The WTO legality of the EU's GSP+ arrangement Dr Lorand Bartels ...

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A. The conventions1. ‘Development, financial and trade needs’In Recital 7 to the GSP Regulation, the EU gives the following rationale for its GSP+preferences:The special incentive arrangement for sustainable development and good governanceis based on an integral concept of sustainable development as recognized byinternational conventions and instruments such as the UN Declaration on the Right toDevelopment of 1986, the Rio Declaration on Environment and Development of1992, the ILO Declaration on Fundamental Principles and Rights at Work of 1998,the UN Millennium Declaration of 2000 and the Johannesburg Declaration onSustainable Development of 2002.Consequently, developing countries which due to a lack of diversification andinsufficient integration into the international trading system are vulnerable whileassuming special burdens and responsibilities due to the ratification and effectiveimplementation of core international conventions on human and labour rights,environmental protection and good governance should benefit from additional tariffpreferences. These preferences are designed to promote further economic growth andthereby to respond positively to the need for sustainable development. … (emphasisadded)In summary, the EU’s GSP+ preferences are designed to compensate countries for ‘assumingspecial burdens and responsibilities due to the ratification and effective implementation ofcore international conventions’ by ‘promot[ing] further economic growth and thereby …respond[ing] positively to the need for sustainable development’. This is more easilyunderstood when turned around: additional preferences will lead to ‘economic growth’ forcertain countries, this being compensation for the expense incurred by those countries when(voluntarily) they seek to improve their ‘need for sustainable development’ by ratifying andimplementing the listed conventions. It is not entirely easy to identify the ‘development,financial or trade need’ in this rationale. On the one hand, it seems to be consideredequivalent to the ‘need for sustainable development’, while on the other it seems more limitedto the expense involved in seeking to improve this ‘need’. Nonetheless, it is not necessary toattempt to parse these possibilities, as the EU’s rationale is in any case of secondaryimportance in determining the legality of the EU’s GSP+ arrangement.The proper approach to this question is to begin with first principles: to interpret the meaningof the treaty term ‘development need’ 31 in its legally relevant context. 32 This, as US – Shrimpmade clear, includes the acknowledgement, in the Preamble to the WTO Agreement, of theobjective of ‘sustainable development’, 33 and, as the Appellate Body did in that case, it seemsappropriate to look to other legal instruments to gain an understanding of the current meaningof the concept of ‘development need’. A good starting point would seem to be the 1986 UNDeclaration on the Right to Development, which stated that ‘development is a comprehensiveeconomic, social, cultural and political process, which aims at the constant improvement ofthe well-being of the entire population and of all individuals on the basis of their active, freeand meaningful participation in development and in the fair distribution of benefits resulting31 It is not necessary to discuss ‘trade’ or ‘financial’ needs.32 Art 31(3)(c) of the Vienna Convention on the Law of Treaties. The context includes the term‘sustainable development’, found in the preamble of the WTO Agreement, and somewhat oddlyomitted from the list of instruments in Recital 7.33 WTO Appellate Body Report, US – Shrimp, WT/DS58/AB/R, adopted 6 November 1998, paras 129-30. It is a matter of some curiosity that Recital 7 of the GSP Regulation omitted to mention this, whilelisting a variety of other instruments relevant to the concept of sustainable development.6
therefrom’. 34 To this an intergenerational dimension was added by the 1987 BrundtlandReport, which coined the term sustainable development as ‘development that meets the needsof the present without compromising the ability of future generations to meet their ownneeds’. 35 In recent years, the concepts of development, and sustainable development, havecome to be seen ever more holistically. The 2002 UN Johannesburg Declaration onSustainable Development referred to the ‘interdependent and mutually reinforcing pillars ofsustainable development – economic development, social development and environmentalprotection’. 36 And, strongly influenced by the work of Amartya Sen, 37 the HumanDevelopment Index (and the annual Human Development Reports) prepared by the UNDevelopment Programme (UNDP), defines human development as ‘expanding the choicespeople have to lead lives that they value’. 38Against this background, it seems inappropriate to understand the term ‘development needs’solely in economic terms. 39 Accordingly, one may suggest that perhaps the Appellate Bodymisspoke when it said that a ‘development need’, for purposes of the Enabling Clause, ‘mustby its nature, be such that it can be effectively addressed through tariff preferences’. 40 There isin fact no reason why a ‘development need’ for these purposes needs to be any narrower thanusually understood. On the other hand, this is very far from saying that tariff preferences willnecessarily be able to meet ‘development needs’ without any resource implications. In thissense, there is certainly an economic dimension to the preferences that are protected under theEnabling Clause. The point, however, is that this is ensured by focusing on the link betweenthe preferences and the stated ‘development need’. Thus, it would have been better to say – asindeed the Appellate Body said in the immediately preceding sentence in EC – TariffPreferences – that it is only those tariff preferences that can effectively address legitimatedevelopment needs that have the protection of the Enabling Clause. 41How, then, does this apply to the conventions listed in the EU’s GSP+ program? In general, itcan be said that the objectives of the listed conventions correspond to ‘development needs’,interpreted broadly, in the sense that achieving these objectives usually corresponds to agreater standard of development in those countries. 42 But to require ratification andimplementation of these conventions as a basis for granting additional tariff preferences risksnot granting preferences to countries which do have a relevant need, and granting preferencesto countries that do not have a relevant need.34 UN Declaration on the Right to Development, Adopted by General Assembly resolution 41/128 of 4December 1986.35 World Commission on Environment and Development, Our Common Future (Oxford: OxfordUniversity Press, 1987).36 Johannesburg Declaration on Sustainable Development, 4 September 2002, para 5, available atwww.un.org/esa/sustdev/documents/WSSD_POI_PD/English/POI_PD.htm (visited 25 July 2007). Seealso the very broad definition in set out in the ILA New Delhi Declaration of Principles of InternationalLaw Relating to Sustainable Development, available as UN Doc. A/57/329 (2002).37 See especially Amartya Sen, Development as Freedom (Anchor, 2000).38 ‘What is HD’, http://hdr.undp.org/hd/ (visited 25 July 2007).39 Sen notes that the average life expectancy of black US residents is lower than residents of certaindeveloping countries with a lower per capita GDP: Sen, above at n 37, at 21-3. In this sense, the UnitedStates has a ‘development need’ similar to, if not greater than, some developing countries, though as anon-developing country it remains excluded from GSP benefits under the Enabling Clause.40 WTO Appellate Body Report, EC – Tariff Preferences, para 164.41 Ibid.42 One might be more sceptical of certain extraterritorial aspects of some of the conventions, such asthe requirement in the Genocide and Apartheid Conventions to prosecute these crimes even if they arecommitted outside of the jurisdiction of the ratifying country. It is difficult, if not impossible, to seehow this requirement corresponds to a ‘development need’ of the beneficiary country, even if itcorresponds to a ‘development need’ of the country in which the crime took place.7
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