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4 160 ROBERT WOLFE Table 1. Illustrative WTO transparency provisions Principle Examples Publication of international obligations Tariff schedules General clarity in domestic trade policy Trade policy review mechanism Publication of laws and regulations GATT Article X; GATS Article III; TRIPS Article 63 Notification of new measures to trading partners Uruguay Round decision on notification procedures Enquiry points for trading partners SPS; TBT Independent administration and adjudication Telecoms reference paper Internal transparency Geneva Week for non-resident delegations External transparency Extensive website; public symposia greater transparency within their own systems, acknowledging that the implementation of domestic transparency must be on a voluntary basis and take account of each Member s legal and political systems. A third and more formal type of transparency is the many provisions requiring publication of all legal requirements affecting trade, and publication in sufficient time for anyone affected by the rules to know about them before they come into force, both to allow time to comment and time to prepare to take advantage of the new opportunities created. The agreements also have dozens of provisions requiring Members to notify each other through the Secretariat of changes in their rules. Given the complexity of measures affecting trade, some agreements require the establishment of an Enquiry Point where other Members can obtain information on domestic regulations. The final form of regulatory transparency is independence from the executive. The WTO secretariat thinks that transparency can be especially important with respect to domestic regulations aimed at legitimate public policy objectives that might affect international competition, such as public health or protection of the environment. The task of balancing the need to defer to domestic policy objectives while ensuring that such policies are not a disguised restriction on trade may be facilitated by the transparency that allows other Members to know what is happening, with a right to comment before an administrative agency that itself has a high degree of autonomy from the executive (WTO, 1999). 1 The texts of WTO agreements have much less to say about internal and external transparency. The importance of these principles was recognized in Paragraph 10 of the Doha declaration, but not as subjects for negotiation. The WTO is more open to the public than it used to be, and great efforts have been made to improve the participation of all Members in the organization s work, but whether the results are adequate is the subject of another paper. 1 The WTO agreements also embed the related idea familiar in administrative law that official discretion must be subject to review. Whether the dispute settlement system is the best or only means of such review is a separate question (Wolfe, 2002b).
6 162 ROBERT WOLFE Canadian proposal (G/C/W/379) in effect suggests that its experience with regulatory reform (OECD, 2002) can be generalized. The United States (G/C/W/384) contributed an overview of mechanisms used by its own authorities in ensuring transparency. The ministerial declaration mentions the need for technical assistance with trade facilitation, and Quad countries express willingness to provide help with all aspects of transparency, from creating web sites to developing a legalized appeals system for administrative decisions. Other Members seem less enthusiastic about this ambitious trade facilitation agenda. Codification of ideas current in North America or Europe will not by itself change administrative law practice in countries where these ideas have yet to take root, and technical assistance may therefore be beside the point. Whether or not the Singapore issues move towards full negotiations after Cancun, the transparency dimension of these and other domestic regulatory issues, notably in the GATS, will only grow in importance for WTO Members. We can learn more about their relevance for the future of the WTO by looking at how existing provisions work. 2. Investigating transparency in telecoms and food safety The future of the WTO, I argue, depends on a resolution of the difficulties posed when agreements adapt regulatory modes that some Members find obvious but others find difficult. The importance of the transparency norm for new issues under negotiation makes an investigation of existing requirements a timely test of the governance implications of the WTO. I find, in brief, that transparency can be hard for developing countries, but the difference between countries and sectors is significant. In this section, I explain the method of my investigation and then report the results. 2.1 Method In order to test my assumptions about WTO transparency, I decided to compare the experience of developed and developing countries, and to conduct the comparison in two sectors. I thought that in the domain of administrative law, Canada would be a reasonable surrogate for the other advanced economies in the Atlantic area. I know that Canadian officials played a major role in developing the concepts used in the two agreements I chose. It is a reasonable assumption, therefore, that the governance rules implied are ones that reflect Canadian administrative practice. For purposes of comparison, I wanted to choose countries in each of Asia, Africa and Latin America, and I wanted countries that were serious about their participation in the trading system. My first choices, therefore, were Thailand, South Africa, and Brazil, all countries who are active in the WTO and in the Cairns Group of major agricultural exporters. They are all middle-income countries, however; as a further point of comparison, therefore, I chose an LDC, Uganda, a country with reasonably good governance in African terms.
9 Regulatory transparency, developing countries and the WTO 165 dispute. Evidence is hard to find. No transparency-related disputes have been launched with respect to the Reference Paper. Telecoms under the GATS has no analog of the SPS Committee (negotiators were reluctant to create a monitoring mechanism), and so observers have no sense of the sort of questions regulators might pose to each other if they had a chance to meet at WTO. That said, while we observed degrees of transparency and independence, it appears that all the target countries, with the exception of Thailand, which has yet to adopt the Reference Paper principles, have established an independent regulator, competitive safeguards, and made licensing requirements and decisions publicly available. South African implementation of the Reference Paper, for example, is generally good, if not perfect (Cohen, 2001). The difficulty with the agreement seems to lie in providing consumers and producers with the ability to comment on proposed regulations. In particular, enabling producers to appeal licensing decisions appears problematic. Questions also remain about the true independence of some of the regulatory agencies, notably in South Africa. Other problems, like the territorial size of a country like Canada, the various levels of government between the municipal, provincial and federal, or the ability to hire qualified staff in Brazil, hamper effective telecommunications administration. Overall, however, convergence in governance models seems easier and more prevalent than I expected. 2.3 Governing food Food has been traded for millennia, but trade in food is now one of the most complex domains of international life because of the challenges of ensuring that food is safe to eat when production and consumption are widely separated in space and time. Plants and animals are as susceptible as people to novel pathogens that can spread rapidly around the globe. Rules adopted in one country are therefore consequential for producers and consumers somewhere else, yet the rules may not appear to serve commensurable ends. The basis of the SPS Agreement, as stated in its preamble, is that no Member should be prevented from adopting or enforcing measures necessary to protect human, animal, or plant life or health, subject to the requirement that these measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between Members where the same conditions prevail or a disguised restriction on international trade (WTO, 1998). A country that fully implements the SPS rules will have a food safety system that will ensure that all food produced for local or foreign consumption, and all food imported, meets or exceeds multilateral standards. Meeting this objective is manageable for Canada, with its sophisticated public administration, advanced administrative law, and an educated public able to implement the myriad details of a farm to fork food safety system. Does it work elsewhere? We know that developing countries face difficulties building an effective regulatory infrastructure (For a review of all WTO documents on SPS and developing countries, see WTO, 2002g). Investigating transparency is one way to find out more about those difficulties.
11 Regulatory transparency, developing countries and the WTO 167 actors cannot play their role in a farm to fork food safety system (Chartier and Gabler, 2001). Compliance with the form of WTO procedures is widespread. Each target country has established an SPS Enquiry Point, for example. We could not assess how well the Enquiry Points work, although we offer comments on the web sites. We know that in the case of the Enquiry Points under the related Technical Barriers to Trade Agreement (TBT), that developing countries can find it hard to respond if they get a large number of requests, and that language can be a barrier to understanding questions. As a document submitted by Malawi illustrates (WTO, 2002c), it can be a challenge for an LDC to create an effective Enquiry Point that can store thousands of documents on technical regulations, standards and conformity assessment procedures for the host as well as other Members. The SPS agreement does not supplement its requirements for regulatory transparency with provisions for what at WTO is called internal transparency, but clearly transparency by others is no use if a country cannot participate effectively. The problems of developing countries in the international institutions are well known (Henson and Loader, 1999; Henson, Preibisch and Masakure, 2001; Jensen, 2002). Canada often sends a dozen capital-based officials to the WTO Committee on Sanitary and Phytosanitary Measures, which monitors the SPS Agreement, but many countries are rarely able to send anybody from the capital. Also important is the work of the three major standards bodies the Codex Alimentarius Commission, the International Plant Protection Convention (IPPC), and the Organization Internationale des Epizooties (OIE). All our target countries belong to Codex and IPPC, and all but Uganda belong to OIE, but we were not able to assess their degree of participation in the committees and working parties of these organizations. We do know that middle- and lower-income countries in general tend to send fewer people to meetings. Those officials that do attend do not necessarily understand all that is said. 2 Developing countries in general also tend to make fewer WTO notifications than the advanced economies, and make less use of the challenge procedures. We were able to investigate this aspect of SPS transparency. The point of notification and publication is first to ensure that exporters have time to adapt to new import rules, and to raise concerns in the committee, but second to use transparency as a constraint on abuse of discretion, and to deter hidden commercial or political pressures on regulators. Accountability and best practice are both enhanced when officials must justify their actions to their peers. The procedure for preparing a notification is clear, if complex, and the information required itself contributes to transparency beyond the simple notification of a new measure. Notifications must indicate not only the responsible agency and the 2 The problem is generic. Developing countries are not active participants in international scientific advisory institutions, whose advice therefore often seems to them to be less than germane. (Biermann, 2002).
12 168 ROBERT WOLFE affected products, usually on a tariff line basis, but also the geographical regions or countries likely to be affected. 3 The summary of the proposed regulation must clearly indicate both its content and the health protection objective. To the extent possible, likely effects on trade should be described. If a relevant international standard, guideline, or recommendation exists, the notification should briefly describe how the proposed regulation deviates from it. (If an international standard does not exist, other provisions of the agreement will require a scientific justification for the national regulation.) The notification also describes regulatory transparency, listing the relevant documents, such as the publication where notice of the proposed regulation appears; and the text or other documents on which the proposal rests. The notification also includes the final date for comments and the agency or authority handling comments. Finally Members should indicate if the texts are available from the national Enquiry Point. Countries with a fully developed regulatory infrastructure will find it easier to gather the information and conduct the analysis that such notifications require, making the number of notifications a broad indicator of a Member s ability to implement the SPS agreement. WTO members have submitted approximately 3,500 SPS notifications since The USA has submitted the largest number, as might be expected. Canada, a rich country with a sophisticated system of social regulations, has substantial engagement in the notifications process, as reported in the Annex. Thailand and Brazil, major exporters and importers of food are also engaged, but less so. South Africa is a weak participant, and Uganda seems marginal. If countries do not understand or cannot make use of the information in a notification in good time, then notifications do not really serve transparency. When countries do understand a notification, they may wish to use the WTO challenge procedures. After an early surge, the WTO dispute settlement system is not much used for SPS; the 21 SPS matters that have been raised there have resulted in only three panel reports, the last some years ago. Much more use is made of procedures for Members to raise specific trade concerns with each other under the provisions of Article 12.2 of the SPS Agreement, which provides for ad hoc consultations. The secretariat has compiled a list of such discussions and their known outcomes (WTO, 2003a). Members raised 154 specific trade concerns in the eight years from 1995 to the end of Developing country Members raised 77 trade concerns, compared with 110 raised by developed country Members and two raised by leastdeveloped country Members. In 98 cases, the measure at issue was maintained by a developed country Member, and in 76 cases it was maintained by a developing country Member. Transparency is mentioned in these discussions, but usually as a factor in relations of Members with each other. Domestic regulatory transparency does not seem to be discussed in this forum. Canada raised 17 concerns, and 3 This paragraph is based on the wording of the sample notification form (WTO, 2002d).
14 170 ROBERT WOLFE Table 3(a). Summary of results, by sector Telecoms (economic regulation) SPS (social regulation) Regulatory transparency Between countries Compliance with WTO formal rules Good Good Within countries Independent regulator Good Fair Openness to citizens Good Fair Ability to comment Good Fair Transparent administrative procedures Good Not clear Internal transparency Participation in WTO Hard to see Fair Participation in other international organizations Good No data Table 3(b). Summary of results, by country Canada Brazil SA Thai Uganda Regulatory transparency Between countries Compliance with WTO formal rules V. good Good Fair Good Weak Within countries Independent regulator V. good Good Fair Weak Fair Openness to citizens V. good Fair Good Good Fair Ability to comment V. good Fair Good Weak Weak Transparent administrative procedures V. good Fair Fair Fair Fair Internal transparency Participation in WTO V. good Good Fair Good Weak Participation in other international organizations V. good No data No data No data No data the SPS agreement, a limited number of technical personnel, limited ability to organize awareness seminars, and inability to attend international conferences, although they can pass laws (WTO, 2002h, Add. 5). My hypothesis at the outset was that since the regulatory requirements of the WTO mirror practice in OECD countries, they will be easy for those countries to implement, but that adoption will be hard for advanced developing countries, and very difficult for LDCs. The investigation reported in the Annex confirms this hypothesis, as suggested by the impressionistic summary in Tables 3(a) and 3(b). I discuss the implications of this result in the next section.
16 172 ROBERT WOLFE as does their level of interest and information. Actors also probably differ if they are importers or exporters, producers or consumers. Similarly, compliance with WTO rules might be easier when power is concentrated and domestic influence is limited. In the telecoms domain, developing countries would have a small number of sophisticated producers and consumers, with a few members of the public having a general interest. In contrast, food safety rules directly affect huge numbers of producers and consumers, with no large player willing to pay the costs of transparency as a public good. With respect to the problem to be solved, where the telecoms agreement is about competition in home and export markets (thus affecting the rights of foreign firms in the domestic market), food safety is about a system that protects the health of citizens, that treats importers fairly, and whose standards will be recognized by importing Members abroad. Implementing WTO rules makes sense for a country trying to attract investment from abroad (telecoms), or trying to export (food, in some sectors of some countries). In a developing country, however, de facto food safety in daily life may be governed by informal (private, voluntary) standard setting bodies. Such entities may not exist in new domains like telecoms, leaving the terrain open to create regulatory bodies based on prevailing international models. In food safety, what a country may do already might be effective because consumers are close to producers, or at least distributors, and so do not depend on a regulator to decide if food is safe. Adapting to international models may be only a cost in such cases. The focus in this paper is on the relative difficulty of the administrative law concepts at stake in the two domains. A factor not considered, therefore, is the diffusion process, and I do not discuss the optimal form of international governance (Abbott and Snidal, 2001) or even the content of the applicable standards. I assume that countries accept WTO rules in good faith, but then face more or less difficulty in living with the results. Do countries converge on WTO rules because of bilateral pressure from major donors or major trading partners? Is trade both a vector for learning and a motivation for change? If it is, looking at imports and exports might be relevant: where exports are high, international standards matter; when they are low, why bother? If imports are high, might a country need to use Codex standards to be fair to importers? Do countries respond to pressure from investors, or do they try to assimilate new international norms? Do developing countries have regulatory infrastructure appropriate to the size of their economy or their trade with the world? Yes, but a limited infrastructure even if it is appropriate today will constrain a country s ability to increase trade both because of problems complying with the rules but also in being able to challenge inappropriate rules used by their trading partners. In any event, this investigation does not challenge my initial assumption that developing countries cannot regulate in the Canadian way any time soon. This conclusion has implications both for continuing efforts to improve existing procedures and for new negotiations.
17 Regulatory transparency, developing countries and the WTO Conclusion The only way any country can be an effective participant in the WTO as it evolves in response to globalization is to have an open and transparent public administration based on a broad consultative process. Negotiators cannot find an appropriate rule if they do not engage the people who will have to live with it. People who do not understand or who were not engaged are unlikely to be able or willing to reproduce the rule in their daily life. This view of democratic global governance may be utopian; it may also be at odds with the views of influential practitioners. Pascal Lamy, the EU trade commissioner, has said (Lamy, 2002, emphasis added) that If I want to impose respect of my strict environmental, sanitary, or phytosanitary rules on developing countries (and I think I have every right and obligation to do so), I have to offer in return better effective access for their products to my markets including through better and more focused technical assistance to help them meet my sophisticated domestic regulations. He thinks it acceptable that countries can buy or coerce respect for their own governance model, and he thinks that technical assistance is sufficient to help developing countries live by EU rules. The results of my investigation of the telecoms and SPS agreements make me skeptical. In the case of economic regulation (telecoms) developing countries are coping with the transparency provisions, but with difficulty. In the case of social regulation (SPS), moving towards northern governance models is harder still, and not just for LDCs. Market access does provide an incentive (not that the EU is prepared to offer much of that, in agriculture), but the impact of technical assistance is limited, because regulatory transparency engages the whole of a country s governance infrastructure, not just a small number of officials in the trade ministry. In the case of the Singapore issues, codification of transparency ideas current in the USA or Europe will not by itself change administrative law practice in countries where these ideas have yet to take root, and technical assistance may therefore be beside the point. A more appropriate objective for a universal trading system without a two tier structure might be to ensure that administrative law regimes meet certain norms for multilateral compatibility, not that they be the same. Investigation of transparency in telecoms and food safety shows that finding an accessible model of transparency, especially in social regulation, is not obvious, but I conclude that the future of the WTO depends on this search. References Abbott, Kenneth W. and Duncan, Snidal (2001), International Standards and International Governance, Journal of European Public Policy, 8 (June): Arthurs, Harry W. (1979), Rethinking Administrative Law: A Slightly Dicey Business, Osgoode Hall Law Journal, 17 (April): (1985), Without the Law: Administrative Justice and Legal Pluralism in Nineteenth-Century England, Toronto: University of Toronto Press.

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