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The Review of International Organizations

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01.09.2010

The World Trade Organization at work: Performance in a member-driven milieu

verfasst von: Manfred Elsig

Erschienen in: The Review of International Organizations | Ausgabe 3/2010

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Abstract

This article discusses performance in the context of the World Trade Organization (WTO). Applying the framework by Gutner and Thompson and inspired by principal-agent theory, it is argued that existing studies have underspecified the institutional milieu that affects performance. The WTO represents a member-driven organization where Members are part of the international organization (IO) (e.g., through rule-making) and at the same time act outside the IO (e.g., through implementation). Thus, a narrow reading of the IO (focusing on the civil servants and the Director-General and his staff) will not suffice to understand IO performance in the WTO context. Selected evidence is presented to illustrate aspects of the WTO’s inner-working and the institutional milieu of performance. In addition, the article discusses a number of performance parameters, including the relationship between Secretariat autonomy and performance, the role of information, and the mechanisms of performance aggregation. The article ends by cautioning against quick fixes to the system to improve performance.

Vorheriger Artikel International regulation without international government: Improving IO performance through orchestration

Nächster Artikel The politics of performance evaluation: Independent evaluation at the International Monetary Fund

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These include the 4th protocol on basic telecommunication and 5th protocol on financial services.

Milieu is understood here predominantly within a rationalist perspective.

It is important to stress that trade rounds produced unequal welfare effects across and within countries. In addition, the focus on the cooperation problems has shifted over time from negative integration (e.g., tariff reductions, tackling protectionism in agricultural markets, offsetting unilateralism) to positive integration (e.g., compatible technical regulations, the protection of intellectual property rights, stronger dispute settlement).

There have been many critical studies focusing on welfare transfer from the South to the North resulting from the Uruguay Round, e.g., Finger and Nogués (2002).

Examples include case studies on the negotiations that brought about a public health related opt-out from the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS), e.g., Drezner (2007).

Some recent work on capacity constraints combines process and output measures; see for instance Busch et al. (2008).

For an overview on economic, international relations and legal explanations for the need of a multilateral trade institution, see World Trade Report (World Trade Organization 2007).

Recognizing that their relations (…) should be conducted with a view to raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand (…) and expanding the production and exchange of goods; being desirous of contributing to these objectives by entering into reciprocal and mutually advantageous arrangements directed to the substantial reduction of tariffs and other barriers to trade and to the elimination of discriminatory treatment in international commerce (www.wto.org).

Recognizing further that there is a need (…) to ensure that developing countries, and especially the least developed among them, secure a share in the growth in international trade (…) (www.wto.org).

Many studies also suggest that trade liberalization has occurred mainly in unilateral terms or in the regional context, but less through the WTO (World Bank 2005).

The MFN norm calls for non-discrimination between one’s trading partners. Various MFN exceptions exist, e.g., the enabling clause for a special treatment of developing countries, Art XXIV on regionalism, the long-used practice of providing “waivers” for “temporal” non-compliance, etc.

The national treatment norm stipulates that foreign produced goods cannot be discriminated against once they have entered the country (for example, an excise tax applicable only to imported goods would be illegal).

A key concern for Japan during the Uruguay Round in the area of the dispute settlement system was to tame US unilateralism, Interview with a former Japanese trade negotiator, 21 May 2010.

The WTO has moved towards addressing non-tariff barriers, trade-related concerns (e.g., investment, competition) and non-trade concerns (e.g., human rights, environment, and development).

I focus on formal PARs, where the principals can delegate, control and sanction based on a “contract.”

Between Ministerial Conferences more restricted circles where only a handful of ministers may participate are used in an attempt to unblock negotiations.

In 2009, 20 Members of the WTO lacked direct representation through a Geneva-based ambassador.

Interview with a former ambassador and Chair of the General Council and the DSB, 17 June 2010.

In case of conflict over appointing panelists, the DG holds a special right to force selection.

Re-appointment of a panelist is influenced by external factors (the disputing parties accept the expert) and by internal factors (the panelist is perceived as a team player and is not acting too “autonomously”), see also Shoyer (2003), and Davey (2003).

Other authors attribute a trustee position to the AB (e.g., Alter 2008); see also Grant and Keohane (2005).

As AB members are subject to a re-appointment procedure there exists after 4 years an ex post control tool for Members.

The 1994 Agreement Establishing the WTO (Article VI) reads: 1.There shall be a Secretariat of the WTO (...) headed by a Director-General; 2. The Ministerial Conference shall appoint the Director-General and adopt regulations setting out the powers, duties, conditions of service and term of office of the Director-General; 3. The Director-General shall appoint the members of the staff of the Secretariat and determine their duties and conditions of service in accordance with regulations adopted by the Ministerial Conference; 4. The responsibilities of the Director-General and of the staff of the Secretariat shall be exclusively international in character. In the discharge of their duties, the Director-General and the staff of the Secretariat shall not seek or accept instructions from any government or any other authority external to the WTO (...).

See procedures to appoint the DG, Doc WT/L/509, 20 January 2003, http://docsonline.wto.org/DDFDocuments/t/WT/L/509.doc.

It is not unusual for PPs to try to pressure the DG to appoint specific candidates, interview with a former DG, 8 November 2007.

The focus is on the Secretariat as it is involved in the four areas defined.

On the role of the Secretariat in negotiations, see Elsig (2010).

Yet, the TNC operates under the authority of the General Council (the most important Committee composed of PPs).

While the AB members are selected by the Members, the AB Secretariat is selected by the DG (in consultation with the AB members), e-mail exchange with an AB member, 3 July 2010.

Weiler continues: “Like in Freud’s dream theory certain things just have to come out. The views of the Secretariat as to the proper outcome of a dispute will, thus, come out and more invidiously will be consciously and subconsciously pushed upon the Panel” (2001: 205).

The DG is increasingly involved in the selection process, as parties do not accept proposed panelists.

Members have substantial influence as they take the decision to launch a case and in most cases attempt to find a solution prior to the start of litigation. In addition, for many WTO Members the role of the private sector is pivotal for litigation (see Shaffer 2003).

See Footer (2006) for an overview of different Committees.

Interview with senior WTO official, 31 January 2007.

However, the WTO is only one player among many in providing trade-related technical assistance and capacity building. A growing number of intergovernmental organizations (e.g., South Centre, Commonwealth Secretariat) and non-governmental organizations offer their services to developing countries. In addition, the WTO joins forces and collaborates in capacity building with other organizations. The WTO participates in various inter-agency efforts, including Aid for Trade, the Enhanced Integrated Framework, and Trade Facilitation. The WTO often plays an “orchestrating” role in this area; see Abbott and Snidal (2010).

Interview with senior WTO official, 31 January 2007.

As tasks within the WTO are situated alongside the performance metrics continuum (see Figure 1 in Gutner and Thompson 2010), it is difficult to compare the performance across activities.

Interview with senior WTO official, 29 January 2007.

Notice to the staff on the Evaluation Methodology for Monitoring and Evaluating the Technical Assistance Activities (Office(02)40).

The mandate (terms of reference: TOR) focused on assessing the WTO’s comparative advantage vis-à-vis other agencies, the relevance for participants, the efficiency and management of the overall training and technical assistance, Strategic Review of WTO-provided Training and Technical Assistance (TRTA), WT/COMTD/W/152 and WT/COMTD/W/153.

The suggestion to outsource is not surprising given the interests of the organizations which evaluators represented.

“Evaluations” of these activities quickly turn political and are mainly done by insiders of the system (e.g., negotiations among Members to change decision-making rules, reforming dispute settlement).

The Secretariat is closely watched by the PPs to make sure that it doesn’t engage in simulation exercises on expected effects of regulatory changes on trade flows and national welfare. Simulations are mainly carried out by Members and the results are usually not shared among contracting parties.

There exists a related argument on the effects of increased legalization and de facto greater transparency in the WTO. This in turn empowers import-competing groups and reduces Members’ ambitions to engage in further liberalization through the WTO (Goldstein and Martin 2000).

A recent evaluation that also included an assessment of decision-making processes was mandated by former DG Supachai Panitchpakdi (Sutherland et al. 2004). Yet, PPs did not pay much attention to the report.

A special problem in WTO-sponsored workshops and training activities relates to job fluctuations among participants. A significant number of workshop participants leave government or move within governmental departments following their training. This affects the overall impact of technical assistance related to trade policy.

While it may seem counterintuitive, some AB members feel unease because their decisions cannot easily be overturned by member states due to existing high thresholds for re-interpreting AB recommendations or for creating new rules and obligations following consensual decision-making procedure. This situation places enormous responsibility on their shoulders (see Pollack 2007: 7).

The single undertaking principle means that nothing is agreed until everything is agreed. This approach ties together a diverse set of negotiation issues, excludes early harvest of agreed negotiation outcomes, and makes a final (package) agreement only possible if it is acceptable to all Members.

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Titel: The World Trade Organization at work: Performance in a member-driven milieu
verfasst von: Manfred Elsig
Publikationsdatum: 01.09.2010
Verlag: Springer US
Erschienen in: The Review of International Organizations / Ausgabe 3/2010
Print ISSN: 1559-7431
Elektronische ISSN: 1559-744X
DOI: https://doi.org/10.1007/s11558-010-9093-2

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