Posted: June 6th, 2022

Impact of World Trade Organization (WTO) Agreements On Economic

Impact of World Trade Organization (WTO) Agreements On Economic, Social and Cultural Rights
Critically examine the positive and negative impacts of the following three
World Trade Organisation (WTO) agreements on economic, social and
cultural rights:
(a) General Agreement on Tariffs and Trade
(b) General Agreement on Trade in Services
(c) Agreement on Trade-Related Aspects of
Intellectual Property
Rights
Introduction
The World Trade Organization (WTO) is fundamentally an alternative dispute or mediation institution that upholds its member states’ global trade rules. The entity avails a platform allowing member governments to negotiate and resolve the trade matters with other members. Notably, the WTO runs based on formulated agreements that have been approved by many of the global trading countries. These agreements commonly referred to as the WTO trade rules, make the WTO a “rules-based” system. However, it is prudent to note that the rules are agreements negotiated by the governments.
Some of these agreements include the General Agreement on Tariffs and Trade, General Agreement on Trade in Services and the Agreement on Trade-Related Aspects of Intellectual Property. These rules have affected economic, social and cultural rights. The economic, social and cultural rights comprise the human rights to work. This adequate living standard consists of food, clothing and shelter, the right to physical and mental health, the right to social security, the right to a healthy environment and the right to education. These three sets of rights are part of the body of human rights law enacted after World War II. Human rights law comprises economical and social rights and civil and political rights. Each of these rights is extensively intertwined with the other such as the right to work, meaning a little if one cannot meet and assemble to speak on the work conditions.
This research looks to discuss the WTO agreements and their impact on the three aspects; economic, social and cultural rights. The discussion will consider the three identified agreements; General Agreement on Tariffs and Trade, General Agreement on Trade in Services and the Agreement on Trade-Related Aspects of Intellectual Property, and focus on both their positive and negative impacts.
The General Agreement on Tariffs and Trade (GATT)
GATT is the multilateral treaty establishing the standard code of conduct for global trade. It provides a mechanism for reducing and stabilizing tariffs and any other trade barriers while holding consultations on matters that relate to trade. GATT has three primary provisions. The first one entails each member having to confer their most favoured nation status to each other, as it is the most fundamental requirement. Every member should be treated equally in terms of imposed tariffs, but it also excludes the special tariffs among members of the British Commonwealth and Customs Union. The tariffs are allowed in case their removal would lead to a severe injury to the domestic producers. The second provision is restrictions on several imports and exports are prohibited. The exceptions here include when the government has a surplus of agricultural products. The country needs to protect its balance of payments due to low foreign exchange reserves and emerging market countries that need to protect the fledgeling industries. The third provision encompasses the developing countries that are joining the Agreement. The developed nations agreed to eliminate the tariffs on imports from the developing nations to boost the latter’s economies. The lower tariffs also posed benefits for the developed countries since GATT increased the middle-class consumers globally, which increased the demand for trade with developed countries.
It is important to note that developing countries would join GATT in huge numbers, but they started feeling though their needs were not being handled sufficiently in the post-war regime. Many countries got caught in between the East-West conflict. Nonetheless, some amendments were made to the initial GATT agreement to allow the developing countries to have particular exemptions or mitigate the obligations for liberalizing trade. Therefore, the GATT focused solely on the negotiation and monitoring of rules for freer trade worked in complete isolation from other global institutions of the postwar order. Many members expressed being proud and satisfied with the multilateral trading order to progress towards rules-based free trade. GATT’s positive attitude was successful since more attention was offered to the broad range of domestic policies. Notably, at the time, GATT was an international organization that would be replaced by the World Trade Organization and remained a multilateral treaty./
Impact of GATT on Economic, Social and Cultural Rights
The WTO enforces GATT as its free trade agreement. Its member states agree on particular obligations that affect the trade in goods and services, protecting investors and intellectual property rights, among other trade related issues. The market mechanisms and liberalized trade bring in an improvement to people’s living standards. Also, free trade and economic freedom are fundamental conditions for political freedom, or instead, they contribute to the rule of law, which is an integral part of human rights. Undoubtedly, it also leads to globalization that facilitates the global exchanges that overcome one country’s limits, or civilization and participation are enhanced in the global community. There is also the potential of economic power being used as sanctions for those that violate human rights, which can be very effective. Benefits such as ease of movement for goods, services and labour, efficient allocation of resources. Transparent and competitive production, better governance all lead to greater growth levels and an assertion of these human rights. Subsequently, free trade promotes stable middle-class growth due to increased employment opportunities and subsequently building their wealth.
However, GATT did pose a threat to human rights in several ways. First, the localized decision-making process and democratic participation were compromised when a multinational organization such as the World Bank and IMF became involved in setting the national economic and social policies. The lack of restrictions on market forces was a threat to economic, social, and cultural rights, including the right to health, specifically when the structural adjustment policies were implemented to decrease public health and education expenditures. Another impact was that the accumulation of power and wealth in international multinational organisations’ hands increased unemployment, poverty, and marginalization of vulnerable communities. According to the report by the U.N. Sub-Commission in the Promotion and Protection of Human Rights in 1997 states that the present economic and financial systems are arranged in a manner that takes out the most from the labour of toiling masses and transferring it to a privileged minority in terms of wealth and power. Some commentators have indicated that the pursuit of profit, especially in developed countries and the huge investors, has impeded the promotion and protection of human rights.
While GATT promoted globalization by integrating the member states, decreased trade barriers, reduced transport and communication expenses, and improved capital knowledge, technology culture, and people, more significant challenges if state capacity in terms of complying with human rights obligations were formulated. The affected human rights fall under the economic, social and cultural rights as they include the trade union freedoms, the right to work and social security. It also disproportionately affected the minority groups. Global cooperation, especially from non-state actors, is required when dealing with the evident concentration of wealth from multinational corporations, which are higher than the wealth of many developing nations. The economic restructuring, deregulation, and privatization will have particularly disadvantaged groups finding it hard to empower themselves or exercise their social and cultural rights economically. Some countries will be compelled to ease the labour standards, alter the tax regulations and relax some standards to attract foreign investments. While the investors may create employment opportunities, the lack of substantial regulatory workers will have these people working in poor working conditions. The labour unions created in these situations have stated that the Export Production Zones, which the investors exploit, are designed to undermine the union rights. The rights to free association, expression and assembly are denied or restricted, which is primarily the pursuit of profit at the detriment of upholding the rights of its workers.
General Agreement on Trade in Services (GATS)
GATS was enacted in January 1995 to offer the trade on services of similar stability as the one arising from mutually agreed regulations, binding market access and non-discriminatory commitments that GATT had availed for good trade over the past five decades before the implementation. Notably, the liberalization of services trade is distinct from the trade in goods due to the former’s salient traits, including
the need to move production factors, specifically capital and labour, and the significantly developed regulatory frameworks set up in numerous service industries. GATS is a framework agreement that comprises several essential principles outlined in GATT. These include the national treatment, most-favoured-nation (MFN) treatment, transparency in domestic regulation, and fairly applying the laws. GATS will cover all services except those supplied by governmental authorities and services related to the air transport sector, traffic rights, and other rights.
GATS comprises three primary elements: a framework that lays out the general obligations for services trade in a similar manner as GATT does for trade in goods, several annexes responding to some distinctive characteristics of individual service sectors, and scheduling of liberalization commitments undertaken by WTO members. GATS will follow a “bottom-up” approach to globalization, allowing the WTO members to choose the sectors, supply modes, and regulatory conditions where the market-opening commitments are created. GATS has extensive flexibility and emphasizes the progressive character of liberalizations which explains why it is typically considered the most development-friendly of all agreements under the Uruguay Agreements.
Impact of GATS on Economic, Social and Cultural Rights
Trade liberalization propagated through the GATS framework in numerous service sectors has been fundamental to the enjoyment of human rights; specifically, the commitment to health, education, or environmental sectors does impact the enjoyment of the rights to health, education, and development. Also, the commitment to liberalizing other sectors, including tourism, telecommunications, advertising, and prison services, affects human rights enjoyment. For instance, the privatization of correctional services and its relation to administering justice has been a study point under the Sub-Commission.
Generally, GATS has worked to provide an efficient supply of services in different sectors, promoting economic growth and development that subsequently provides the economic means to promote human rights. When an individual can move through different countries to trade their services or even within their countries, the individuals get the capacity to enjoy their rights to food, adequate housing, shelter, social security, become part of the cultural life, water, and sanitation, among others. Services liberalization has promoted economic performance providing a strategy for nations to capitalize on their competitive strengths, have lower prices for consumers in accessing services such as telecommunication, promoting faster innovation, and encouraging a faster transfer of technology. Cultural rights are connected to an individual having the right to participate and enjoy the benefits of culture and science, including pursuing knowledge, understanding, and human creativity. The rights are fundamental in achieving social harmony and have close relations to the rights to education, freedom of thought, conscience and religion. It is important to note that exercising cultural rights should not justify discriminatory practices against particular groups or the violation of other human rights.
Notably, the adverse effects of GATS, especially on the economic, social and cultural rights, can be understood through the four modes of services outlined by the framework. In mode one related to the cross border supply, the supply of health in telemedicine and educational services, primarily through the internet, provides a fundamental means to promote access to education and health care. Specifically, the communities and regions with low health and education infrastructure benefit from the cross-border supply. However, access to the services requires infrastructure in place. If it is not in place, the affected individual or community fails to benefit from the cross-border supply services. The lack of proper government policies to facilitate internet infrastructure, among other requirements for the needy individuals, only exacerbated the existing inequalities between the wealthy and disadvantaged persons. The poor people will not enjoy the availability and accessibility of the services, meaning they cannot enjoy their economic, social and cultural rights. GATS fails to provide a framework that will ensure the developing nations set up this infrastructure. Their people fail to enjoy the cross-border supply of services to affect their human rights
subsequently.
Mode 2 is concerned with consumers travelling abroad to get services. This could be a means to implement global cooperation, and income from the international service users could be utilized to improve local health and education structures for the disadvantaged community. The trade-in services due to the consumption of goods abroad could bring in dual market structures and increase the inequalities if there is no implementation of proper government regulations and the cross-subsidization policies. Considering the human rights perspective, concerns of discrimination, the accessibility of quality health care, and acceptability and adaptability of education services. For instance, while GATS allows a framework that ensures the implementation of an education framework focused on meeting the needs of the paying international students, the non-paying local students and locals end up suffering or even will lack places in particular courses. Also, when health systems focus on availing expensive elective treatment for wealthy foreigners, which is done to provide poorer segments of the local society. Therefore, these structures only succeed at the detriment of local people enjoying their economic, social and cultural rights.
In the third mode of the commercial-presence mode, the increased presence of foreign private suppliers of essential services can pose problems to governments who are supposed to guarantee human rights. The introduction of user fees and privatization will reduce and cut off service supply for poor, marginalized communities and create the two-tiered service supply in the corporate segment focusing on the healthy and wealthy communities. Also, it leads to a brain drain such that the better-trained medical practitioners and educators will be drawn towards the private sector that gives them higher dues and better infrastructure. Privatization has been noted to lead to an increasingly large and powerful sector threatening the government’s role as the primary duty bearer for human rights. The private sector will also subvert health systems via political pressure and regulatory capture, which mainly works with regulators to favour them.
Generally, the human rights law has not placed obligations in countries to be the only essential services provider. However, the countries must ensure that the essential services are available, accessible, acceptable, adaptable, or quality. This will include the supply of services to the poor, vulnerable and marginalized communities. To achieve this, constant monitoring of policies is required with targeted action on behalf of the independent regulators. Notably, the liberalization of services, primarily through the GATS framework, increases these services’ prices, threatening their provision to the marginalized community and subsequently affecting how these individuals enjoy their economic, social, and cultural rights.
The Agreement on Trade-Related Aspects of Intellectual Property (TRIPS)
The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) was founded upon the extended tradition in intellectual property rights protection in Western market economies’ state and international laws. Before its enforcement, a broad array of global IP treaties existed. The detriments in the global IP system, specifically concerning protection, implementation and enforcement, led the GATT contracting parties to place regulatory leadership in the WTO concerning the trade-related aspects of intellectual property protection. The TRIPs Agreement has five unique features. First. It outlines the regulatory standards that members need to positively integrate. The second feature in the progressive liberalization concept that is to be attained in multiple intervals of trade negotiations is not applicable. The third feature is that the Agreement reflects the highly abstract nature of intellectual property rights. Intellectual property exists concerning certain traded products in commerce to integrate positively and information embedded in the products. Its fourth feature is that it is handed the privates rights accorded to economic operators. At the same time, GATT and other agreements handle traders’ rights indirectly since they only give states rights. The final feature is that it has fully incorporated many rules that are inherent in other global agreements.
Impact of TRIPs Agreement on Economic, Social and Cultural Rights
The TRIPs Agreement has provided potential ways in upholding human rights through its implementation. Article 7 of the Agreement has outlined its objectives: the protection and enforcement of the IP rights to contribute to the advancement of technological innovation, transfer, and dissemination. This is done for the mutual benefit of producers and the users of technological knowledge in a way that is conducive to upholding social welfare, economic welfare and attaining the balance between the rights and duties of the technological producers, holders, and users. This balance is attained in several ways, such as its members implementing measures to protect the concerns relevant to the economic, social, and cultural rights, specifically healthcare, nutrition, and the environment. The TRIPs Agreement ensuring that the anticompetitive rights or any abuse of IP rights are eliminated will ensure that all involved stakeholders are treated equally and follow due process. Equal treatment means that everyone gets to enjoy the benefits of scientific progress, which subsequently promote public health, nutrition, environmental protection, socio-economic development, among other human rights. The main concern is constantly ensuring that a balance is achieved while adopting the human rights approach that seeks to uphold them.
Notably, various commentators have indicated that the TRIPs Agreement’s objective has not primarily been to protect IP rights following the human rights approach but instead, it strengthens the global system of unhindered trade. The Agreement’s origin is traced back to the United States’ conviction in need for a multilateral framework of principles, regulations, and fields that deal with global trade and fake items. The Agreement’s opening remarks emphasized one of its primary objectives that are decreasing the distortions and hindrances to global trade. However, deep-seated notions in free trade demonstrate that the Agreement cannot be seen to uphold the human rights approach by considering its content and decision. For instance, the general drive of the Agreement is promoting innovation by providing commercial incentives, the several links between the respective human rights that are public health, nutrition, environment and even development have been expressed as exceptions to the rules instead of individuals being guiding tenets and essential subjects of the Agreement’s provisions. Generally, a human rights approach will lay down the promotion and protection of human rights, specifically the economic, social, and cultural rights, as an integral part of protecting intellectual property rights. In this case, they are allowed exceptions that have been subdued in comparison to the Agreement. This means that the stakeholders will not give these rights the importance they deserve to uphold intellectual property rights.
Furthermore, the Agreement explicitly lays out its content in IP rights comprehensively, yet is it notoriously vague in providing the guidelines on the duties of the IP right holders. The Agreement fails to provide a proper framework for preventing the abuse of rights, measures against anti-competitive practices, or promoting technology transfer. If the Agreement followed the human rights approach, then minimum requirements on how these rights are to be upheld would have been provided similarly to how it provides the requirements to protect copyrights, patents, or trademarks. Furthermore, within the patent protection realm, the Agreement has taken away the autonomy degree. The members enjoy the right to development and decide on their development strategies in line with their development level to guarantee a substantial protection level of human rights. Prior to enacting the Agreement, countries were allowed to make decisions on the technological forms that they could patent and the level of patent protection they could give as per the development needs in these fields, such as the pharmaceuticals would be excluded from the protection. However, as per Article 27(1) of the Agreement, patents are now to be availed for any inventions-both products and processes- in all technological fields, the TRIPS Agreement has protected intellectual property rights in many ways conflict with the accepted international human rights.
The TRIPs Agreement fails to provide any guidelines on protecting cultural heritage and technology belonging to local communities and indigenous persons. First, the Agreement on modern technology and not other technological forms portrays an imbalance within it that affects the affected population in terms of exercising their cultural rights. There is also tension between IP protection and protecting knowledge of the local and indigenous persons. Specifically, the issues come from the use of the latter knowledge by persons not belonging to the owning community without these owners or holders’ consent. Also, concerns about equitable compensation for using the identified knowledge, mainly when used, have led to new patents on new knowledge.
It has also been noted that the protection offered by the Agreement emphasizes the protection forms that have been developed in industrialized countries. For instance, considering the patents. The protection provided by the Agreement mainly applies in protecting the modern technology forms such as biotechnology and are relevant to the innovators located in mainly industrialized nations. IP protection can also be costly due to the initial application costs and the need to maintain, monitor, and defend them in unauthorised use cases. The Bulletin of the World Health Organization noted that numerous countries did not have the technological infrastructure 6to provide the benefits from the expensive IP systems focused on promoting modern technological research. Therefore, the systems are out of reach for many innovators or potential ones in less developed countries. These constraints make it difficult for the developers, holders, and users in the less developed nations to enjoy their economic, social, and cultural rights that should have been provided through the TRIPs Agreement.
Conclusion
The discussed WTO Agreements; General Agreement on Tariffs and Trade (GATT), General Agreement on Trade in Services (GATS) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) demonstrate their positive and negative effects on economic, social and cultural rights. The lack of clarifications and some loopholes allow some vulnerable populations not to exercise their rightfully awarded rights. It is prudent that these uncertainties within the Agreements are handled to ensure these human rights can be fully upheld.

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