for the sake of one’s own happiness, one must restrain his desires and suppress any want that may lead to bad results. This is the result of the rational order of the people. But the basis is to maximize happiness of all the people.[43]
In other words, whilst everyone restrains himself for the purpose of maximizing his own potential, the society as a whole is in good order. Of course, self-restraint cannot be effective without commonly accepted norms or rules nor without enforcement mechanisms of such norms.
At the time when there were human beings but had no social organizations, people could do anything for themselves without restraints. The result was that the whole society was scrambling and tumbling. In such a world, nobody could survive. Luckily, although human beings did not come to this world with morality, they were born with sense. They knew that the endless fight for self-interests would ruin their own lives, i.e., nobody could do anything for himself. Therefore, they agreed on a set of rules for the community, which stipulated that everyone had the right to work for his own interest but must be done within the stipulated limits. They also agreed on another set of rules to govern the above-mentioned rules. Many philosophers including Mo Tzu, Chuang Tzu and Western philosophers all supported this theory in their discussions on the origin of societies, countries, law and morality.[44]
The theory regarding the origin of country and society to some extent can explain the coming into being of the international community. If every country could exist without any contact with others, the international community is meaningless. It is the interdependence among nations that make the formation and existence of the international community possible. The interdependent relationship among nations grows ever closer with the development of science and technology. This interdependence stipulates the necessity for countries in the world to cooperate. In a world dominated by interdependence, no country, by itself, can manipulate the international community, nor can a country fully develop its potential without the co-operation of others.
In the past, the binding force of international law was questioned, because the international community, unlike national society, has no legislature nor does it have a judiciary for enforcing international law. Accordingly international law should not be regarded as having the nature of law.[45] The above conclusion was drawn out of the failure to consider international law as law at the level of international community. International law as law is a matter of fact and is the result of the interdependence among nations. Such norms came into being together with the formation of the international community just like in the case of national law and nations.
The states of the world do together constitute a body bound together through common interests which create extensive intercourse between them, and differences in culture, economic structure, or political system, do not affect as such the existence of an international community as one of the basic factors of international law. [46]
In examining the nature of international law, the characteristics of law, i.e., the main nature of law must first be scrutinized. [47] As discussed earlier, the basic features of law include its prescribed applicability and binding force. As to whether or not a norm or provision is enacted by the legislature is not as important. This can be explained from the practice of the common law countries where judgments have the binding force as precedent. Could one then say that in those countries courts are legislative bodies? The fact is that although there is no one supreme body in charge of law-making in the international community, there are such bodies scattered in different multilateral organizations. The Security Council of the United Nations, the Ministerial Meeting of the World Trade Organization and the Board of Governors of the International Monetary Fund and World Bank are some of the examples. In fact, even in national societies where there is a supreme law-making body, the law-making power is still shared by other bodies.
In addition to the prescribed applicability and binding force, other features of law include: firstly, law is a collective representation of the will of the society concerned, that is it represents the common will and common interests of all the members thereof. The basis of the common will is the interrelationship of all the members and maximization of the interests of the members; secondly, law, in regulating the relations of the members of the society concerned, is above all the members including the ruling persons and those ruled.[48]
The principle that law represents the common will of the society concerned is in compliance with the principle that all powers are from the people and for the people. Legislators are representatives of the members of their society and therefore what they do constitutes the act (indirect) of all the members thereof. Members of the society, through their representatives, make laws and thus indirectly participate in law making. This is in fact similar to the fact that all members of the international community participate in making international law and are bound by such laws. Some even argue that the common consent of all the countries as the basis of the binding force of international law.[49] They have pointed out that:
This ‘common consent’ cannot mean, of course, that all states must at all times expressly consent to every part of the body of rules constituting international law, for such common consent could never in practice be obtained. The membership of the international community is constantly changing; and the attitude of individual members who may come and go must be seen in the context of that of the international community as a whole, whilst dissent from a particular rule is not to be taken as withdrawal of consent to the system as a whole.[50]
Therefore, the law-making process of the international community proves that international law has the characteristics of the legal norms governing the relations of the international community.[51]
International law, like national laws, does not only restrain the actions of its subjects but also provides rights to them. As the Permanent Court of International Justice pointed out in the ‘Lotus’ case:
International law governs relations between independent States. The rules of law binding upon States therefore emanate from their own free will as expressed in conventions or usages generally accepted as expressing principles of law and established in order to regulate the relations between these co-existing independent communities or with a view to the achievement of common aims. Restrictions upon the independence of States cannot therefore be presumed.[52]
Clearly, international law has the main characteristics that the law has including the prescribed applicability and legally binding force. It therefore should and must be categorized as law. Needless to say, international law is still different from the national law, for the society where the former is applied is different from the latter. They therefore are two different sub-categories of law. They are, as law, similar with each other, and at the same time, as laws applied in different societies, differ from each other. Their similarities represent their common nature of law in realizing the Principle of law. From the point of view that international law and national law are two sub-categories of law, they have different natures and follow different principles. Perhaps because of the above reasons, nowadays there is almost no jurist who still questions the binding force of international law.
Hand in hand with the evolution of international law, international development law has emerged as an important component of the law governing the behaviour of the members of the international community. Yet, different from traditional international law, international development law provides opportunities ‘for a new kind of reciprocation or mutuality’[53] among all the sovereign states and other players. Under this scenario, ‘an obligation rests on each party to do or permit the doing of something in consideration of the other party’s act or promise; neither party being bound unless both are bound’.[54] It thus reflects the nature of law more than the traditional public international law as far as the aspects of justice and equality are concerned. The NIEO is self evident in this respect.
The case law on the evolution of international development law however is not as satisfactory. This can be seen from the Nicaragua v US case in which the International Court of Justice gave its opinion on the question of states’ responsibility in connection with development. In its analysis of the alleged violations of the 1956 Treaty of Friendship, Commerce and Navigation (FCN Treaty) between Nicaragua and the USA in respect of customary international law, the Court held:
The cessation of economic aid, the giving of which is more of a unilateral and voluntary nature, could be regarded as such a violation only in exceptional circumstances- The Court has also to note that, by the very terms of the legislation authorizing such aid (the Special Central American Assistance Act, 1979), of which the Government of Nicaragua must have been aware, the continuance of aid was made subject to the appreciation of Nicaragua's conduct by the President of the United Stares. As to the opposition to the grant of loans from international institutions, the Court cannot regard this as sufficiently linked with the 1956 FCN Treaty to constitute an act directed to defeating its object and purpose.[55]
Thus, the Court adopted the view of the 1984 UNITAR study on the principles and norms of international law relating to NIEO, in which it stated:
In fact, in spite of a certain regularity in the flows of assistance, it is difficult to maintain that they have given place to a concrete normative proposition, specific as to their content (level) or individualized as to their destination (or beneficiaries). In other words, though each developed country devotes a certain amount of resources each year to development assistance, and each developing country receives every year from diverse sources a certain amount of assistance and may rely on it, it is not legally possible yet to assert that there is a legal obligation resting on the former with a corresponding right in favour of the latter.[56]
The establishment of international legal norms however may not depend on the unanimous consent of all the countries in order for the said norms to be binding and operative, although state practices are prerequisites for the formation of such norms. The general acceptance and consensus of the international community should enable the norms to be binding on all the states, including those which come into existence after the formation of the norms. Otherwise a lot of well recognized international law principles will become challengeable and the international community will not have any order. This principle is certainly applicable to international development law.
What has happened subsequent to the above ruling of the International Court of Justice demonstrates that issues of economic development are most important to the international community as a whole. They are not only concerned with developing countries, but also developed countries. They do not only involve economic development, but also peace and security of the world. So are the norms and principles relating to development.
The principle of development may be said to express an emerging opinio necessitatis that alleviation of absolute poverty can no longer be dealt with as a matter of charity: Besides generosity, what is necessary is rationality, an understanding and a conviction on the part of both the developing and the developed countries that it is in the interest of all of them to co-operate in the development process because, as has been widely said, development is the new name for peace.[57]
The principles in respect of sustainable development are the case in point. Sustainable development has become a focal point because it is directly connected with the United Nations Conference on Environment and Development in 1992. The Rio Declaration on Environment and Development and other related documents which were adopted by more than 177 countries (including European Union) prescribed in principle on environmental protection and the legal responsibilities of sovereign states and proposed to include sustainable development in the principles of international law.[58] Currently sustainable development as a principle of international law is gradually gaining wide support and recognition. For example, in the case between Hungary and Slovak on Danube Dam, both parties referred to sustainable development as an international law principle in supporting their own arguments.
One of the aims of sustainable development is to balance the economic development and environmental protection, that is every country should have a far-sighted vision in economic development and not let future generations suffer from what they do today. Therefore, sustainable development is not an internal affair of any country as it concerns global strategies and objectives. In today’s international community, whose main members are sovereign countries, the principle of sovereignty[59] must be respected whilst the principle of sustainable development is maintained. Up to now, the content of sustainable development as a principle of international law is not yet adequately substantial or precise. This, however, does not affect its existence as a principle of international law and international development law. Just like the principles of equality and fairness, although the principle may not be precise, its application in specific cases is without problem which actually enriches its contents. Some argue that sustainable development is an evolution of traditional international law principle and not a major change to the existing international legal system.[60] The wide recognition of the international community, however, demonstrates the natural link between the traditional international law and contemporary development issues, which is exemplified by the WTO. This again proves the inherent nature of international law and international development law.
The right to sustainable development has been said to be part of the natural law and an inalienable right of a peremptory nature. Needless to say, no right is without restraints. So is the right to development.
The right to development does, however, have certain limitations inasmuch as it cannot be asserted at the expense of the community or even at the expense of neighbouring States whose prospects may be jeopardized. For example, a State cannot, in the name of development, proceed to applications of nuclear energy in such a way as to harm the environment and imperil human life, whether in the immediate neighbourhood or in the surrounding region. The implementation of development activities must be carried out in a sustainable fashion.[61]
Conditions for the right to development have also been put forward, which include:
(a) the need to safeguard the environment, seen as an inseparable global unity; (b) the need to scientific conservation of natural resources and to plan their utilization according to their availability (both national and international); (c) the need to consider future generations, and to prevent resources from being selfishly depleted to the detriment of posterity; and (d) the need to consider safety, and to ensure that development does not entail harm and cause damage to human beings wherever located.[62]
Over the last decades, the importance of sustainable development which has been given recognition by many countries and international organizations is often referred to as a legal ground by both plaintiffs and dependents in international and domestic dispute resolutions.
A common feature of the general principles concerning natural resources and environmental interferences is that they are, in every case, applicable to all instances of the use of a natural resource or of an environmental interference in any part of the world - whether North or South, developing or developed. It follows that these general principles do not merely apply in areas beyond the limits of national jurisdiction and in the transboundary context, but are also applicable in the entirely domestic domain - an area which, according to traditional international law, is subject to the exclusive jurisdiction of States.[63]
Another important aspect of the evolution of the law relating to development is to give the developing countries special treatment.[64] The Generalized System of Preferences (‘GSP’) is trade preferences given by developed countries to the developing counties. Under this system, developed countries may unilaterally reduce or eliminate the tariffs of the processed or semi-processed goods from developing countries.[65]
The Uruguay Round has improved significantly the special and differential status of developing countries, under which the least-developed countries are categorized into a separate category and are given even more special treatment. The Preamble of the Marrakesh Agreement Establishing the World Trade Organization also stipulates that the WTO members shall conduct their relations in the field of trade and economic endeavour:
with a view to raising standards of living, … while allowing for the optimal use of the world’s resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development.[66]
In the tuna case between the United States and the European Communities,[67] the panel report stated that, ‘The Panel noted that the objective of sustainable development, which includes the protection and preservation of the environment, has been widely recognized by the contracting parties to the General Agreement.’[68]
Apart from the provisions on the special interests of the least-developed countries, the negotiating parties of the Uruguay Round adopted two decisions, namely, Decision on Measures in Favour of Least-Developed Countries and Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing Developing Countries.[69] These two Decisions serve as the legal basis for the continued enforcement of GSP.
Before the Kennedy Round, only Article 18 of GATT 1947 dealt specifically with the rights of developing countries. It provided that the progressive development of the economies of all the countries, especially that of the low-income countries, could facilitate the attainment of the objectives of the GATT. Therefore, to implement the domestic economic development plans and economic policies, the low-income or newly developing countries should be allowed, when necessary, take protective measures, including flexibilities in tariffs and quantitative restrictions.[70] Countries with low standard of living and whose economic development still at an infant stage had the right to take measures inconsistent with the GATT so as to assist the establishment of the domestic industries and solve the balance-of-payment difficulties.
The GATT was amended at Kennedy Round by adding Part IV which included Articles 36, 37 and 38. Article 36 provided the principles and objectives of the treatment of developing countries. Similar to the preamble of international treaties, Article 36 first stated the reasons for the enactment of Part IV, then explained the necessity for promoting or extending the economic and trade development of developing countries. Para 8 of that Article reinstated that when developed countries negotiated with developing countries on tariff reduction or elimination or other trade restrictions, they should not expect reciprocal treatment from the latter.[71] It also stipulated that for the purpose of satisfying the needs of trade and economic development of developing countries, the Contracting Parties should consciously and purposively reduce or eliminate tariff and other trade barriers.[72]
The GATT Contracting Parties also agreed that ‘every effort shall be made to reduce barriers to exports of the less-developed countries, but that developed countries cannot expect to receive reciprocity from the less-developed countries.’[73] Article 37 related to the commitments of developed countries, including a number of the provisions of the Action Plan. Paragraph 1 stipulated the substantial content of the commitments of developed countries and required developed countries ‘to the fullest extent possible’ perform their obligations. Therefore, developed countries should strive to reduce or eliminate barriers on products exported from developing countries, including customs duties and other unreasonable export restraints which differentiated unreasonably between such products in their primary and processed forms. Article 37.1(c) referred to the effect of fiscal measures (mainly domestic tax) of developed countries on the primary products in raw or processed form, wholly or mainly produced in developing countries. The provision required developed countries to give priority to reduce or eliminate financial measures when enacting or amending the financial policies and should not re-introduce such measures. Article 37.1(c) mainly targeted at tropical products but all the commitments were conditional upon ‘to the fullest extent possible’, which undermined the effectiveness of the provision, making its enforcement depend to a large extent on the willingness of developed countries.
Joint actions were the core content of Article 38. The Article expressly stated the items that needed to be taken by joint actions, including development plans, financial aid, examination of the rate of growth of the trade of developing countries, international cooperation, adjustment of national policies and regulations and stimulation of imports. It also stated that to realize Part 4 of the GATT, including the principles and objectives of Article 36, the GATT Contracting Parties should establish institutional arrangements. This provision finally became the legal basis for the establishment of the Committee on Trade and Development. The primary task of the Committee[74] was to monitor the implementation of Part IV of the GATT,[75] such as reduction and elimination of trade barriers.
In addition to Part 4, another measure taken before the Uruguay Round which has positive impact on developing countries is the Decision on Differential and More Favourable Treatment, Reciprocity and Fuller Participation of Developing Countries adopted on 28 November 1979, [76] commonly known as the Enabling Clause. The most important effect of the decision is to provide a legal basis for the implementation of the generalized system of Preference (GSP).
When the WTO was established, GATT together with its Part IV on the treatment of developing countries was readopted as GATT 1994. Other agreements of the WTO including the GATS, TRIPS, USD, the Agreement on Agriculture, the Agreement on Safeguards, all contain special provisions requiring the developing members to assume fewer obligations or giving the developing members preferential treatment.[77] It is not difficult to see from the provisions of the WTO agreements that, despite the substantial difference between the special arrangements for developing countries and their actual needs, compared with the former GATT, the Uruguay Round system in fact has improved significantly the special and differential status of developing countries, under which the least-developed countries are categorized into a separate category and are given even more special treatment. Apart from the provisions on the special interests of the least-developed countries, the negotiating parties of the Uruguay Round adopted two decisions, namely, Decision on Measures in Favour of Least-Developed Countries and Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing Developing Countries.[78]
Decision on Measures in Favour of Least-Developed Countries to a large extent, has restated the Enabling Clause. It requires all Members to take measures to ensure effective participation of the least developed countries (LDCs) in the world trade system.[79] Decision on Measures in Favour of Least-Developed Countries stipulates that LDCs ‘will only be required to undertake commitments and concessions to the extent consistent with their individual development, financial and trade needs, or their administrative and institutional capabilities’, provided they abide by the general principles of the WTO.[80] Moreover, any Member may implement, autonomously and in advance, tariff and non-tariff concessions agreed at the Uruguay Round on the exports from the LDCs, and to provide technical assistance to the least-developed countries such that the latter can benefit from market access.[81] Other provisions and transitional arrangements on the LDCs should be ‘applied in a flexible and supportive manner’.[82]
Similar to the Enabling Clause, Decision on Measures in Favour of Least-Developed Countries requires ‘expeditious implementation of all special and differential measures taken in favour of least-developed countries’. The Decision also encourages the parties, to the greatest extent possible, to ‘further improve GSP and other schemes for products of particular export interest to least-developed countries.’[83] In other words, although the WTO stresses the principle of a single undertaking, and despite the fact that there are substantial requirements under the principle of MFN, developed countries may give GSP treatment to the LDCs.
Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing Developing Countries to a large extent is focused on the food security of the LDCs and the net food-importing developing countries. The issue of food security is basically the result of the liberalization of trade in agriculture under the WTO. In order to safeguard the food demand of the LDCs and the net food-importing developing countries, the WTO Members decided to establish an appropriate mechanism:
to ensure that the implementation of the results of the Uruguay Round on trade in agriculture does not adversely affect the availability of food aid at a level which is sufficient to continue to provide assistance in meeting the food needs of developing countries.[84]
As a means to pursue these objectives, the parties agreed to ‘initiate negotiations in the appropriate forum to establish a level of food aid commitments sufficient to meet the legitimate needs of developing countries during the reform programme.’ The parties also undertook that ‘increasing proportion of basic foodstuffs is provided to least-developed and net food-importing developing countries in fully grant form’ and to provide ‘technical and financial assistance to least-developed and net food-importing developing countries to improve their agricultural productivity and infrastructure’. Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing Developing Countries also provides for preferential treatment to the LDC’s and the net food-importing developing countries in respect of export credits and import financing of agricultural products.[85]
The above decisions have provided the legal basis for the continued enforcement of GSP. As a matter of fact, the results of the Uruguay Round in relation to market access has shrunk the boundary between GSP and MFN treatment. The preference enjoyed by developing countries and the least-developed countries under the GSP has also been reduced.[86]
In practice, as mentioned earlier, there have been very few cases brought by developing countries in connection with preferential treatment. The EC – Tariff Preferences is an exception. EC - Tariff Preferences[87] originated from the Council Regulation (EC) No. 2501/2001 (‘EC Regulation’) that was passed by the EC Council on 10 December 2001. The EC Regulation contained five arrangements on tariff preference for developing countries including a general arrangement and special arrangements to combat drug production and trafficking (‘Drug Arrangements’), which provided for more favourable tariff treatment to 12 countries listed in the Annex I. India claimed that the EC Regulation[88] violated Article 1(1)of the GATT on MFN and the EC could not invoke the Enabling Clause - Decision on Differential and More Favourable Treatment, Reciprocity, and Fuller Participation of Developing Countries as a defence and thus requested the establishment of a Panel. The Panel Report, circulated on 1 December 2003, supported India’s claim and ruled that the Drug Arrangements constituted nullification and impairment of India’s benefits under the GATT.[89] As a result, the EC appealed on the Panel’s report.
The EC requested the Appellate Body to reverse the findings of the Panel that the Enabling Clause was an exception to Article 1(1)of the GATT and should be subject to the obligation of MFN treatment. In its view, the Enabling Clause was a separate decision on the establishment of the Generalized System of Preference (‘GSP’) which included the provision of ‘generalized, non-reciprocal and non-discriminatory’ preference in footnote 3. The essence of the EC’s argument was that the ‘generalized, non-reciprocal and non discriminatory’ provision in footnote 3 of the Enabling Clause was ‘distinct from’ and ‘intended to replace the most-favoured-nation obligation in Article 1(1)’ of the GATT rather than an exception to the Article.[90] To support its argument, EC pointed out that if paragraph 2(a) of the Enabling Clause was an exception, it would have been stated in Article 1(1), or at least, immediately after Article 1; as that was not the case, the Enabling Clause was a separate decision complementing Part IV of the GATT. [91] In other words, according to EC’s logic, if the Enabling Clause is an exception, Part IV of the GATT will be an exception to the MFN treatment as well. It is obviously unreasonable to treat Part IV of GATT as an exception and according to the practice of the WTO, special and differential treatment to developing countries is a right rather than an exception. Another argument made by EC was that special and differential treatment was critical to achieving one of the fundamental objectives of the WTO Agreement: ‘to ensure that developing countries, and especially the least developed among them, secure a share in the growth in international trade commensurate with the needs of their economic development’.[92]
The importance of the EC’s argument on the status of the Enabling Clause lies in that if it is an exception to Article 1(1) of the GATT, the EC has an obligation to justify its application; where the Enabling Clause is considered a separate decision to replace the application of Article 1(1) of the GATT. India then has an obligation to prove the inconsistence of the Drug Arrangements with the Enabling Clause. This shift of burden of proof may determine the fate of the dispute.
The EC also argued that the Panel erred in its interpretation of footnote 3 of the Enabling Clause. In its view, the words ‘generalized, non-reciprocal and non-discriminatory’ contained in footnote 3 ‘merely refers to the description of the GSP in the 1971 Waiver Decision and, of itself, does not impose any legal obligation on preference-granting countries’.[93]
One of the issues to be dealt with by the Appellate Body was the relationship between the Enabling Clause and Article 1:1of the GATT. The Panel in its findings held that the Enabling Clause should prevail over Article 1(1)of the GATT. [94] The basis of its view was that Article 1 of the Enable Clause started with the words ‘Notwithstanding the provisions of Article 1 of the General Agreement, contracting parties may accord differential and more favourable treatment to developing countries, without according such treatment to other contracting parties’. According to the practice of the WTO, where different provisions apply on the same matter at the same time, the special provisions prevail over general provisions. The Panel thus treated the Enabling Clause as a special provision (an exception) and the GATT MFN principle as the general provision.
The Appellate Body first stated that the application of exceptions was not contrary to the objectives of the WTO. It pointed out that although invocation of the general exceptions provided in Article 20 of the GATT required justification, the implementation of the exceptions was also consistent with the objectives of the WTO.[95] The MFN principle was considered by the Appellate Body as the cornerstone of the WTO; yet the Enabling Clause allowed differential and more favourable treatment to developing countries. Therefore, any claim in respect of the MFN principle must prove that the measure concerned had not only violated Article 1 of the GATT but also been inconsistent with the Enabling Clause. When handling a case, the Appellate Body continued, the Panel should first examine the consistency of the measure in dispute with Article 1(1) and if the answer was negative, then it should examine whether the measure could be justified under the Enabling Clause. [96] In other words, there should be a sequence in the application of Article 1 of the GATT and the Enabling Clause. The Appellate Body however did not use the word ‘exception’ to describe the Enabling Clause. Instead, it stated that the Enabling Clause contained more concrete provisions. In other words, in the view of the Appellate Body, the Enabling Clause provides for the right of developing countries rather than an exception to the general provisions.
Despite the Appellate Body’s cautiousness in ruling on the precise nature of the Enabling Clause, its findings will affect the interpretation of the WTO in at least two aspects. In the first place, the implementation of exceptions of various agreements is consistent with the overall objectives of the WTO. Secondly, where both a general provision and an exception apply to the same matter, the first issue to be dealt with is whether the measure concerned is consistent with the general provision, and only when it is found not to be consistent could the exception be applied; in which case a justification must be made in accordance with the exception. These will serve as guidelines for WTO Members in carrying out their obligations under the WTO Agreement.
It should also be pointed out that the WTO agreements should be interpreted ‘in accordance with customary rules of interpretation of public international law’.[97] Taking into consideration the wide application of the WTO agreements with regard to both the membership and economic sectors covered and the fact that no reservation is allowed to such agreements, it is fair to say that the provisions in respect of development now have wide binding force. That is to say they have acquired, through the WTO and other international instruments, the status of international law.
Other multilateral treaties also provide for similar arrangements. For instance, Article 50(5)(a) of the Patent Cooperation Treaty on the charge for providing patent information services prescribes that whilst a contracting party may charge other contracting parties for furnishing such services at cost, the charge in relation to developing country contracting parties must be ‘below cost’.[98] In fact, the Treaty requires the establishment of a Committee for Technical Assistance the main task of which is ‘to organize and supervise technical assistance for Contracting States which are developing countries in developing their patent systems individually or on a regional basis’.[99] The contracting parties to the Berne Convention for the Protection of Literary and Artistic Works added an Appendix to the Convention stipulating special regulations governing the developing countries in respect of, among others, the use and translation of the protected works.[100] The Universal Copyright Convention made similar arrangements for developing countries.[101]
Another example is the Kyoto Conference on Climate Change held in December 1997, which led to the adoption of the Kyoto Protocol to the United Nations Framework Convention on Climate Change. The Protocol required developed nations to commit themselves to reducing their airborne emissions over the course of the following 15 years, whereas no similar commitment was required of the developing countries.[102] Some speculate the differential treatment was to enable the developing countries to sign a deal that they would have not entered into otherwise. Regardless what was behind the Kyoto Protocol, the fact that it provides special and differential treatment to the developing countries clearly shows that the rights and interests of the such nations are now well recognized.
It is therefore quite evident that international norms regulating the interests of and for the developing countries, i.e., international development law, have become an integral part of public international law. The rights and obligations in connection with development are mainly that of the nations. Taking international development law as a whole, its sources, the basic principles and subjects are essentially no different from those of public international law.
The relationship between international development law and national law and the impact of the former on the latter must be analysed against the background of economic globalization. Economic globalization, i.e., the integration of national and regional markets has become the main trend of the world today. In this globalized society, all nations are highly interdependent on each other. For instance:
the creation of wealth in East Asia not only enriches entrepreneurs in East Asian countries, but it also enriches investors in the West. Similarly, the impoverishment of East Asian economies may result in the unemployment of US factory workers who can no longer compete with the drastically reduced price of East-Asian manufactured goods.[103]
In a word, the effect of the globalization is that it ‘has become an undeniable fact of life [that] tends to weaken certain familiar structures like the nation-state’.[104] Like everything else in the world, globalization requires conditions for its coming into being and expansion. Its prerequisite is that most, if not all, members of the international community practice the system of market economy. Within this highly globalized world, the exchange of goods, services, capital and labour are mainly conducted in accordance with the objective principles applicable to market economies, that is in a comparatively free environment and with limited government intervention confined to the permit of law. The manifestation of globalization is that transnational or cross-border economic exchanges and transactions are conducted in mass scales, high frequency and fast speed. The telecommunication and transportation techniques and technology of our time have helped to meet the needs of such exchanges and transactions.
Economic globalization requires a compatible legal mechanism for the conduct of cross-border exchanges and transactions. Otherwise, cross-border economic transactions cannot be conducted in an orderly manner. From a theoretical point of view, the legal mechanism that governs the economic globalization can be subdivided into international and national categories. In practice, however, these two categories of norms are inseparable and mutually affect, complement and supplement each other. In other words, as the world economy becomes increasingly globalized, ‘commercial laws are becoming harmonized on a global scale so that business may be conducted more smoothly and efficiently, without having to accommodate the ‘unnecessary’ complications of different legal cultures.’[105] The current trend is that international norms and national norms are being combined and unified at the speed and in the scale that are unprecedented. It is predicted that in the not long distant future the line dividing the national and international laws will become very thin and that its value will be reduced significantly. The first stage of this process is the unification of the legal systems and laws of the members of the international community as well as the principles of legal interpretation and legal values. As a result of the above development, national boundaries will become very permeable and the ‘traditional distinctions between local, national and international issues’ will become blurred.
Policies formerly considered to be exclusively matters of national concern will have an impact on the ecological basis of other nations' development and survival. Conversely, the way in which the policies of certain nations -including economic, trade, monetary, and most sectoral policies, will reach into the sovereign territory of other nations and therefore limit those nations’ options in devising national solutions to their own problems.[106]
This is an irresistible trend, a great trend of the contemporary world. In the above trend, increasingly governments will realize that their individual national interests cannot be satisfied without the cooperation and collaboration of the rest of the international community. In other words, both the international community and the members thereof will not have much choice. In the first place, economic globalization exists as a matter of fact which is not affected by the recognition or non-recognition of any member of the international community. Secondly, economic globalization requires a compatible legal framework which can meet its needs. Nevertheless, this does not mean that the international community and its members have a free choice over the legal framework. The Asian financial crisis which broke out in Thailand in 1997 is a case in point.
Undeniably the Asian financial crisis is a side product of economic globalization, without which capital could not have flown so quickly around the world, and hence the Asian financial crisis might not have taken place. With the move towards economic globalization, regional and global financial crisis, economic crisis as well as other crises will happen.[107] Without adequate preventive measures put in place, such crisis will surely repeat. However, the place of the outbreak of financial or economic crisis may be uncertain. It is just like the chances of a person catching a cold in chilly weather. In general it is easier for people to catch a cold in winter, but it is difficult to determine exactly who will catch a cold. This however does not mean that there is no rule to make a prediction. For instance, everyone may say that those who are weak and not in good health are the ones likely to catch a cold. Putting this simile into the Asian financial crisis, it is no surprise that it first broke out in Thailand [108] and then, before people could have realized what had happened, spread to other South East Asian countries and East Asia.[109] The reason is that the legal system and the enforcement of laws of the countries concerned are encountering serious problems.
As discussed earlier, the basis of economic globalization is that most members of the international community adopt the market economic system. This is referred to as the first generation reform. After the substantial achievement of the first generation reform of the international community at large, the task of the second generation reform is the establishment of the legal norms and framework suitable for bringing out fully the potentialities of the market economy both at the international and national levels.[110] Currently at the international level, the International Monetary Fund, the World Bank and the WTO are the pillars of the legal framework of international monetary and financial matters as well as international trade. Traditionally and according to its Articles of Agreement, the World Bank is prohibited from interfering with the ‘political affairs of any members’.[111] This provision however was interpreted by the General Counsel of the Bank to mean in cases where governance issues are linked to economic development, intervention may be justified. [112] In fact, since the late 1980s, the World Bank has been regarding ‘corruption, poor financial accountability and practices, poor environmental regulation, and a poor legal and regulatory framework’ [113] as non-economic factors that restrain development. This has appeared also to be the policy of the IMF. For instance, in the Asian financial crisis, the IMF decided to make a SDR15.5 billion three-year standby credit available to Korea for the latter to carry out a structural adjustment.[114] In order to use the credit, Korea’s structural reforms had to be reviewed by the IMF. At the same time, the World Bank and the Asian Development Bank decided to make available US$10 billion and US$4 billion in addition to the US$20 billion bilateral loans from Australia, Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Sweden, Switzerland, the United Kingdom and the United States. [115] Such credits were of course all conditioned on the programme of structural adjustment which included strengthening the macro-economic framework to reduce Korea’s external current account deficit, restructuring the financial sector, liberalizing foreign trade and capital markets and eliminating restrictions on foreign access to money markets.[116] That was why Korea regarded the day of its acceptance of the international financial support as the day of national shame.
Regarding international investment, although there is not yet an international organization like the WTO, the multilateral and bilateral treaties on investment protection and dispute resolution, and the regional organizations like the EU, North America Free Trade Area and the Association of South-East Asia Nations constitute the legal framework for international investment activities. At the same time, the GATS and TRIPs also have a direct bearing on international investment. The Agreement on Trade-Related Aspects of Investment Measures which stipulates that members of the WTO have an obligation to abandon gradually investment policies and measures that contravene the principle of national treatment is directly investment related. Thus, it is obvious that the impact of the WTO on international investment is tremendous. This is very important for the establishment of a multilateral investment framework.
In the formulation of the principles and norms governing international economic exchanges such as trade, finance and investment, a distinctive feature thereof is recognition of the special needs of the developing countries. This trend is prevailing in both international and regional organizations. The facilities of the IMF, the World Bank, the International Development Association, the International Financial Association, the Asian Development Bank and other regional development banks are all exclusively used by the developing countries are self evident. In the investment area, the Multilateral Investment Guarantee Agency, a subsidiary of the World Bank, established under the Seoul Convention expressively states that it only provides insurance to the investment projects in the developing countries.[117] Regarding trade, every agreement under the WTO stipulates on the one hand the obligations in respect of the developed countries on the provision of technical and other aid to the developing countries and on the other hand discretions on the part of the developing countries concerning the speed of market opening, information provision, compliance of domestic law with the requirements of the WTO and law enforcement. It also provides for the special treatment of the developing members.
How then does international development law, established through bilateral and multilateral treaties and agreements, influence the laws and legal systems of national states? What are the differences between the contemporary international treaties and those of the past? Take the principle of national treatment as an example. Traditionally, the principle only required reciprocity in formality, i.e., so long as the state governments concerned accorded to foreign goods, foreign merchants and foreign investors treatment no less than that to their nationals, they would be considered as having fulfilled their treaty obligations. The Paris Convention for the Protection of Industrial Property can illustrate this point. Under the Convention, suppose the intellectual property law of country A stipulates that service marks cannot be registered, i.e., not protected, whilst the trademark law of country B provides protection for service marks; when a service mark holder of country B enters country A, he/she cannot have the service mark registered. When the nationals of country A go to country B, however, they may have their service marks registered. By refusing to register such service marks of nationals of country A, unless there is a valid reason, country B would violate the principle of national treatment. The same is true with regard to the differences in the term of patents under the laws of various countries. [118] From this hypothesis, it is clear that what the national treatment obligation of the Paris Convention requires is the equal treatment in formality rather than substance. By contrast, the national treatment obligations under the TRIPs is substantive. Article 1 of the TRIPs provides: ‘Members shall give effect to the provisions of this Agreement. Members may, but shall not be obliged to, implement in their law more extensive protection than is required by this Agreement, provided that such protection does not contravene the provisions of this Agreement.’ Article 3 prescribes: ‘Each member shall accord to the nationals of other Members treatment no less favourable than that it accords to its own nationals with regard to the protection of intellectual property.’ The TRIPs has detailed stipulations regarding the standards of acquisition, scope and use of intellectual property rights, which must be enforced by every member. Any member who does not enforce the above-mentioned stipulations risks contravention of Article 1.[119] As a matter of fact, the TRIPS also has detailed provisions regarding the system of domestic legal remedies and the principles on law enforcement of the members of the WTO. For instance, it requires all members to set up a system to provide effective administrative, quasi-judicial and judicial remedies and to adopt the principle of objectivity, fairness and justice in enforcing their laws.[120] The TRIPs also stipulates the powers of the judiciary in reviewing decisions of the administrative bodies [121] and with regard to temporary security measures as well as the circumstances in which the Customs may take custody of goods suspected of infringing intellectual property rights. The requirement of transparency of the legal system of the members is almost stipulated in every WTO agreement.
In addition to the provision for the mutual rights and obligations of its members, the WTO regulates the legal system and the principle of law enforcement of its members. Take the GATS for example, following the notion of free trade and non-discrimination stipulated by the GATT, the GATS requires every member to undertake to fulfil the obligations of most favoured nation treatment and national treatment to other members.[122] Unlike trade in goods, the most favoured nation treatment and national treatment in service trade involves both the procedural law and the substantive law of the members. One of the basic requirements of service trade is access to the market of other members. That is to say, if the qualification of a foreign service provider is not recognized, including their education, professional qualification and experience, etc, it is futile to say that the foreign service provider can cater services within the national boundaries of other members. According to the principle of non-discrimination, most favoured nation treatment and national treatment of the GATS,[123] every member must give no worse treatment to foreigners than their local people in terms of the requirement of educational standard and professional qualifications. Needless to say, this stipulation has provided for a uniform assessment and standard for recognizing the professional qualifications of WTO members.[124]
An important aspect of the GATS is to set limits to the legal system and criterion for law enforcement of its members. All WTO members must publicize the measures, laws, administrative rules, decisions, administrative decrees, international treaties, international agreements, etc. which are related to the implementation of GATS obligations.[125] Besides, all members must report to the Council annually the enactment, amendment and annulment of the above laws, administrative rules, administrative decrees[126] and they are required to administer their laws and other measures in a uniform, impartial and reasonable manner.[127] For instance, in order to ensure that the service providers especially those from foreign members can enjoy their rights, all members must establish a mechanism for answering queries of the service providers. In enforcing the related laws, administrative rules, administrative decrees and other related measures, all members are required to observe strictly the principle of reasonableness, objectiveness and fairness. They must also establish the judicial procedures, arbitration procedures and administrative remedies to handle the complaints of service providers and to cater legal and administrative assistance. According to the stipulations of the GATS, it constitutes a breach of contract if the transparency of the laws and legal system of any member is not up to the standard or, if a member cannot cater sufficient legal and administrative assistance to foreign service providers.[128] Even if there were an objective criterion to determine the transparency of laws, judicial and administrative actions and assistance, the determination of reasonableness, objectiveness and fairness of such actions is directly related to the history, culture and tradition of the member concerned. In other words, through the operation of the GATS and other treaties, international norms are being transplanted into the national system and becoming national norms.
The WTO agreements do not only provide international obligations of members on matters within the WTO but also affect members’ treaty obligations with non-members and under other arrangements. In other words, by accepting the obligations of the WTO, members may not be able to perform other international obligations. A case in point is the dispute between the European Communities and the United States over banana imports to the European Communities decided by the Appeal Body of the WTO.[129]
The following conclusions can be drawn from reading the above-mentioned provisions of the WTO agreements: Firstly, the result of all members’ compliance with the international agreements is that their laws and legal systems will become similar. Secondly, any member that refuses or fails to implement its international obligations may be challenged by or even subject to retaliation by others. For example, in the case where the laws or legal system of a country concerned are considered as non-transparent, merchants or investors from other countries conducting transactions in trade, investment or providing services may accuse this country of contravening the principle of national treatment. This is so because in a country whose laws are not transparent, foreigners cannot be as familiar with the policy of the government as the nationals, and are thus placed in a disadvantageous position.[130] Thirdly, the provisions on developing countries also have the binding force on all the members. Accordingly, on the one hand the developing country members are entitled to more preferential treatment than other members and on the other hand their merchants, goods and services must be treated in every aspect of domestic law no worse than the domestic merchants, goods and services in the markets of any other member except with permission of the WTO.
The result of the above process in relation to the WTO and other international agreements[131] is the restriction of the traditional power of sovereignty,[132] which in turn leads to the gradual convergence of the laws and legal system of members of the international community.[133] To say economic globalization is the main trend of the world today, the unification of the laws and legal system and the weakening of the principle of sovereignty is a strong tide within the international community. This is part of the second generation reform, the form of which is the globalization of law with the ultimate aim of governing the world by the rule of law.[134] This process is however different from that suggested by the modernization approach which, in the view of some commentators, ‘does not take into account any historical factors or cultural components.’[135] International agreements and instruments are products of international negotiation involving both developed and developing countries. They would, at least to some extent, reflect the traditions, history, culture and religion of very participant and have therefore cured the short-comings of the modernization approach. Also this process of the rule of law through international requirements is not without direction or aim. It has defined objectives of development, that is to establish a framework with the principles and norms that are conducive for maintaining an expanding and evolving framework which will be able:
to sustain a workable and working system of international finance; to achieve an array of global demographic outcomes that lie beyond the capacity of any one country to attain; to maintain a balance between global food supply and demand that cannot possibly be maintained without an acceleration of food production in many, probably most, developing countries; to balance global energy use and production at acceptable costs; to modulate the depletion of renewable resources; and to protect the global environment, renewing many of those resources that are renewable.[136]
This however does not mean that the boundary between international development law and national law has disappeared. The line dividing the two categories of law has become thin; some of the provisions of the two categories of law are becoming similar or the same. Yet, they still remain to be the legal prescriptions and norms governing actions and omission of actions of the subjects of the international community and national society respectively.
In conclusion, international development law has become an important and integral part of public international law which has the nature of law and has binding force in the international community. The coming into being and evolution of international development law is a result of the increasing interdependence among developed and developing countries or globalization. Because of the process of globalization, more and more norms and principles of international development law are moving into the sphere of national law. Thus the boundary between international development law and national law, to some extent, is blurred, although both categories of law still remain the law governing different societies.
[*] Professor of Chinese and Comparative Law of the City University of Hong Kong; Distinguished Professor of Law, Hunan Normal University, Hunan, China; Chairman of the Hong Kong WTO Research Institute; Member of the International Academy of Comparative Law; Arbitrator of China International Economic and Trade Arbitration Commission; and Vice President of the Chinese Society of International Economic Law. I wish to thank Mr. Wang Chao for his assistance in research important for the completion of this article.
[1] Needless to say, there are different views on the definition and scope of international development law. Scholars also differ on the nature of international development law. Some consider it as a branch of public international law dealing with the rights and responsibilities of states and other actors in the development process. See, Daniel D. Bradlow, ‘Development Decision-Making and the Content of International Development Law’ (2004) 27 Boston College International and Comparative Law Review 195-217. Still others regard international development law, like international trade law and international financial law, as a branch of international economic law. See, A.H.Qureshi, International Economic Law (1999) 338-339.[2] R. Bilder and B. Tamanaha, ‘Book Reviews of Law and Development by Anthony Carty (ed) and Law and Crisis in the Third World by Sammy Adelman & Abdul Paliwala (eds)’ (1995) 89 American Journal of International Law 470, 471-72.
[3] Rumu Sarkar, Development Law and International Finance (2nd ed, 2002) 32.
[4] Ibid 33.
[5] For discussion on the NIEO, see Jerzy Makarczyk, Principles of a New International Economic Order: A Study of International Law in the Making (1988).
[6] ‘The purpose of IDL was to provide the legal tools for reversing global inequality and establishing NIEO, or, at least, social justice’, see Koen De Feyter, ‘Contracting for Human Development: International Law and Development Revisited’ (2002) 110 Asia Pacific Law Review 49.
[7] Sarkar, above n. 3, 87.
[8] Paul De Waart, ‘Introductory Reflections Upon International Law and
Development’ in Paul De Waart, Paul Peters and Erik Denters (eds), International Law and Development (1988) xxiii.
[9] Samuel Huntington, ‘The Clash of Civilization?’ (1993) Foreign Affairs 22.
[10] The New Neo-Confucianism was articulated by Professor Feng Youlan, a renowned Chinese philosopher and contemporary Confucianist, in his six books, namely, A New Treatise on Neo-Confucianism (Xin Li Xue) (1939); A New Treatise on Practical Affairs (Xin Shi Lun) (1940); A New Treatise on Way of Life (Xin Shi Xun) (1940); A Treatise on the Nature of Man (Xin Yuan Ren) (1943); A New Treatise on Chinese Philosophy (Xin Yuan Dao) (1945); A New Treatise on the Methodology of Metaphysics (Xin Zhi Yan) (1946). The Xin Yuan Dao was translated into English by E.R. Hughes under the title The Spirit of Chinese Philosophy (1947). All six books were included in Classics of Contemporary Chinese Academic Research (Zhong Guo Xian Dai Xue Shu Jing Dian) (1996).
According to Professor Feng, the New Neo-Confucianism derives from the Neo-Confucianism of the Song and Ming eras. ‘Thus, in regard to its practical application it bears a resemblance to the Confucianists’ concern for the common. In so far as it speaks of li (Principle) it bears a resemblance to what the pre-Chi’in logicians designated as universal. At the same time it discovers a suitable position for what in Chinese philosophical language is known as the nameable. In its use of ‘chi’ (emanative material force) the meaning bears a resemblance to the early Taoists’ Tao.’ Feng, above n 10, The Spirit of Chinese Philosophy, 204. ‘If I may be allowed to say so’, said Professor Feng, ‘although it is a continuation of the Neo-Confucianists, it is, if not an entirely new metaphysic, at the least an opening of a new road in metaphysical thinking.’ Ibid 205.
[11] Feng, A New Treatise on Neo-Confucianism, above n 10, 38.
[12] In the view of Professor Feng, ‘The concept of Principle bears a
resemblance to the concept of “being” in Greek philosophy, notably in Plato and Aristotle, and in modern philosophy, notably in Hegel. The concept of emanative material force bears a resemblance to the concept of ‘non-being’ in these philosophers.’ See, Feng, A New Treatise on Chinese Philosophy, above n 10, 815.
[13] Feng, A New Treatise on the Methodology of Metaphysics, above n 10, 883.
[14] The Legalists belonged to a school of thought which opposed Confucianism in the Spring and Autumn and Warring States Periods, 770-221 BC.
[15] Friedrich A. Hayek, Law, Legislation and Liberty Vol. I (1982) 73.
[16] Han Zhongmo. An Introduction to Legal Theory (1997) 19.
[17] Feng Youlan, ‘The New Dialogue (No.4)’, in The Collective Works of San Song Tang (1984) 267. Professor Feng named his house San Song Tang as there are three pine trees in front of it.
[18] Mo Tzu, ‘Shang Tong Shang (Advocating for the Commonness, First of Three Volumes)’ in The Collection of Works of Ancient Philosophers Vol. 4 (1996) 62.
[19] Aristotle, Politics (1996 ed) 169.
[20] Wu Shuchen, ‘Discussion on China’s Legal Culture’ in Collection of Legal Theses (1987) 312.
[21] Feng Youlan, A New Treatise on Neo-Confucianism, above n 10, 117.
[22] Zhang Wenxian, Study of the Trend of Western Jurisprudence in the 20th Century (1996) 405-410.
[23] Ibid 394.
[24] Han Zhongmo, above n 16, 90.
[25] Zhang Wenxian, above n 22, Chapter 11 (‘Morality and Law’).
[26] Han Zhongmo, above n 16, 92.
[27] Feng Youlan, ‘Comparison of the Thoughts in the Eighteenth and
Nineteenth Century in Europe’ in The Collection Works of San Song Tang (1984) 99.
[28] Feng Youlan, Classics of Contemporary Chinese Academic Research, above n 10, 529.
[29] Ibid.
[30] Ibid 530. In addition to the sphere of utilitarianism, the New
Neo-Confucianism has also introduced the concept of the sphere of the transcendent, the moral sphere, the sphere of the unselfconsciously natural. As will be discussed later, the behaviour of people in the sphere of the transcendent is in compliance with the ‘law ought to be’.
[31] Zhang Wenxian, above n 22, 403.
[32] Chuang Tzu, ‘Qu Qie’ in The Collection of Works of Ancient Philosophers Vol. 4 (1996) 187.
[33] Feng Youlan, A New Treatise on the Nature of Man, above n 10, 530-531.
[34] Chuang Tzu, ‘Shan Mu’ in Yang Liuqiao, Annotation of Chuang Tzu (1998) 378.
[35] See also, Zhang Wenxian, above n 22, 403.
[36] For a comparison of the views of Western scholars regarding justice, see Shen Zongling, Legal Theory (1994) Chapter 8; see also Zhang Wenxian, above n 22, Chapter 18.
[37] John Rawls. A Theory of Justice (1971) 7.
[38] Han Zhongmo, above n 16, 127.
[39] Compare this with the teaching of Confucianism: ‘Those who have
kingdoms and possessions should not be concerned that they do not have enough, but should be concerned that their possessions are not equally distributed; they should not be concerned that they are poor, but should be concerned that the people are not contented. For with equal distribution there will be no poverty; with mutual good will there be no want; and with contentment among the people there can be no downfall and dissolution.’ Confucious, The Analects (H.M. Ku trans, 1984 ed) Chapter XVI, 186.
[40] Rawls, above n 37, 235.
[41] It may be argued that except for the WTO rules, most of other international norms do not have binding force of law. See, C.M. Chinkin, ‘The Challenge of Soft Law: Development and Change in International Law’ (1989) 38 International and Comparative Law Quarterly 851-852. With the development of globalization, however, the scope of application of the binding provisions of the WTO, regional arrangements and bilateral agreements will grow. In fact, the WTO Agreement alone, already covers the vast areas such as trade in goods, trade in services, intellectual property protection and investment.
[42] Besides states, there are other actors involved in international development law. ‘Globalization allows a wide variety of non-state actors to impact on development. Intergovernmental organizations, transnational corporations and civil society organizations move more easily than ever across borders transcending the regulatory power of the State.’ See De Feyter, above n 5.
[43] Feng Youlan, ‘Comparison of the Thoughts in the Eighteenth and Nineteenth Centuries in Europe’, above n 27, 95.
[44] Feng Youlan, A New Treatise on the Nature of Man, above n 10, 567-568.
[45] In the early days, Austin was one of the strongest opponents of the idea that international law was law of the nations. For details, see Wang Tieya (ed), International Law (1995) 6-7.
[46] Robert Jennings and Arthur Watts, Oppenheim’s International Law (revised) (1992) 9.
[47] According to the New Neo-Confucianism, the determination of which category a given thing may falls into depends on the main nature of the thing.
[48] See also Zhang Wenxian, above n 22, 160-161.
[49] Chinese scholars seem not to agree on the concept of common consent among members of the international community. They argue that the common consent should refer to the agreement among different countries. See Wang Tieya (ed), above n 45, 9.
[50] Jennings and Watts, above n 46, 14.
[51] Nowadays, very few people question the validity of international law. Yet, as to the basis of the validity of international law, many have offered a variety of theories, such as ‘self-restraint’, ‘common will’ and ‘pacta sunt servanda’. See Wang Tieya, An Introduction to International Law (1998) 25-36.
[52] The Lotus case was decided by the Permanent Court of International Justice in 1927: see Jennings and Watts, above n 46, 12 (note 21).
[53] Sarkar, above n 3, 77.
[54] H.C. Black, Black’s Law Dictionary (revised 6th ed, 1990) 1021.
[55] Nicaragua v United States (Judgment) [1986] ICJ Rep 1986 138. See also H Hohmann, P de Waart, ‘Compulsory jurisdiction and the use of force as a legal issues: the epoch making judgment of the International Court of Justice in Nicaragua v United States of America’ (1987) 34 Netherlands International Law Review 187-189. The court had not dealt with the issues of economic development of the developing countries before. Only in one previous judgment the Court touched the issue but no developing country was involved in that case. See Fisheries Jurisdiction (Federal Republic of Germany v Iceland)(Judgement) [1974] ICJ Rep 199-200.
[56] Progressive Development of the Principles of International Law Relating to the New International Economic Order, [91], UN Doc A/39/504/Add. 1 (1984). See, also, Bulajić Milan, Principles of International Development Law: Progressive Development of the Principles of International Law Relating to the New International Economic Order (1986) 240-245.
[57] R. P. Anand, Confrontation or Cooperation: International Law and the Developing Countries (1984) 125.
[58] Principle 7 of the Rio Declaration on Environment and Development, 14 June 1992. See also, Philippe Sands, ‘International Law in the Field of Sustainable Development’ (1995) 66 British Yearbook of International Law 344-345.
[59] The principle of state sovereignty can be traced from Hugo Grotius’ De Jure Belli Ac Pacis (1620-1625). Nevertheless, it was Christian Wolff (1678-1754) who expressively stated the principle as part of the modern international law. Despite the efforts by many scholars and states, the principle of state sovereignty was not formally declared and widely accepted by the world until the establishment of the United Nations after the Second World War.
[60] See Philippe Sands, ‘International Law in the Field of Sustainable Development: A Mixture of Development, Environment, and Human Rights’, in United Nations, International Law as a Language for International Relations, Kluwer Law International (1996) 497.
[61] Nagendra Singh, ‘Sustainable Development as a Principle of International Law’, in Paul De Waart, Paul Peters and Erik Denters (eds), International Law and Development (1988) 3.
[62] Ibid 4-5.
[63] Ibid 5.
[64] The WTO Agreement does not define ‘developing countries’. Members announce for themselves whether they are ‘developed’ or ‘developing’, whilst other members may challenge such declarations. In general, members follow the general criteria of the World Bank and the United Nations. As far as the Generalized System of Preferences (GSP) is concerned, in practice, it is the preference giving country which decides the list of developing countries that will benefit from the preferences. World Trade Organization, Who are the developing countries in the WTO? (2007) <http://www.wto.org/english/tratop_e/devel_e/d1who_e.htm> at 15 October 2007. The value of the ‘special and differential treatment’ is sometimes challenged. For example, the The Future of the WTO: Report by the Consultative Board to the WTO Director General although skeptical, accepts that SDT remains a ‘valid concept’ and that it is part of ‘the WTO’s legal ‘acquis’”. (2005) World Trade Organization [89] <http://www.wto.org/english/thewto_e/10anni/_e/future_wto_e.htm at 15 October 2007. See, Donald McRae, ‘Developing Countries and the Future of the WTO’ (2005) 8 Journal of International Economic Law 603-610. The Report concludes that ‘SDT had has only a marginal effect on country economic performance’. See John Whalley, ‘Non-discriminatory Discrimination: Special and Differential Treatment under the GATT for Developing Countries’ (1990) 100 The Economic Journal 1318-28. Pangestu also commented that ‘SDT is likely to remain a political demand of developing countries. Thus, the issue before us is not whether to have or not to have SDT but more to do with having effective SDT’. See, Mari Pangestu, ‘Special and Differential Treatment in the Millennium: Special to Whom and How Different?’ (2000) 23 World Economy 1285-1302, 1295.[65] The difference between GSP and MFN treatment lies in the fact that the preference of the latter is based on the principle of reciprocity while the GSP is unilaterally granted by developed countries to developing countries. See Guiguo Wang, The Law of the WTO: China and the Future of Free Trade (2005) 1026. See, also, Norma Dos Santos, Rogerio Farias and Raphael Cunha, ‘Generalized System of Preferences in General Agreement on Tariffs and Trade/World Trade Organization: History and Current Issues’ (2005) 39 Journal of World Trade 637-670.
[66] The full text of the Agreement is incorporated in Legal Texts: The Result of the Uruguay Round of Multilateral Trade Negotiations (1999).
[67] For discussion by the WTO and the European Union concerning sustainable development, see A. Mattoo and P.C. Mavroidis, ‘Trade, Environment and the WTO: Dispute Settlement Practice Relating to Article XX of GATT’ in Ernst-Ulrich Petersmann (ed), International Trade Law and the GATT/WTO Dispute Settlement System 325- 343.
[68] See ‘General Agreement on Tariffs and Trade, Dispute Settlement Panel Report on United States Restrictions on Imports of Tuna’ (1994) 33 International Legal Materials 898 5.42.
[69] These two decisions were adopted at the negotiating committee of the Uruguay Round on 15 December 1993. For more discussion on the Enabling Clause, see Lorand Bartels, ‘The WTO Enabling Clause and Positive Conditionality in the European Community’s GSP Program’ (2003) 6 Journal of International Economic Law 507-532.
[70] The General Agreement on Tariffs and Trade, opened for signature October 30, 1947, 55 UNTS 187, art XVIII sub-ss (1)and (2).
[71] The General Agreement on Tariffs and Trade, opened for signature October 30, 1947, 55 UNTS 187, art XXXVI sub-s (8).
[72] The General Agreement on Tariffs and Trade, opened for signature October 30, 1947, 55 UNTS 187, art XXXVI sub-s (8), para 9.
[73] Basic Instruments and Selected Documents (hereinafter ‘BISD’) 12S/48 (1964).
[74] After the establishment of the Committee on Trade and Development, the aforesaid third committee was terminated.
[75] BISD 13S/75 (1965).
[76] Decision on Differential and More Favorable Treatment Reciprocity and Fuller Participation of Developing Countries, GATT Doc L/4903 (1979).
[77] For example, Article 4 of the GATT has provisions encouraging the participation of developing countries. The transitional arrangement of the TRIPS allows developing countries to implement the provisions of the agreement in four years. The transitional period for least-developed countries is ten years. Another obligation of developed countries under the TRIPS is to carry out technical and financial cooperation upon request of developing countries and the least-developed countries. A number of provisions of the DSU relating to the establishment of the Panels and Panel reports expressly require consideration of the interests of developing countries. Article 24 of the DSU provides for the special procedures applicable to the least-developed countries. On the whole, the special procedures only require other litigants to exercise restraint and that the WTO Director-General and chairman of the DSB should offer their good offices, conciliation and mediation on disputes relating to the least-developed countries.
The Agreement on Agriculture, Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement), Agreement on Textiles and Clothing, and the Agreement on Customs Valuation also stipulate to certain extent the special treatment of developing countries. These provisions mainly provide a longer transitional period for developing countries before implementing the relevant agreements. Article 15 of the Agreement on Anti-Dumping, while requiring developed countries to pay special regard to developing countries, stipulates that where the implementation of the anti-dumping duties affect the essential interests of developing countries, the relevant developed countries should explore the possibility of a constructive remedy. Yet the Anti-Dumping Agreement has failed to define specifically the term ‘essential interests’ and who should determine whether the anti-dumping duties will affect the essential interests of developing countries. In practice, such issues can only be resolved by the DSB. The experience of the DSB shows, however, that it is not common for developing countries, especially the least-developed countries, which do not have the specialized legal expertise and funds, to effectively resort to the mechanism. The SCM Agreement also has provisions on the special treatment of developing countries. The most important special arrangement on developing countries under the SCM Agreement is to allow the least-developed countries and a small number of low-income developing countries to provide subsidies for the purpose of export. Another arrangement is to permit developing countries to delay the implementation of the Agreement. In relation to the provisions on the grant of export subsidies, the biggest obstacle is that the beneficiary developing countries lack the needed funds to provide subsidies. The Agreement on Safeguards puts the proportion of the products exported from developing countries to the total volume of imports of developed countries concerned as the precondition for applying safeguard measures.
[78] These two decisions were adopted as ministerial decisions at the negotiating committee of the Uruguay Round on 15 December 1993.
[79] See, Decision on Measures in Favor of Least Developed Countries (1993) World Trade Organization [Preamble]
<http://www.wto.org/English/docs_e/legal_e/31-dldc.pdf> at 15 October 2007.
[80] Ibid 1. According to the Decision, the LDC’s are given one year more than other countries to submit their schedules to the WTO.
[81] Ibid 2.2 and 2.5.
[82] Ibid 2.3.
[83] Ibid 2.2.
[84] Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least Developed and Net Food Importing Developing Countries (1993) World Trade Organization [3]
<http://www.wto.org/English/docs_e/legal_e/35-dag_e.htm.
[85] Ibid 4 and 5.
[86] In addition to the provisions of the WTO agreements, the special and differential treatment to developing countries is also governed by the decisions of the former GATT, in particular the ‘Enabling Clause’. This is so because Article 16 of the Marrakesh Agreement Establishing the World Trade Organization provides that ‘the WTO shall be guided by the decisions, procedures and customary practices followed by the Contracting Parties to GATT 1947’.
[87] European Communities – Conditions for the Granting of Tariff Preferences to Developing Countries, Report of the Appellate Body, WTO Doc WT/DS246/AB/R (2004) (EC - Tariff Preference Appellate Body Report).
[88] When requesting the establishment of the Panel, India claimed that the EC Regulation violated Article 1(1) of the GATT. Later on, India restricted its claim to the Drug Arrangements, while reserving the right to claim on other two encouraging arrangements.
[89] European Communities – Conditions for the Granting of Tariff Preferences to Developing Countries, Report of the Panel, WTO Doc WT/DS246/DS/R (2004) (EC - Tariff Preference Panel Report).
[90] EC - Tariff Preference, Appellate Body Report, above n 87, para 12.
[91] Ibid.
[92] EC - Tariff Preference, Appellate Body Report, above n 87, para 15.
[93] Ibid para 20.
[94] EC - Tariff Preference, Panel Report, above n 89, para 7.45.
[95] EC - Tariff Preference, Appellate Body Report, above n 87, para 94.
[96] Ibid 101.
[97] See Article 3.2 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), Annex 2 of the World Trade Organization Agreement. The relationship between WTO law and public international law has attracted much debate and was also on the agenda of the DSU reform negotiations. For further discussion, see Isabelle Van Damme, ‘Fifth Annual WTO Conference: An Overview’ (2005) 8 Journal of International Economic Law 769-792.
[98] World Intellectual Property Organization, Patent Cooperation Treaty (1970) [Article 50(5)(a)] <http://www.wipo.int/pct/en/texts/articles/a50.htm#_50> at 18 December 2006.
[99] Ibid Article 51 (3)(a).
[100] World Intellectual Property Organization, Berne Convention for the Protection of Literary and Artistic Works (1986) [Appendix (Article I to Article VI)]
<http://www.wipo.int/treaties/en/ip/berne/trtdocs_wo001.html#P410_75777> at 18 December 2006.
[101] United Nations Educational, Scientific and Cultural Organization, Universal Copyright Convention (1952) [Article Vbis]
<http://www.unesco.org/culture/laws/copyright/html_eng/page5bis.shtml> at 18 December 2006.
[102] For the contents of the Kyoto Protocol to the United Nations Framework Convention on Climate Change, see
http://en.wikipedia.org/wiki/Kyoto_Protocol.
[103] Rumu Sarkar, above n 3, 33.
[104] Ibid 13.
[105] Ibid 33
[106] Singh, above n 51, 3.
[107] The recent oil price surging on world economic outlook, economic performance of individual countries and international geopolitics is another example. If the oil price continues to rise, there will be an oil crisis, regional and international.
[108] In Thailand, the financial crisis started with the bad debts and bankruptcy of financial institutions and banks. Soon thereafter, the whole financial market was affected, which resulted in drastic reduction in the foreign exchange reserve and devaluation of the local currency.
[109] For discussion of the causes and effects of the Asian financial crisis, see Wen Shiren, Financial Crisis of East Asia (1998). Regarding the lessons from the Asian financial crisis and the discussion of the problem of the international community of the 21st century and their solution, see M. Camdessusm, From 90s Crisis to a New Era, (Paper presented at the Conference in International Management Research Institute, Madrid, Spain, 27 November 1999).
[110] For discussion of the first- and second-generation reforms of the international community, see Eduardo Aninat, ‘Adjusting to a Globalized Economy’ (Speech delivered at the second Annual Americas Forum, The Institute of the Americas and the University of California, San Diego, La Jolla, California, 13 October 2000).
[111] See, World Bank, Articles of Agreement of the International Bank for Reconstruction and Development (1989) [art I, sec 10]
<http://web.worldbank.org/WBSITE/EXTABOUTUS/O> at 15 October 2007.
[112] See Jonathan Cahn, ‘Challenging the New Imperial Authority: The World Bank and the Democratization of Development’ (1993) 6 Harvard Human Rights Journal 163. See, also, Ibrahim Shihata, ‘The World Bank and Governance Issues in Its Borrowing Members’ in Franziska Tschofen and Anthony R. Parra (eds) The World Bank in a Changing World (1991) 79-80.
[113] Cahn, above n 112, 164. See, also, Sarkar, above n 3, 48.
[114] IMF, ‘IMF Approves SDR 15.5 Billion Stand-By Credit For Korea’ (Press Release No.97/55, 4 December 1997). See, also, IMF, ‘Camdessus Welcomes Conclusion of Talks with Korea on IMF Program’ (News Brief No. 97/27, 3 December 1997)
[115] IMF, ‘IMF Approves SDR 15.5 Billion Stand-By Credit For Korea’, above n 114.
[116] Ibid.
[117] See, Multilateral Investment Guarantee Agency, Convention Establishing the Multilateral Investment Guarantee Agency (1985)
<http://www.miga.org/sitelevel2/level2.cfm?id=1107> at October 15, 2007.
[118] Prior to the setting up of the WTO, a country could decide by itself the term of patents. After the establishment of the WTO, all its Members must guarantee 20 year patent rights.
[119] In fact, through the operation of such provisions, the United States successfully challenged the Canadian Patent Act which provided for a term of 17 years for patents. On 6 May 1999, pursuant to Article 4 of the DSU and Article 22(1) of the GATT 1994, the United States requested consultation with Canada regarding the term of protection granted to patents that were filed before 1 October 1989 in Canada. On 11 June 1999, the United States and Canada started consultation, but failed to reach a solution. The United States requested the establishment of a Panel on 15 July 1999. The Panel was established on 22 September 1999. The Panel report was circulated to the Members on 5 May 2000. See Canada – Term of Patent Protection Report of the Appellate Body, WT/DS170/AB/R (2000).
[120] Article 41(2) of the TRIPS provides: ‘Procedures concerning the
enforcement of intellectual property rights shall be fair and equitable’. Article 1 of the GATS states: ‘In fulfilling its obligations and commitments under the Agreement, each Member shall take such reasonable measures as may be available to it to ensure their observance by regional and local governments and authorities and non-governmental bodies within its territory’. In various other provisions, the GATS requires a reasonable standard to be followed by the Members in implementing their obligations. The GATT also contains many provisions requiring the Members to take reasonable measures. The terms ‘fair and equitable’ and ‘reasonable’ are sometimes used alternately within the WTO system.
[121] Article 41(4) of the TRIPS provides: ‘Parties to a proceeding shall have an opportunity for review by a judicial authority of final administrative decisions’.
[122] General Agreement on Trade in Services, Marrakesh Agreement
Establishing the World Trade Organization, Annex 1B, opened for signature 15 April 1994, 1869 UNTS 184, arts 2, 4 and 17.
[123] According to Article 17 of the GATS, the national treatment is conditional on the specific commitments made by the WTO Members.
[124] General Agreement on Trade in Services, Marrakesh Agreement
Establishing the World Trade Organization, Annex 1B, opened for signature 15 April 1994, 1869 UNTS 184, art 7.
[125] General Agreement on Trade in Services, Marrakesh Agreement
Establishing the World Trade Organization, Annex 1B, opened for signature 15 April 1994, 1869 UNTS 184, art 3; The General Agreement on Tariffs and Trade, opened for signature October 30, 1947, 55 UNTS 187, art 10. The TRIPs ensures transparency by stipulating specific requirements regarding hearings and principles to be followed by the administrative and judicial bodies and rules of evidence. See Trade Related Aspects of Intellectual Property Rights, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, opened for signature 15 April 1994, 1869 UNTS 299, part III.
[126] General Agreement on Trade in Services, Marrakesh Agreement
Establishing the World Trade Organization, Annex 1B, opened for signature 15 April 1994, 1869 UNTS 184, art 3.
[127] The General Agreement on Tariffs and Trade, opened for signature October 30, 1947, 55 UNTS 187, art 10(3). Article 6(2) of the GATS requires the Members to ensure ‘objective and impartial’ treatment of foreign services and service suppliers. On WTO members’ obligation relating to the implementation of their international commitments in a uniform, impartial and reasonable manner, see the Appellate Body Report on European Communities – Selected Customs Matters, WTO Doc WT/DS315/AB/R (2006).
[128] General Agreement on Trade in Services, Marrakesh Agreement
Establishing the World Trade Organization, Annex 1B, opened for signature 15 April 1994, 1869 UNTS 184, art 3.
[129] European Communities – Regime for the Importation, Sale and Distribution of Bananas – Recourse to Article 21.5 by Ecuador, WTO Doc WT/DS27/RW/ECU (1999).
[130] The WTO has a mechanism authorizing its members to take retaliatory measures against the Member in violation of the WTO Agreement. For discussion on this issue, see Guiguo Wang, The Law of the WTO: China and the Future of Free Trade (2005) Chapter 7.
[131] An example is the Energy Charter Treaty which requires its contracting parties to accept the compulsory obligation to have their disputes with foreign investors settled through international arbitration. For details, see Guiguo Wang, International Investment Law (2001). Modern bilateral investment treaties also often contain compulsory arbitration provisions by which host governments may be forced to have their disputes with foreign investors settled by an international arbitral tribunal, in most cases with help of the procedures of the International Center for the Settlement of Investment Disputes of the World Bank.
[132] For more discussion, see Guiguo Wang, ‘The Impact of Globalization on State Sovereignty’ (2004) Chinese Journal of International Law 473-483.
[133] This is first reflected in the laws relating to international trade, finance, investment, taxation and intellectual property protection, followed by those relating to environment protection, development, human rights, competition, trade facilitation and government procurement. Such convergence is not simply a transplant of the laws of one country to another, or incorporation of the provisions of international treaties into the national laws, it is directly related to the legal culture, legal concept, legal value, legal spirit, legal policy and legal environment of the countries concerned. It is not restricted to similarity in general legal provisions, but more importantly, the methods, rules and standards of law interpretation.
[134] International agreements affect all of the countries in the world, including those with relatively complete legal systems. For instance, evidence shows that international treaties had substantial effect on the national laws of France. The French laws on human rights were much revised as a result of the application of international treaties. For discussions on the issue, see Remy Cabrillac, ‘Two Centuries of the Evolution of the French Civil Code’ and Jean-Baptiste Seube, ‘The Influence of International Conventions on French Civil Law’ (Papers presented at the Conference on the 200th Anniversary of the French Civil Code, Hong Kong, 9-10 November 2004).
[135] Sarkar, above n 3, 38.
[136] John Lewis, ‘Development Assistance in the 1980s: Some Propositions Relating to A New Aid Approach and Operational Issues’ (1984) 14 Journal of Development Planning 80-81.
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