WTO and Human Rights

© Springer International Publishing Switzerland 2015
Norman Weiß and Jean-Marc Thouvenin (eds.)The Influence of Human Rights on International Law10.1007/978-3-319-12021-8_11

11. WTO and Human Rights

Stefan Lorenzmeier 

University of Augsburg, Augsburg, Germany



Stefan Lorenzmeier

11.1 Introduction

International law is a normative system1 but is more than a set of independent rules. Yet normative conflicts are endemic in international law.2 The international rules on world trade and human rights are often regarded as conflicting legal branches in the system of international law. Both sets of rules are distinct but not independent from each other and impacting the respective legal order.3 International human rights rules can constitute an impediment to trade liberalisation as established by the WTO. For instance, they could be used as a ground of justification for not exporting a good from a country that does not apply the same human rights standard. The Director General of the WTO, Pascal Lamy, implies a more positive understanding of the two regimes by stating that “trade and human rights are mutually supportive”,4 which at least indicates a rather fruitful than opposing relationship.

The aim of this article is to scrutinise whether and to what extent Human Rights law influences the WTO legal regime. This will be addressed from the perspective of trade rather than human rights. It will inquire whether and in which ways the WTO regime can be interpreted and seen in light of human rights rules and not whether human rights can be influenced by trade rules. This perspective is important, due to the often-addressed problem of the fragmentation of Public International Law. This means, in effect, that the influence of an extraneous legal rule in one regime cannot necessarily be extended to another legal regime, e.g., the influence of international human rights rules on the WTO system might differ from the influence of the WTO system on international human rights rules. The frequently expressed argument that trade agreements are sub-optimal for protecting human rights is not fully conclusive, because a number of factual relationships exist between these two sets of rules.5

11.2 General Remarks: Clinical Isolation and Conflict of Norm Rules

In this context, it has to be ascertained firstly whether a legal relationship between the two sets of rules can be established. The WTO legal system does not constitute a self-contained regime, unlike the rules on diplomatic and consular relations,6 and the application of other international rules in the WTO system is not excluded. In this respect, the statement of the Appellate Body in US-Gasoline in 1996 became famous. The Appellate Body stated explicitly that “WTO law cannot be read in clinical isolation from other rules of international law”.7 Hence, the World Trade regime can be influenced by other international rules, such as international Human Rights law.

Secondly, in Public International Law, parallel norms on the same subject matter are vertical and may raise conflicts between different layers of regulation.8 Conflicts arising between the two sets of rules could be solved by the applicable conflict of norm rules in international law. On the international level, both sets of rules are independent from each other and do coexist without paying regard to the other set of norms, because Public International Law does not entail a hierarchy of norms-principle, with the exception of the principle of ius cogens. 9 Human rights are part of treaty and customary law, which is of special importance, because not all WTO members are members of the basic international human rights instruments, the International Covenants on Civil and Political Rights and on Economic10 and on Social and Cultural Rights11. Thus, both sets of conflicting rules, WTO treaty law and the human rights treaty or customary law are on the same international level, as long as the latter set of rules does not form part of the ius cogens category.12 In such an instance, the human rights rule would trump the treaty trade law rule and a conflict of norms would not exist, due to the non-application of WTO rules.

Unfortunately, the conflict rules of lex specialis and lex posterior cannot be used for the dissolution of a potential conflict in the situation at bar. Each set of rules is only applicable in the context of the same subject matter of the conflicting rules, and trade and human rights do not belong to the same regulatory subject. This is also founded in the aforementioned idea of fragmentation of international law.13 The notion means that in the international legal system, unrelated specialised rules and sub-systems flourish and the answer to legal questions becomes highly subjective and dependent upon the focused legal system.14 Tensions concerning trade and environmental rules occur regularly in the ambit of the WTO system,15 but the relationship between trade and international human rights has not been explicitly addressed until now. Another issue in this regard is the jurisdiction of the deciding body. Such a body, in most cases a WTO panel, gains its competence from its founding treaty, for instance Art. 3 DSU, and is remitted with the task of interpreting trade agreements. This is due to the need to find an interpretation that embraces the interests of all of the WTO members and also preserves the integrity of the legal system.16 It will always lead to an approach more favourable towards trade than to the application of the conflicting regime, in this case, international human rights. From this, some scholars draw the conclusion that the challenge of defragmentation is best addressed by means of international governance, i.e. closer cooperation and coordination between the conflicting regimes, instead of international jurisprudence.17 Although global governance, as a soft way of mitigating differences, may lead to some practical results, it still cannot resolve the problem of a hard conflict, which must be decided by jurisdictional organs, and is the focus of scrutiny in the article at hand.

11.3 Relevance of International Human Rights Law for the WTO

The relevance of International Human Rights Law for the WTO legal order is still unresolved and a matter of legal dispute, yet the relationship between the two sets of rules might become more significant in the future, as the WTO sees itself as the basic constitution-like treaty framework for international trade. The WTO regime focuses on the liberalisation of international trade and not on other international subject matters, such as human rights. Yet the drafters broadened, in some instances, the scope of the agreements to human rights, and as such the WTO system is not absolutely oblivious to human rights.

Human Rights law is relevant for the WTO at two distinct levels. Firstly, it may be relevant as part of the ratification process, because the WTO agreements have to be compatible with the respective national legal order of the ratifying state.18 This aspect will not be closely examined in this contribution due to its dependency on the different national legal systems and their varying standards of human rights protection. Secondly, and more importantly, it may be relevant within the WTO legal order itself. For this it would be required that either the WTO agreements accept the application of human rights rules or they have to be regarded as extraneous rules that influence the WTO agreements.

In particular, human rights form a substantive part of the TRIPS agreement. Patent protection as a part of one’s own property right is a well-respected human right. Moreover, Art. XX lit. a) and b) GATT, which speaks of the protection of public morals and human life, respectively, as a means of justifying trade restrictions, has a link to human rights. From this it has to be inferred that some sort of human rights rules are already enshrined in the WTO legal system.19 Factually, the relationship between human rights and trade is rather interesting. Human rights protection can be regarded as a production factor that increases the price of a product or that can be used for the protection of the home market against imported products. Both effects are a hindrance to international trade and, as such, an obstacle to the WTO rules, as they constitute a non-tariff trade barrier, falling within the ambit of Art. XI para. 1 GATT.

It has to be kept in mind that the enforcement of human rights would be subjected to a DSB panel, whose trade expert panellists are likely to treat the extraneous topic with disfavor.20 Additionally, there is a constitutional issue, namely; whether it is acceptable for a state to maintain trade relations with states that do not accept or respect core standards of human rights.21

11.3.1 Treaty Interpretation: Art. 3.2 DSU

The cornerstone of this analysis, the application of external rules within the WTO agreements, is the aforementioned ruling of the Appellate Body in US–Gasoline in 1996 and its famous statement that “WTO rules cannot be read in clinical isolation from other rules of international law”.22 Yet this very early statement of the Appellate Body does not shed light on the effect of other rules of international law on the WTO. This has to be determined by the covered agreements themselves. The general rule in this respect is entailed in Art. 3.2 DSU,23 which concerns the clarification of the WTO norms by means of the existing “customary rules of interpretation of public international law”. These customary rules are codified in Arts. 31 and 32 of the Vienna Convention on the Law of Treaties (VCLT)24 Perhaps the most relevant influence of Human Rights law on other fragmented areas of Public International Law is effected by teleological treaty interpretation under the heading of an “evolutionary” or “dynamic” interpretation.25

The unmodified application of the customary rules of interpretation in the WTO system is not unproblematic, due to the VCLT’s establishment of an objective test, without paying less regard to the respective subject matter of a treaty. This is at odds with the Appellate Body’s approach to interpreting a treaty in a subjective manner, with a special emphasis on the “trade” part of the WTO system.26 This bias may be due to the rather special language of Art. 3.2 DSU, which stresses the tasks of the panels as providing “security” and “predictability” to the members. Yet such an interpretation of the task of the panels is not fully conclusive. Security and predictability can be achieved in a number of ways. A legal interpretation of the covered agreements, in light of other rules of international law, achieves a homogenous legal order for the respective member states and would therefore be an achievement. Moreover, an integrated legal order provides stability for the member itself and its trading partner because they are aware of the full spectrum of applicable rules in a given trade-related context. Hence, the wording of Art. 3.2 DSU should be correctly understood in a modern, integrative manner.

Such a reading is supported by the systematic interpretation of the DSU. Art. 7.2 DSU has a limited wording compared to Art. 3.2 DSU, but its scope is limited to the mandate of the panel and does not entail the applicable law. Art. 11 DSU requires the panel to conduct an objective assessment of the matter before it, which does not exclude external legal rules. Art. 19.2 DSU is simply a restatement of the general rule embodied in Art. 3.2 DSU, namely, that judicial organs can only interpret the law and not create it.27 Thus, a panel is certainly bound to interpret the covered agreements and cannot add or diminish rights entailed in them, yet the exact content of these rights can be determined by the panels “in light with other applicable rules of Public International Law”.

This view is not relativised by “effective interpretation”, according to which a treaty provision should be given full effectiveness by its interpreters. The effectiveness of a treaty is dependent upon its context in the network of other rules of international law. So far, the Appellate Body has deployed the technique of effective interpretation to preserve the status quo and not to open new pathways for the members by applying a rather cautious interpretation of the covered agreements.28

Furthermore, even if the panels do not interpret a single treaty but a network of treaties,29 it should be kept in mind that the obligations established under the WTO agreements are generally bipolar in nature between the individual members of the organisation and are not owed erga omnes. This construction of the WTO treaties permits a perfect fine-tuning of the individual member’s rights and obligations under the treaties.

11.3.2 Art. XX GATT in Light of Human Rights

The GATT is part of the covered agreements within the meaning of Art. 3.2 DSU. Besides the rules on trade liberalisation, it also contains rules on the restriction of the free flow of goods. In the context of applying human rights norms in the GATT, Art. XX GATT, which entails general exceptions to the agreement,30 is of special importance. Lit. a) permits the member states to enact measures “necessary to protect public morals”, while lit. b) is concerned with national measures “necessary to protect human […] life”. Both clauses are subject to the chapeau of art. XX GATT, which requires that the measures “are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail or a disguised restriction on international trade”.

The pertinent question is whether the said provisions permit recourse to human rights protection. Not followed will be the scholarly opinion that products that have been made in violation of core human rights standards are not “like” products in the meaning of the GATT. This view does not pay sufficient regard to the accepted definitions of the term “like product” as it is frequently used by the WTO Dispute Settlement Body.31

The International Law Association has declared “that WTO members and bodies are legally required to interpret and apply WTO rules in conformity with the human rights violations of WTO members under international law”.32 Such a view is not undisputed. Firstly, the principle of inter-temporality may constitute an obstacle for such an interpretation. According to a famous statement of Judge Huber in the 1928 Island of Palmas arbitration, “a juridical fact [must] be appreciated in the light of the law contemporary with it, and not the law in force when a dispute in regard to it arises or falls to be settled”.33 Yet this concept does not apply when the concepts of the interpreted treaty are either open or evolving and rules of international law subsequent to the conclusion of such a treaty can be taken into account.34 The mentioned Appellate Body’s permanent jurisprudence on the openness of the GATT35 supports the conclusion that the rule of inter-temporality shall not be used in the context of the interpretation of Art. XX GATT. Additionally, due to the separate legal identity of the GATT 1994 to the GATT 1947,36 it is rather doubtful that the corpus of human rights law, which already existed in 1994 but not necessarily in 1947, would not have been respected by the drafters of the 1994 treaty.

Secondly, the problems arising from extraterritorial application of a member’s national law on another member, as well as the control of the production and processing methods in an exporting country of a good by an importing state, are also at stake. These issues will be dealt with in detail in the context of the interpretation of Art. XX lit. a) and b) GATT.

11.3.3 Protection of Public Morals, Art. XX Lit. a

Art. XX lit a) GATT37 has rarely been invoked in WTO disputes.38 Despite this, the provision entails great potential for the justification of national measures.39 At stake for this article is whether the term “public morals” can be understood to include human rights norms. In the interpretation of WTO panels, “public morals” by way of an autonomous interpretation refers to “standards of right and wrong conduct maintained by or on behalf of a community or nation”.40 In light of this reasoning, purely national standards of a WTO member define the notion of public morals. Hence, it also encompasses national human rights and social standards of the member relying on the exception.41 Moreover, the standard of protection has to be seen in an evolutionary manner. Hence, it is always the individual member’s standard of protection at the time of invoking the norm that is relevant. As a result, Art. XX lit. a) GATT refers inherently to human rights applicable in a state, including international human rights if they have become part of national law.

Further, at question is whether the production and process method (PPM) in the exporting WTO member state can be used for the importing member to rely on the public moral exception, which also addresses the problem of extraterritorial application of the exception clause. If this were the case, a state may impose trade sanctions against the production process of a good and not only in respect of the objective characteristics of a product itself.42 In this instance, two cases have to be distinguished. Firstly, the applicable human rights rule applies to both states. In this instance, a violation of the state sovereignty of the exporting member cannot be seen because the breached human rights rule applies in its legal system as well. The invocation of the importing member does not violate the exporting member’s state sovereignty, due to a missing legal link between the two states. The importing state is unable to alter the legal system in the exporting state, and therefore any measure is as such neutral. A violation of the principle of non-intervention is not given by any impact of a state’s measure on another state,43 although it is difficult to draw a definite threshold.44 In such an instance, restrictions on the product, as well as the production and processing process, are covered by the term “public morals”.45

Secondly, the situation differs when the invoked national or international human right is only applicable in the importing member’s jurisdiction. In this case, the importing state would apply his own laws extraterritorially and tries to influence indirectly the other member’s legal regime by transferring its own moral values to the exporting state. This is much closer to a prohibited form of intervention than the first hypothetical because individuals in another state, rather than in the importing state, shall be protected.

Another aspect of the invocation of Art. XX lit. a) GATT is that the measure must be taken “to protect” public morals, which definition is part of a scholarly debate. At the centre of the debate is whether a nexus exists between the protected public moral in the importing state and the imported product. According to the stated presumption, the international human right at stake, e.g. the prohibition of child labour, is part of the public morals of the importing state, and this state has banned all sorts of child labour. Yet the imported good is produced by means of child labour in the exporting state, which, for the sake of the argument, is not bound by the international human right in question (child labour). A further result of the ban would be the protection of children in the exporting state. In the described situation, it is argued that the nexus between the protected public moral and the product is rather insufficient46 and that the systematic interpretation of Art. XX GATT would clearly show that PPMs are only covered in the context of Art. XX lit. e) GATT.47 The latter view is not necessarily convincing. The existence of Art. XX lit. e) GATT could also be used for the opposite argument that the GATT is not oblivious to PPMs.48

In light of the stated reasoning, neither the wording nor the systematic interpretation of Art. XX lit. a) GATT excludes the application of the provision to PPMs. The argumentation of the Appellate Body in the Shrimps case cannot be used because the protected species were highly migratory and at least at some moment in time also in the exclusive economic zone of the US.49 On the contrary, the recent ruling of the Appellate Body in EU-Seals is supporting the proposed reading of the provision. In that case, the EU was justifying its import ban on seal products from Greenland, Norway and Canada with the high importance of moral concerns for the protection of animals in the European legal order.50 The hunting method of seals is a production method and, because it does not take place on the territory of the European Union, it expands its legal order to other members of the WTO.51

Next, the teleological interpretation may shed some light on the legal problem at bar. The object and purpose of Art. XX lit. a) GATT is the protection of public morals in the importing state. Some scholars limit the scope of Art. XX lit. a) GATT to either dangers stemming from the imported product or protectionist measures if these are applicable to the exporting and the importing state.52 Such a reading does not seem fully convincing as an effective protection of public morals. Properly understood, the protection is not limited to dangers stemming from the imported product, but it covers the production method as well if it constitutes a potential danger to the public morals in the importing state. It is not necessary that the protected public moral also applies in the exporting state. This reading of the provision would not lead to a direct extraterritorial application of the norm, which would be rather problematic53, and would establish a reasonable nexus between the imported product and the public morals in the importing state.

The term “public morals” has to be interpreted in an evolutionary manner, and it is not restricted to the product but has a broader ambit and also covers the production and/or processing method of a product. In an interdependent and globalised economic world, it is no longer apt to distinguish between the product and its production process because both are part of the same mechanisms, the production of a good. Moreover, second generation human rights, in particular economic and social human rights, are aimed at the production process and are also part of the interpretation of the term “public morals” in line with human rights provisions. Second generation human rights as embodied in the International Covenant on Economic, Social and Cultural Rights54 are, to some extent, full and enforceable rights. The proposed view is also in line with the Appellate Body’s ruling in the Shrimps case, in which it had been held that for the interpretation of Art. XX lit. g) GATT, the applicable rule for the interpretation of the norm must not be applicable between all WTO members.55 Such an interpretation has to be distinguished from the application of an extraneous rule of public international law in the WTO legal order, in accordance with Art. 3.2 DSU and the customary rule of interpretation codified in Art. 31 para. 3 lit. c) VCLT.56 Finally, the reading of Art. XX lit. a) GATT in light of its object and purpose would strengthen the international legal order and provide human rights norms with a proper application within the GATT system and mitigate the fragmentation of public international law. The broad interpretation of “public morals” is not at odds with its legal nature as an exception clause. Generally, these clauses are to be interpreted restrictively, and the exception needs to be proved.57 Yet this does not exclude an interpretation in light of the object and purpose of the norm, which would, in our case especially, respect the—in the realm of the GATT accepted—principle of evolutionary interpretation and the panel’s jurisprudence that Art. XX GATT is not necessarily to be interpreted narrowly.58 This reading cannot be qualified as an overruling of the strict interpretation clause because the parties usually do intend such an interpretation.59 Hence, the proposed understanding is within the norm’s scope.

As a result, international human rights norms can have a considerable effect on the interpretation of the term “public morals” in Art. XX lit. a) GATT. In the author’s view, the provision entails the application not only of human rights norms on the product itself but also of human rights in the production process.

11.3.4 Protection of Human Life or Health, Art. XX Lit. b) GATT

The exception laid down in Art. XX lit. b) GATT60 concerning the protection of human life could also be applicable. Therefore, it has to be interpreted to respect human rights obligations.61

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