Consumer Policy (World Trade Organization)

In its original constellation as the General Agreement on Tariffs and Trade (GATT), the system for regulating world trade had little if any impact on the consumers of its own member states. The main objective of GATT was simply the reduction of protective trade tariffs. Although GATT may have impacted on the pricing of “foreign” products and services bought by consumers beyond their own domestic markets, the system it sustained did not require alterations in domestic product and product process regulation. Accordingly, consumer goods and services were fashioned by national regulation and thus remained identifiable “national” goods from distinct “national” producers. From the 1970s onward, however, intensification of domestic economic regulation, especially in the fields of health and safety and consumer and environmental protection, led to a shift of emphasis to nontariff barriers to free trade.

From the 1980s onward, the political-economic consensus within the developed world that national regulation was now damaging to economic development intensified pressure on the old regime. Accordingly, in 1994, the World Trade Organization (WTO) was established with a distinct aim, not simply to enable world trade, but to enable “free” world trade. The most important reforms introduced by the WTO included overhaul of procedures of dispute settlement and the conclusion of special agreements concerning nontariff barriers to free trade, such as the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS), the Agreement on Technical Barriers to Trade (TBT), as well as trade rounds dealing with provision of services. These agreements aim to balance the global economic objective of free trade with the domestic regulatory concerns of WTO members by laying down the forms of regulation of domestic products that are acceptable within the world trade regime.

An enlightening parallel that might be drawn is thus between the WTO regime and the integrated European market within the European Union, and, in particular, with Articles 34 and 36 of the Treaty on the Functioning of the European Union (TFEU). Just as Article 34 of the TFEU sought to open up a European market to free trade, the WTO order would likewise open up a world order to trade. Equally, however, just as Article 36 of the TFEU balanced the free trade aim against the “necessary” regulatory measures taken by EU member states in pursuit of consumer, environmental, and health and safety protection, the SPS and TBT agreements would give effect to the same balance at international level. By the same token, the WTO order would thus likewise intervene into national orders, reproducing a European constellation by directly testing national regulation for its appropriateness within a global free trade order. It would thus begin to change the product and product process regulation maintained at national levels, impacting the characteristics of the particular good that consumers might buy, and—ultimately—would also shape the nature and perceptions of the global consumer.

Here, however, all parallels with the European experience end. WTO members did not confer “positive” regulatory powers on the organization, although they did agree that WTO law should restrain the exercise of domestic regulatory powers. The WTO itself does not have its own government or executive branch. Accordingly, neither does it have re-regulatory competences comparable with those found within the EU, which allow that organization to harmonize the consumer protection laws of its own member states. As a result, the process of the reshaping of product and product process regulation has been at the global level, and thus the process of the creation of a distinct global consumer has not been a matter for political discussion. Instead, it has primarily been for the panels of the WTO—the individual judicial bodies who decide in international trade disputes—as well as for the Appellate Body of the WTO to decide which measures of national protective regulation are compatible or not compatible with the WTO system. In this endeavor, panels and the Appellate Body have [Page 294]also drawn heavily on the work of nongovernmental international bodies and governmental actors who engage in quasi-legal norm-production at the international level, especially so in the field of product safety; bodies such as the Food and Agricultural Organization (of the UN), the Codex Alimentarius (a standardization body set up to govern international food production standards), the Organisation for Economic Co-operation and Development, and the World Health Organization.

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