Friday, 22 October 2010

Chinese Professor - from Citizens Against Government Waste

This is really impressive! It would be interesting to see a similar commercial on China in trade negotiations. 

Friday, 8 October 2010

Another WTO dispute looming against China?

While foreign companies have long complained against China's indigenous innovation strategy, the USTR has tried to be patient on the issue. However, the wind might be changing with this new article in the Foreign Affairs. 

Monday, 20 September 2010


My article on China's FTA strategy has been translated into Indonesian. Interested readers can find the Indonesian version here.  

Friday, 17 September 2010

How difficult is it to get Visa into China?

The USTR has just announced two cases filed against China in the WTO. One of them concerns the long-standing dispute between Visa and Union Pay. Another interesting case to watch.

Thursday, 19 August 2010

Chinese version of the USTR established

The MOFCOM has established a new post: China International Trade Representative, which will be responsible for conducting bilateral and multilateral trade negotiations. The rank of the post is at full ministerial level, and will be held by a Vice Minister of MOFCOM. The current Representative is Vice Minister Gao Hucheng.

中央批准设立国际贸易谈判代表 明确为正部长级

2010年08月16日16:31   来源:中国共产党新闻网

  中国共产党新闻网北京8月16日电(记者 董宇) 今日,记者从商务部网站上获悉,经中央批准,商务部设立国际贸易谈判代表(正部长级,兼任商务部副部长)1名、副部长级国际贸易谈判副代表2名(其中1名由商务部副部长兼任)。日前,国务院任命高虎城为商务部国际贸易谈判代表(正部长级),钟山兼任商务部国际贸易谈判副代表,崇泉为商务部国际贸易谈判副代表(副部长级)。

  根据中央机构编制委员会办公室的有关批复,国际贸易谈判代表(“China International Trade Representative”)主要职责是:根据国务院授权,负责对外经济贸易领域的重大多、双边谈判工作,协调国内谈判立场并签署有关文件。国际贸易谈判副代表协助国际贸易谈判代表工作。



Wednesday, 28 July 2010

Minister Chen in FT

Minister Chen Deming of MOFCOM recently published an op-ed piece in the FT. This is apparently in response to the earlier criticisms against China's indigenous innovation policies (which has been changed) and its offer in the GPA accession negotiation, which has been perceived as insufficient. 


2010-07-28 15:21 文章来源:商务部新闻办公室
文章类型:原创 内容分类:新闻

  近日,商务部部长陈德铭在英国《金融时报》上发表署名文章《繁荣的中国将更加开放》(英文标题为"Thriving China is ever more open for business"),全文如下:

Thriving China is ever more open for business

  For the last year, China has expanded domestic demand and worked to attract foreign investment, contributing to the global recovery. However, concerns have recently been floated, not least among foreign businesses, that China is now less welcoming of foreign investment. In fact, China will open wider in the future.

  China has kept its market open throughout the financial crisis. In late 2008, we adopted a Rmb4,000bn stimulus package, along with readjustment programs in sectors such as information communication technology, logistics and equipment manufacturing. Companies have followed strict tender rules to ensure a level playing field for all businesses – Chinese or foreign. In 2009, of 12,439 tenders for procurement of electromechanical products, 55 per cent went to foreign investment enterprises.

  Over the last three decades, foreign direct investment has brought capital, advanced technologies and business know-how to China. We understand that FDI fosters innovation. That is why, in April, we held a public consultation to review the criteria we use to accredit "innovation products". The results emphasized that all foreign enterprises are given equal treatment and that all their products are considered to be "made in China", while the same rules of origin are applied to them as to Chinese products.

  Since joining the World Trade Organization, China has continually lowered the entry threshold for foreign investment. We have revised our catalogue for the guidance of foreign investment industries – the official list of industries in which FDI is encouraged or restricted – four times since 1997. Each time we have provided greater market access. Writers such as Thomas Friedman, author of The World Is Flat, and Robert Shapiro, former US undersecretary of commerce under President Bill Clinton, have spoken highly of our efforts to open up.

  China remains a top destination for investment by multinational companies, particularly in services and outsourcing. In 2009, global FDI dropped by nearly 40 per cent, but investment into China fell by only 2.6 per cent. Reacting to worries in the west, China has also strengthened intellectual property protection with new laws and a "double-track" system of administrative and criminal enforcement.

Crisis-hit multinationals have found new sources of profit growth in China. In 2009, General Motors filed for bankruptcy in the US, but its sales in China grew by 67 per cent. It sold more than 1m vehicles in China in the first five months of this year, meeting half of its 2010 target of 2m ahead of schedule. Siemens will invest €1bn ($1.29bn, £843m) in the next three years, with Volkswagen adding €1.6bn by 2011. In 2010, there were 690,000 registered foreign companies in China, investing more than $1,000bn.

  These companies drive growth abroad through their Chinese operations. They create valuable trade surpluses for neighbouring countries by importing intermediate goods, and create jobs in developed countries by buying capital goods and services.

  Such growth will continue as China expands its internal market. Sales of consumer goods rose in 2009 to Rmb12,530bn, contributing more than half of gross domestic product. This year China's domestic market will grow by Rmb2,000bn ($295bn, £193bn, €229bn), outstripping exports. The US is set to gain in particular. The independent American Chamber of Commerce in China recently published a report arguing that in the next 30 years the US can achieve "three trillion-dollar goals": $1,000bn for annual US exports to China, $1,000bn for revenues of US businesses in China producing goods and services for the Chinese market, and $1,000bn for cumulative Chinese FDI in the US.

  Coming out of crisis, China must now work to upgrade its own industries in areas such as high-end manufacturing and environmental goods and services. To do this, China wants to make better use of the knowledge and expertise of multinationals. German carmaker Daimler's success in forming a joint venture in China to develop next-generation electric vehicles is only one example of how more foreign investment can help.

  The world economy is at a crucial stage of restructuring. As China works with others to push the global recovery, tremendous opportunities will open up for foreign companies. China remains open for business, and the rest of the world can benefit.












In Remembrance of Mr. S. Tiwari, 20 Dec 1945 – 26 Jul 2010

Mr Sivakant Tiwari, a former senior official in the Singapore government, passed away on July 26. He had a long and interesting career, which included drafting the TRIPS Agreement during the Uruguay Round (hammering our details on difficult issues such as compulsory licensing and parallel imports), working on the establishment of diplomatic relations with PRC (trying to find language that is acceptable to both China and Taiwan, a long-time friend of Singapore), negotiating the Singapore-US FTA (again IPR issues became key), working on the Pedra Branca case at the ICJ, and last but certainly not least, working as a Panelist in the China - IPR case. 

More info about Mr. Tiwari, including tributes to Mr. Tiwari by Senior Minister Prof. S. Jayakumar and Prof Tommy Koh, can be found at the website of the Centre for International Law of NUS. 

Friday, 23 July 2010

MOFCOM statement on WTO Honor Day at Shanghai Expo

On the occasion of the "WTO Honor Day" at the Shanghai Expo 2010, MOFCOM issued a statement on "China and WTO: Retrospect and Prospect". Part 3 includes some interesting info on China's participation in the DDA:










The WTO gets lyrical

The WTO has just posted an invitation to take part in the poetry competition "The WTO: A Vision in Verse". I'm not sure how many young poetic minds end up in the WTO Secretariat or trade ministries, but many anti-WTO protesters are certainly masters in creating slogans, poems, posters and live shows. Now it's the time for the aspiring poets at Centre William Rappard to fight back. 

Pro-tradians of all countries, unite!

Friday, 4 June 2010

The WTO Speaks (in Double Speak)

In a keynote speech to the World Input-Output Database Conference in Vienna on 26 May 2010, DDG Alejandro Jara spoke in defense of China. Here are a few punch lines from his interesting speech:

Nowadays, in international trade of manufactures, what you see is no longer what you get: the label "made in ... " can be misleading. Let's take for example the new gadget launched by Apple, the iPad. According to a recent report, the imported cost of a mid-range iPad imported from China into the US is about US$ 290. But the Chinese content is only 5 per cent of the commercial value registered by customs, while most of the electronic content actually comes from South Korea, Japan and the US while batteries are manufactured in Honk Kong, China, by a Japanese company.

Trade in tasks calls for a new measurement of international trade: The Value Added Content, or domestic content of trade. To take one of my examples, if we want to assign to each country of origin the value added imbedded in an iPad imported by the U.S. we must be able to measure how much comes from China, Japan or Korea, and, of course, from the US.


To illustrate the usefulness of the new global statistics that can be derived from interconnecting national productive and financial accounts, let me mention one of the most heated debated issues among economists nowadays: the rebalancing of the global economy.

The large imbalances accumulated during the 2000s are often blamed for the 2008-2009 crisis. And most analysts highlight the large bilateral imbalance between the existing super-power, the US, and the new world manufacturer, China.

But relying on conventional trade statistics gives a distorted picture of trade imbalances between countries. As we saw when looking at the Chinese content of the iPad, what counts is not the imbalances as measured by gross values of exports and imports, but how much valued added is embedded in these flows. The WTO estimate, based on IDE-Jetro data, estimates that 80 per cent of the value of the goods exported by the US had a domestic content. The comparable figure was 77 per cent in the case of Japan, 56 per cent for Korea. It was about 50 per cent for Malaysia and Chinese Taipei, meaning that half the value exported by these countries originated from other countries.

Using conventional trade statistics would overestimate the US bilateral deficit vis-à-vis China by around 30 per cent as compared to measuring in value added content based on input-out matrices. The official figures for the bilateral deficit would be cut by 50 per cent when the activity of export processing zones in China and Hong Kong, China, re-exports are fully taken into account. By the same token, measured in domestic value added content, the bilateral deficit of the US with Korea or Japan, the main providers of electronic parts in our iPad example, would increase in proportion to the reduction of the US — China deficit.
This implies also that traditional exchange rate policies won't fully help in rebalancing apparent bilateral imbalances. If the Chinese value added in US imports from China is just half its commercial value, a revaluation of the Chinese Yuan will increase the costs of Chinese goods by only half the rate of the revaluation. In the case of consumer electronics, the impact will be even less than that, and only 20 per cent of the variation in the exchange rate will pass through the price paid by importers.

This shows that, as DG Pascal Lamy said recently at the Paris School of Economics, it is time to start measuring trade in value added rather than on gross value as is the case today!

I guess DDG Jara must be holding a copy of the joint US-China Report on Statistical Discrepancy during the speech. At the same time, in its TPR Report issued on Monday, the Secretariat criticized China for its export restrictions on raw materials, an extremely rare move as the Secretariat has in general avoided commenting on on-going DS cases before the WTO.  

Which one is the true voice of the WTO?

Sunday, 30 May 2010

New article in the JWT on the Chinese Section 301

The abstract is provided below. Interested readers can find the article at

Henry Gao, 'Taking Justice into Your Own Hand: The TBI Mechanism in China' (2010) 44 Journal of World Trade pp. 633–659

To protect the trade interests of their firms in foreign markets, several countries have established various institutional arrangements. For example, the United States has the section 301 procedure, while the EU has the Trade Barrier Regulation (TBR). Learning from their experiences, China also established its own Foreign Trade Barrier Investigation (TBI) mechanism in 2002. This article starts with a discussion on the background for its establishment as well as the substantive and procedural requirements for investigations under TBI. In the next part, the article discusses how TBI has worked in practice by reviewing the Japan – Quantitative Restrictions on Laver case (hereinafter 'Japan–Laver case'), the only case that has ever been brought under the mechanism. Drawing from the lessons learnt from the Japan–Laver case, the article then offers suggestions on how the TBI might be improved in the future. The article concludes with observations on the possible implications of the TBI on China's trade partners and the multilateral trading system as a whole.

Official Launch of the WTO Chairs Program in Geneva

I was in Geneva last week for the launch of the WTO Chairs Program at the WTO Secretariat. Among the 14 institutions selected, three are from Asia countries, i.e., China, Indonesia and Viet Nam. Below is the speech by Lamy at the opening ceremony.

Lamy congratulates the 14 institutions selected for the WTO Chairs Programme

At the formal launch of the WTO Chairs Programme for developing countries, held at the WTO on 25 May 2010, Director-General Pascal Lamy welcomed the chairholders from 14 universities from around the world selected to participate in the first phase of the programme. "The award of a Chair is an acknowledgement of the competence of the selected institutions and the dedication of its scholars," said Mr Lamy, as he wished them every success in developing their partnership with the WTO. This is what he said:

Good morning. I would like to extend a warm welcome to all of you on the occasion of this formal launch of the WTO Chairs Programme. I should particularly like to welcome those of you from out of town, both the Chairholders from 14 universities around the world, and those members of the Advisory Board who were able to find the time to come to Geneva. It is also good to see some of the Geneva trade community here in support of their national WTO Chairholders.

As many of you know, the WTO Secretariat has been entrusted by the WTO membership to cooperate with governments in developing countries to enhance knowledge and understanding of the multilateral trading system and to facilitate more effective participation in its work. This is the raison d'être of our technical cooperation programme. Our efforts in this area have expanded considerably since the beginning of the Doha Round in 2001. We take this mandate very seriously and we are always on the lookout for ways of improving our game. We care about this because we believe that trade is an essential accompaniment of growth and development, and in order to benefit fully from the opportunities offered by trade, countries must be expert in identifying their trade interests, articulating them, and negotiating with trading partners for mutually beneficial outcomes.

For some time now, starting with our regional trade policy courses with which some of you may be familiar, we have sought partnerships with academic communities in developing countries. Since our mandate is to support governments, one might ask why, then, do we seek to work with universities? The answer is simple. We believe that the scholarly community is a source of valuable knowledge in any country. It brings to the table insights, understanding and a legitimacy that outside specialists can only partly hope to offer.

The WTO Chairs Programme, then, is an important plank of the Secretariat's strategy for academic support on capacity building, as reflected in our Technical Assistance and Training Plan. We believe in the particular contribution of national universities and research centres to the discussion and analysis of issues of public interest, including trade policy. Most governments around the world rely on those contributions and analytical capacities to formulate sound policies.

I should like to congratulate the 14 institutions that have been selected in this first phase of the programme. The award of a Chair is an acknowledgment of the competence of the selected institutions and the dedication of its scholars. It is also an encouragement to your researchers and students to take an interest in multilateral trade matters, a cornerstone of international global governance.

As you well know, trade issues by nature require a framework that takes a holistic view of the world economy. This is not only because of inter-linkages among the various sectors in any economy, but also because of the relationships between sectors in one economy and the economies of the rest of the world. Through your analytical contribution, you can help explain the workings, benefits and challenges of the trading system. Academics can help citizens understand and cope with the complexities of international business and globalization. They can also foster greater awareness and informed debate on international trade issues.

The ultimate objective of the WTO Chairs Programme is to strengthen the human and institutional capacities of universities from developing countries to support governments in the formulation of sound trade policies. The programme also seeks, through the Chairs, to support and facilitate the involvement in the process of other relevant stakeholders, such as the private sector, non-state actors and civil society. Policies that are understood and supported by the public at large are far more likely to succeed than those that are simply imposed, whether by internal or external decision-makers.

Each one of the universities selected for the programme has put forward its own work plan, specifying the intended output. I understand that you will be discussing these projects amongst yourselves over the next couple of days. The projects generally comprise a mixture of elements — increased course offerings on trade, policy-relevant research, and outreach activities aimed at raising awareness of trade-related policy issues. These are your proposals, and your projects. You own them. We are here to help, not to lead.

It is in this spirit that we have designated counterparts from the Secretariat to work with the Chairholders. It is for you, the Chairholders, to indicate what you need from us. As I have said, we stand ready to help in whatever way we can, obviously bearing in mind our own resource constraints.

We look forward to seeing progress. I believe that the first two years of the programme are crucial in terms of demonstrating to the WTO membership, and in particular the contributors to the Global Trust Fund, that this is a good way to use their resources. Some concrete output early on in the programme will serve to demonstrate the relevance of this approach, and that will be essential if we are to continue with, and expand, the programme.

Let me, finally, thank the Secretariat staff for their hard work on this programme, which was efficiently steered by Deputy Directors-General Valentine Rugwabiza and Alejandro Jara.

I wish you every success in your endeavours. Thank you for your attention.

Wednesday, 31 March 2010

Minsiter Chen spoke again on currency & protectionism

The emphases are added by me. 


2010-03-30 15:53 文章来源:商务部新闻办公室
文章类型:原创 内容分类:新闻

































HK's first FTA

HK has just signed its first FTA with a foreign country, the Hong Kong - New Zealand Closer Economic Partnership Agreement. More to come?

Saturday, 20 March 2010

China Fights Back on Trade Imbalances and Currency Issue

 This time it is indirect warning only, but a lot of interesting info is revealed at the press conference.



2010-03-19 14:19  文章来源:商务部新闻办公室

文章类型:原创  内容分类:新闻



































































































































Wednesday, 10 March 2010

How to get rid of a trade deficit/surplus?

The answer is simple: bring in a new set of bean-counters (sometimes from a different country). This is essentially what the MOFCOM of China and DOC of US did in their new "Report on the Statistical Discrepancy of Merchandise Trade Between the United States and China", which was issued on March 4th (English version here; Chinese version here). After accounting for the differences created by transshipment through HK and other intermediaries, mark-ups, and customs valuation, the discrepancy in the statistics have shrunken from a whopping 84.3 billion USD to a (still large but not so extreme) 24.2 billion USD. 

While this report adds nothing new to the intellectual debate as it has largely confirmed the works by KC Fung and Larry Lau (see this and this) on the topic, this is probably the first time that the US government openly admits that part of the growing deficit with China might simply be statistical rather than substantive.

Now the question is: Does this mean that the US government will soften its stand on the currency issue?

Thursday, 4 March 2010

2010 Annual Meeting of the American Society of International Law: China and East Asia on the World Stage

On March 27th, I will speak at the 2010 Annual Meeting of the American Society of International Law in the Panel on "China and East Asia on the World Stage". My paper is "From Rule Takers, Shakers to Makers: How Japan, China and Korea Shaped New Norms in International Economic Law", which I will present together with my co-author Prof. Saadia Pekkanen, Job & Gertrud Tamaki Professor at the University of Washington. Below is the Introduction part to the paper. 

While the rise of Asia in the international economy has been widely noted, much less appreciated is the way in which that rise has interacted with the forces of international economic law (IEL). Perhaps the most dominant perception among both legal scholars and social scientists is still that formal law does not play much of a role in the East Asian region – that its institutions are weak, that it has a preference for non-legalistic methods and non-binding commitments which also extend to dispute settlement mechanisms, and that in contrast to highly legal systems as, for example in Europe, far more weight should be given to the competition of national economies and ethnic groups in growing markets than legal dimensions in the case of Asia even today.

This very conceptualization that goes within and across Asian countries has also been extended to their behavior at the multilateral and international levels. Yet even those holding to the contrast between high levels of legalization in Europe and North America and low ones in the case of Asia in the early 2000s had also begun to note the increasing role of formal law in Asia.  This shift towards legalism has been most prominent at the global multilateral level as a number of works have stressed the importance of law and legal processes by and for Asian countries in contexts such as the World Trade Organization (WTO) as well as through burgeoning Free Trade Agreements (FTAs) and Bilateral Investment Treaties (BITs). In this paper we go further and take the first systematic steps towards a comparison of the activities of the dominant players in contemporary Asia, namely China, Japan, and Korea (CJK) with the goal of bringing them into mainstream debates and controversies in IEL.

 Using an interdisciplinary approach combining political economy approaches with legal scholarship, we aim to show how legalization has become a force to contend within Asia. By legalization we mean specifically that, in significant contrast to the past, Asian countries have begun to stress the dimensions of precision (unambiguous rules to require, authorize, or proscribe action), obligation (rules or commitments to bind action), and delegation (third parties to implement, interpret, and apply the rules for disputes or further rule-making) in a wide range of their economic relations. To be clear, we are not stressing that by doing so they are moving toward legal integration, where like the European and Andean cases, formal or informal moves help create a seamless rule of law affecting domestic actors and international tribunals. Rather, driven by their activities at the global, multilateral and now increasingly regional levels, the moves toward legalization should be seen as an evolutionary move toward the creation of the rule of law across borders. Thus as Asian states have begun to stress the dimensions of precision, obligation, and delegation in their economic relationships at present, the sum total of their moves may well go on to have significant implications for the creation of such rule of law systems in the future particularly in their foreign economic diplomacy.

Put simply, then, our main contention in this paper is that Asian states are no longer merely passive rule-takers in a system of IEL still widely thought to be dominated by Western countries, principally the United States and European Communities. Rather, as their economic clout has risen at both the global and regional level, key Asia states such as CJK have become aggressive users of the dispute settlement system of the WTO with novel directions in their domestic institutional landscapes; and they have also moved well beyond the narrow confines of the WTO-centered system to shape even regional and cross-regional legal frameworks to their advantage. How and why did things come to this? What exactly are the legal consequences both for IEL and these countries' domestic legal systems? What does the sum total of these sequential changes portend for the rule of law in CJK and other Asian countries more broadly?

The remainder of the paper is in three parts. The first part provides an analytical framework that stresses the rise and significance of commercial interests operating across borders, irrespective of whether the source
is public or private in nature. Thus we are less concerned with whether a government or a business is responsible for economic flows across borders than with the fact that those flows are taking place. It also provides a brief statistical background, placing Asia's economic weight in global and regional context. Although we look at East Asia more broadly in the paper, we focus on the relative weight of dominant regional players, namely CJK which also go on to form the bulk of the analysis in this paper. The second part turns to the empirical evidence, focusing on substantial changes at both the international and domestic levels over the past twenty years that deserve close attention. At the international level, in breaking with their own tradition of being reluctant litigants, CJK along with other East Asian states have started to "shake" the existing power structure by actively using the existing legal rules to advance and defend their own interests in a policy shift to "aggressive legalism." This ongoing policy shift is one of the core elements for fortifying the "rule-based" WTO system, as well as strengthening the trend toward regional interaction on the basis of rules.  But these same states have also moved well beyond the WTO-centered system in the 2000s more visibly, as they have actually started to "make" new norms by proposing new rules at the multilateral level and creating a web of legal agreements at the inter-regional and intra-regional level that aim to reflect their own interests. These instruments span trade, investment, and finance, and are a harbinger of the continued legalization of Asian economic relations. The third part concludes, focusing on the implications of the analytical and empirical evidence for the future of the rule of law in the multilateral and regional system more broadly.

IELPO 2010

I will be teaching at the IELPO program in Barcelona again on March 18 and 19. While the program is only two years old, it has quickly built up its reputation as one of the best programs on trade law and policy world wide. More details about the program can be found here. Interested students shall act quickly as the application deadline is March 31st. 

Tuesday, 2 March 2010

Teaching trade law in ASEAN

At the invitation of the ASEAN Secretariat and the South East Asia Trade Policy Training Network (SEATRANET), I taught a 3-day workshop on trade policy to government officials and other stakeholders from the ASEAN member countries. More info about the workshop can be found here.

Friday, 5 February 2010

Another case by China in the WTO


2010-02-04 16:49 文章来源:商务部新闻办公室
文章类型:原创 内容分类:新闻




Wednesday, 27 January 2010

New Article in the Hong Kong Economic Journal Monthly

I have published a paper on The Economic Crisis, Protectionism and China's New Trade Policy in the Hong Kong Economic Journal Monthly, one of the leading policy journals in Greater China. Below is the capsule summary of the article. Interested readers can get the journal from all major news-stands in HK or the Journal directly. 




Tuesday, 19 January 2010

Interview with Zhou Xiaoyan

Mdm Zhou Xiaoyan, Director General of the Bureau of Fair Trade, was recently featured in an online interview on MOFCOM's website. There are some some interesting info from her interview. The full interview is available here.

1. So far, 79 countries have recognized China's market economy status. Assuming almost all (apparently Russia is not) are WTO Members, this is more than half of the 153 Members of the WTO. This will build up the pressure on other WTO Members to recognize the MES of China.


2. Up to end of 2009, China has initiated 62 ADP investigations, 3 SCV investigation, and 1 safeguard investigations.


Thursday, 14 January 2010

First sermon in the new year from Pastor Lamy

Here are some more interesting thoughts from the "Dalai Lamy", sorry, should be Pascal Lamy. I'm sure some people will get excited if you have the patience to finish this long speech, but the trader lawyer inside me (as many other trade lawyers probably will) has already started asking: "Is that possible? Aren't the WTO DSB supposed to decide cases on the basis of 'covered agreements', which, no matter how desirable it might sound, do not include the UDHR, ICCPR or the ICESCR? Can you really use trade rules to strengthen human rights? Aren't the two regimes supposed to be parallel universes like Pandora and Earth, where human rights is respected on one but not the other?"

On a separate note, I bet 100 THB that, with speeches like this keep flowing during the rest of his DG term, Lamy has a pretty decent chance of getting nominated for the Nobel Peace Prize after his term. 

The full text of the latest "Lamon" is reproduced below, with emphases added by me, and my own comments in italicized font in brackets. 

"Towards Shared Responsibility and Greater Coherence: Human Rights, Trade and Macroeconomic Policy"
Colloquium on Human Rights in the Global Economy, Co-organized by the International Council on Human Rights and Realizing Rights, Geneva, 13 January 2010

The last time we discussed this issue was in the cathedral of Geneva with Desmond Tutu. Putting together the issues of trade and human rights may seem odd. For many, trade is the villain. It is a symbol of mercantilism, capitalism, the tool through which powerful multinational corporations impose their law over human beings, impairing their social, economic and cultural rights. The history of the relationship between trade and human rights is a history of suspicion, and to some extent of deliberate reciprocal ignorance. 

Yet, trade goes hand in hand with human rights. Trade presupposes human interaction, respect and understanding. If conducted with respect, "trade polishes and softens the most barbarous mores", to quote Montesquieu and his theory of "doux commerce".

One too often forgets that human rights and trade rules, including WTO rules, are based on the same values: individual freedom and responsibility, non-discrimination, rule of law, and welfare through peaceful cooperation among individuals. Not only are they based on the same fundamental values; they are also the result of common concerns. Both human rights and global trade rules were considered a key element of the post-World War II order, a rampart against totalitarianism. It is no coincidence that the seeds of the multilateral trading system were planted at the same time as the Universal Declaration on Human Rights was being drafted in the mid-1940s. Both were seen as indispensable to world peace. In spite of these common underpinnings, for decades the interaction between the trade and human rights communities seemed to be governed by distrust.

And yet, human rights and trade are mutually supportive. Human rights are essential to the good functioning of the multilateral trading system, and trade and WTO rules contribute to the realization of human rights.

What role do human rights play in trade? First, civil and political rights are a key ingredient of good governance, which in turn is essential to the proper conduct of trade relations. Freedom of expression, for example, brings transparency, one of the core principles of the world trading system. Secondly, social, economic and cultural rights, often seen as the main victims of globalization and of the opening of markets, are important ingredients for successful trade liberalization. I will come back to this point in a few minutes.

How can trade help promote human rights? I would start by noting that trade measures are the most commonly used instrument in developed countries to put pressure on states violating human rights. (Does this mean that the WTO sanctions such blatant violations of trade rules? Does this mean that trade rules have to be ignored or even breached so that human rights can be restored? Wouldn't this point to inherent conflict rather than complementarity between the two?

But more importantly, trade is a means to an end; and the end is raising the standards and conditions of living of all. The objective of sustainable development features prominently as one of the objectives of the WTO. Trade negotiators chose to include it in the preamble of the WTO Agreement (yes the preamble rather than the main text, which means it is not enforceable). How is this goal achieved? The opening of markets creates efficiency, stimulates growth and helps spur development, thereby contributing to the implementation of the fundamental human rights that are social and economic rights. One could almost claim that trade is human rights in practice! 

The reduction of trade barriers in agriculture, enhanced market access for agricultural products and the gradual decrease in subsidies provided by rich countries to their farmers, for example, all contribute to the same objective: the implementation of the right to food for all.

But let me immediately discard a misconception that is unfortunately too widely spread. The primary vocation of the WTO is to regulate, not to deregulate trade as is often thought. By putting in place rules to regulate trade flows and remove trade distortions, the WTO aims to create a global level playing field, where fairness is the rule and where the rights of individual members are safeguarded.

I would note, in this regard, that the case law of the WTO dispute settlement mechanism acknowledged that international trade law could not be interpreted "in clinical isolation" from international law in general. And, incidentally, how could the WTO &mdash created in 1994 by an international legal instrument — be immune to the rules of the general international law from which it derives its mission and its very existence?

Of course, trade rules are not perfect. They may, in some cases, have unintended consequences on human rights. Some claimed so, for example, with respect to intellectual property rights. I sense, however, a growing awareness among trade experts of the importance of human rights and of the role trade can play in promoting and anchoring such rights. The concerns sparked by certain provisions of the TRIPS [Trade-related Intellectual Property Rights] Agreement led trade negotiators to agree, in 2005, to amend the TRIPS Agreement to facilitate access of developing countries deprived of domestic pharmaceutical production capability to affordable medicines. Similarly, discussions are underway about the possible protection of folklore and traditional knowledge.

But let me go back to the question of trade, development, and human rights. While trade can promote development and contribute to the reinforcement of human rights, it is not a panacea. Trade liberalization can entail social costs. To be successful, the opening of markets requires solid social policies to redistribute wealth or provide safeguards to the men and women whose living conditions have been disrupted by evolving trade rules and trade patterns.

This is what I have called the "Geneva consensus", under which the opening of markets is necessary to our collective well-being, but does not suffice in itself.

It does not suffice unless strong safety nets help correct the imbalances between winners and losers at the national level. It does not suffice unless the countries which do not enjoy sufficient human, technical, and financial resources to build the necessary infrastructure or to put in place such safety nets domestically are assisted by the international community. Hence the importance of the WTO mandate of Aid for Trade.

For trade to act as a positive vector for the reinforcement of human rights, a coordinated international effort is needed. A coherent approach, which integrates trade and human rights policy goals, should be developed. Progress can no longer be achieved by acting in an isolated manner. Coherence should become our guiding principle in fostering development and human rights: coherence between the local and the global, between the world of trade and the world of human rights, between the WTO as an institution and the various organizations active in the field of human rights.

Today's world may be flat, to paraphrase Thomas Friedman, but it is not united. It is, on the contrary, more fragmented than ever. The wind of globalization, which has been blowing during the past few decades, has dispersed our energies. We now need to bring them together and act in a coordinated way.

This responsibility lies with all of us. It is the responsibility of the members of the WTO, which are practically all party to either the International Covenant on Civil and Political Rights or the International Covenant on Economic, Social and Cultural Rights, to uphold their human rights obligations together with the obligations to which they have subscribed within the WTO Agreement. But it is also the responsibility of the WTO, of the Office of the High Commissioner for Human Rights — which is the custodian of human rights treaties — and of organizations such as the International Council on Human Rights and Realizing Rights to work to institutionalize the relations between the trade and human rights communities. It is our responsibility to coordinate our actions in a meaningful and efficient manner to ensure that trade does not impair human rights, but rather strengthens them. I am aware of the challenge this represents, of the change in mindset this requires.

By having invited me to this event today, a first step has been crossed, and I thank you for having taken this initiative. My hope, as Sir Winston Churchill said, is that "this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning."

Thank you for your attention.