The World Trade Organization and Fitzpatrick’s ‘new constitutionalism’

Chapter 6

The World Trade Organization and Fitzpatrick’s ‘New Constitutionalism’

Fiona Macmillan


This chapter is grounded in Peter Fitzpatrick’s pellucid examination and theorization in a number of works, including of course Modernism and the Grounds of Law (Fitzpatrick 2001), of the relationship between the national and international, or, more specifically, the mutually constitutive relationship between national and international law. More specifically, the chapter engages with aspects of the argument in ‘ “The new constitutionalism”: The global, the postcolonial and the constitution of nations’ (Fitzpatrick 2006). As will just about go without saying to Fitzpatrick’s devoted readership, the article does not embrace that form of ‘new constitutionalism’ that might be identified in the putative embryonic juridical world order asserted by Hardt and Negri (2000). Nor, similarly unsurprisingly, is it a cupbearer for the related form of ‘new constitutionalism’, sometimes identified as emerging from what Richard Peet (2003) has described as the ‘unholy trinity’ of the international economic organizations: the International Monetary Fund (IMF), the World Bank, and the World Trade Organization (WTO). However, my reading of the article is that an effect of the mutually constitutive relationship between national and international law, has been – precisely as a result of the pretension to constitutionalism at the international level of the ‘unholy trinity’, and especially the WTO – the seeping into the national constitutional consciousness of economic or market rights: what Fitzpatrick describes as a ‘pervasion of economic or, more specifically, market relations’ (2006: 9). This is perhaps Fitzpatrick’s form of ‘new constitutionalism’, which he identifies as a consequence of a certain indistinction between the international and the national, ‘an indistinction between what is inside and what is outside’ (ibid.: 6).

Concepts of distinction, indistinction, and mutual constitution are also the leitmotif of this chapter in another way. All are ways of describing the tapestry of scholarship, not as a product but rather as a process that takes place in the intellectual public domain. Distinct ideas closely associated with particular thinkers or schools of thought are often entwined and woven together so that their provenance develops over time. This process is critical to the vibrancy of intellectual life. And while the process itself relies upon the generous participation of many, including those with whom one finds oneself in disagreement, it is also crucially dependent on foundational thinkers. That is to say, the qualities of the tapestry require not just those who weave discrete and intricate designs – as important as these might be – but also a durable loom and carefully placed warp threads. As this chapter seeks to demonstrate, the great contribution of Fitzpatrick’s work is in both the warp and the weft of intellectual life. This chapter adds some embroidery to his foundational work on the relationship between the national and international, but it seeks also to be part of the process of taking forward an aspect of Fitzpatrick’s work in a way that, if not mutually constitutive, at least constitutes a productive line of decoration.

Relationship Between The National and The International

As Fitzpatrick argues, one constitutive claim is that the international is dependent on the national. In this version, as Tony Carty (quoted by Fitzpatrick) has it, there is ‘a void at the very heart of international law which is marked by the myth of international legal order’ (Carty 1997: 10; Fitzpatrick 2006: 6). As Fitzpatrick himself observes, this would, however, ‘involve an impossibly pure plurality, a plurality of singularities’ (2006: 6). Instead, international law, using the two branches of its doctrine of recognition, namely constitutive theory and evidentiary theory, has created a system to which a sovereign state must conform in order to be recognized as such. The criteria laid down for such recognition are ‘derived from the formation of the modern occidental nation . . . peculiarly oriented around an intense attachment to landed territory’ (ibid.: 7), but also being ‘unitary, autonomous, sovereign, and capable of observing the requirements of international law. So, in recognizing a nation state, in the evocation of its existence in terms shared with other nation states, international law constitutes singular entities having the qualities required to constitute it’ (ibid.: 7), thus constituting singular entities as part of a commonality, which, as Fitzpatrick says, must ‘be responsive to the singularity’ (ibid.: 8). However, this commonality ‘cannot be passively responsive . . . since that would leave the only available commonality as an entirely commensurable sameness, and this would be to deny singularity’ (ibid.: 8). Nation, at the same time, must be illimitably responsive to what is outside. Consequently,

the pervasive and illimitable quality of nation’s responsiveness, as well as nation’s constituent relation to the commonalities of the international and the global, result in an indistinction between what is inside and what is outside, and we must expect to find the same phenomena on both sides of the border.

(ibid.: 8)

As a consequence of this type of relation, international law pulls off two impressive tricks. First, it effectively constitutes nations, which in their ‘illimitable responsiveness’ are constantly reshaped by international law; and second, it shapes relations between nations and supranational, international, or, as the WTO would have it, intergovernmental organizations. Since the time of the Washington Consensus, a consequence of both these effects of international law is a pervasion in national constitutions of the language of the market. Fitzpatrick notes that the elbows of the traditional constitutional precepts of democracy, human rights, and the rule of law are rudely jostled by those vulgar newcomers liberalization, deregulation, and privatization. Worse still, the former are instrumentally subordinated to the latter. Notions of ‘good governance’ bred in the bureaucracies of the IMF and the World Bank drive political organization.

This brief account of a part of Fitzpatrick’s argument does it scant justice. I hope, however, that it provides a sufficiently nuanced account of the argument to give some flavour of the way in which its intricacies provide multiple directions for subsequent embroiderers. That said, it is doubtless the case that my account of the argument is affected by the direction in which I wish to take it and the purposes for which I wish to make use of it. (This ineradicable aspect of the scholarly process can be a source of satisfaction, pride, joy, indifference, frustration, and rage, in more or less equal parts, but in a volume like this I hope to have at least avoided the worst of these.) My own needlepoint focuses on the relationship between the political and economic, and the way in which this relationship is refracted in the mutual constitution of national and international law. More specifically, drawing on Fitzpatrick’s account I will argue that these ‘new’ national constitutions have apparently heeded the call for the reintegration of the political and the economic, but something has gone horribly wrong. Instead of this putative reintegration recognizing that the economic is part and parcel of the political, that economic issues are in truth political, the opposite has occurred: the political has become part and parcel of the economic.

Division Between The Political and The Economic at The International Level

The current international legal order, which has emerged since the end of the Second World War, embraces a kind of schism between international economic law and public international law. The institutions of international economic law emerged from the Bretton Woods negotiations, which drew up the charters of the IMF, the International Fund for Reconstruction and Development (which became the World Bank), and the International Trade Organization. Despite being the progeny of Franklin D. Roosevelt’s ‘one-worldism’, the International Trade Organization never came into existence. (Its death knell was the intense opposition that it engendered in the United States (Arrighi 2002: 276–7), although the political and business interests ranged against it were not confined to those emanating from the United States (Dunkley 2001: 26–8). However, it metamorphosed into the 1947 version of the General Agreement on Tariffs and Trade (GATT) and was, accordingly, a precursor to the WTO.) The United Nations organizations, which form the framework for public international law, arose from the Dumbarton Oaks negotiations. From the beginning, the mandates of these two systems of international law were distinct. The Bretton Woods institutions were to manage international economic relations, while the Dumbarton Oaks institutions were to manage the international political order. As part of this mandate the Dumbarton Oaks institutions have taken charge of what have been described as ‘state-making and war-making’ functions (Arrighi 2002: 275). In addition to this, the system of public international law that has been built up around the Dumbarton Oaks institutions has purported to establish international standards in areas such as the protection of human rights and of the environment.

However, the bifurcation of international law along the lines of the putative division between the political and the economic is, I would argue, of greater antiquity and appears to be rooted in the origins of the Westphalia System – one of the more significant moments in what Fitzpatrick calls the ‘inconclusive constituent alternation between nation and international law’ (2006: 7). The principle that quarrels between sovereigns did not implicate non-combatant civilians was built into the Peace of Westphalia of 1648. As a consequence, the treaties that built upon the Settlement of Westphalia abolished trade barriers and sought to protect the rights of private enterprise to trade across state borders, even during times of war or other political turmoil. Arrighi remarks that ‘[t]his reorganization of political space in the interest of capital accumulation marks the birth not just of the modern inter-state system, but also of capitalism as world system’ (2002: 44; see also Polanyi 2001: 16–17).1 This is a key point: under the Westphalian system, political space is organized along national lines, revealing Fitzpatrick’s ‘intense attachment to landed territory’ (2006: 7); economic space both recognizes and transcends the boundaries of political space.

It is true that the economic freedoms of Westphalia were not observed during the period of political turmoil and violence marked by the Napoleonic Wars. They were, however, restored in the Settlement of Vienna of 1815 and the Congress of Aix-la-Chapelle of 1818 (Arrighi 2002: 52). Similarly, after the First and Second World Wars ‘the United States first became hegemonic by leading the inter-state system towards the restoration of the principles, norms and rules of the Westphalia System, and then went on to govern and remake the system it had restored’ (ibid.: 65). Owing to US protectionism, however, this system did not originally embrace multilateral free trade. Instead, we got the GATT, a framework for negotiations for reductions on restrictions on international trade in goods. Using the GATT, the US government was able to control the process of trade liberalization in ways that benefited US interests. Thus, the period of US dominance has witnessed only a gradual move to a more widely articulated free trade regime.

This gradual movement is closely associated with a major feature of the post-war international landscape. This was the reconstruction of the post-war world markets through the process of direct investment rather than through trade. The engine of the process of direct investment was the vertically integrated multinational or transnational business enterprise, in which the process of international trade was effectively ‘internalized’ (Arrighi 2002: 72–3; see also Dunkley 2001: 25, citing Wilcox 1949: chs 2–3). Despite many attempts to do so, it is difficult to overstate the significance of this phenomenon. As Arrighi so pithily puts it:

By about 1970 . . . transnational corporations had developed into a world-scale system of production, exchange and accumulation, which was subject to no state authority and had the power to subject to its own ‘laws’ each and every member of the inter-state system, the United States included . . . The emergence of this free enterprise system – free, that is, from the constraints imposed on world-scale processes of capital accumulation by the territorial exclusiveness of states – has been the most distinctive outcome of US hegemony. It marks a decisive new turning point in the process of expansion and supercession of the Westphalia System, and may well have initiated the withering away of the modern inter-state system as the primary locus of world power.

(2002: 74)

The growth of the power of multi- or transnational corporate enterprises was one of the startling features of the twentieth-century landscape. The outcome is a system that is free from any constraints on ‘world-scale processes of capital accumulation’ that might have been imposed by the territorial exclusivity of states. This involves an autonomy from both political and economic control that, especially when put alongside the changes in the character and constitution of state power, endows multinational enterprises with the capacity to affect the order of things across the putative divide between the economic and the political.

Faux Integration?

From their inception, little was provided in the way of legal linkage between the Bretton Woods and the Dumbarton Oaks institutions. Nominally, the Bretton Woods institutions were established within the UN system (Dunkley 2001: 26–7),2

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