JAYATI SRIVASTAVA

A

This article argues that the sources of the WTO’s problems are much deeper than the immediate problem associated with the deadlocked negotiations. It is in fact a crisis of confidence rooted in the fundamental issue of legitimacy. The paper is divided into four sections. Section I attempts to capture the debate on the legitimacy of the intergovernmental organisation.1 Section II discusses specific issues of legitimacy of the WTO and dwells on the reasons for its progressive decline in legitimacy. Section III looks into the attempts made by the WTO to address some of these issues in order to augment its legitimacy while conclusions are summed up in Section IV.

Legitimacy

It is difficult to capture the notion of legitimacy and more so when it is applied to international arena. Viewed from a sociological and psychological perspective, legitimacy can be termed as the “tendency of individuals or groups to accept and follow the rules of a political order” [Hurrell 2005: 15-16] and therefore, the notion of consent is a major component of legitimacy. In a political sense, legitimacy denotes right to govern or recognition of right to govern which simultaneously justifies political power and obedience [Coicaud 2002: 26]. It also includes repre sentation, accountability, transparency, and due process which are central components of democracy.2 Apart from consent, legitimacy in political terms also requires norms and values around which there is a broad consensus. It is “what people accept because of some normative understanding or process of persuasion” where “justification and reason-given are fundamental” [Hurrell 2005: 16] and is often in conformity with law. In this sense, it also has a legal conno tation. However, legality alone would not be a sufficient condition and legitimacy would flow only if such legality/legal actions reflect a broad agreement with the values of the society [Coicaud 2002: 23].

In the international realm, the notions of legitimacy are quite fuzzy. In the realist interpretation of international order, characterised by unequal distribution of power and capabilities among states, legitimacy becomes an instrument to maintain and sustain the order. Accordingly, inter national organisations are not seen to possess either an independent political will or effective political independence apart from the ones assigned to them by the states and hence conceptually not subject to the notions of legitimacy [Heiskanen 2001: 5]. In a rival interpretation, legitimacy within international society is also often seen as co-terminus with or a function of the notions of democracy, accountability, participation and representation. This view transcends the traditional notion that democratic principle is confined to territorially-bound political communities of nation states and is not applicable to the international realm or international organisations which is dominated by concerns of war, peace, survival and security.

In recent years, many scholars have invoked the legitimacy of international organisations from the point of view of democracy. The issue of democratic legiti macy of international organisations transcends the boundaries of nation states and inevitably assumes the possibility of a disconnect between the interests of nation state and the interests of the people re siding therein. Thus, the principle of national interest reflecting homogeneity of the state is contested.

Arguing that the lack of legitimacy of international organisations is rooted in the democratic deficit, this approach underlines three broad reasons for the democratic deficit. One of the main reasons for the democratic deficit of international organisations is that not all states are an equal participant in the decision-making process. The one-country-one-vote principle, even though an egalitarian principle, undermines an important pillar of democracy by giving smaller nations a disproportionate share in the decision-making at the cost of more populous nations within intergovernmental organisations. Another form of democratic deficit flows from the absence of adequate avenues for the participation of the people affected by their policies [Charnovitz 2003]. The principle of consent expressed through the majority rule in modern democracies is therefore clearly absent [Held 1995]. Moreover, since not all member states are democracies, individuals in such countries face double alienation, both at national and international policymaking level.

Besides, an important dimension of legitimacy is the fundamental faith in the pro cess of decision-making wherein equitable, inclusive and meaningful participation or representativeness is crucial. Also crucial is the accountability and transparency in enhancing the legitimacy of the organisation.3

Normatively speaking, policy consensus is an important component of legitimacy which entails a broad acceptance of an organisation’s normative goals amongst its various constituencies [Higgott 1999].

In the case of international organisations, legitimacy also depends partly on their effectiveness defined in terms of their ability to fulfil their mandate. It may be referred to as a functional legitimacy whereby the organisation derives its legitimacy from discharging its functions effectively.

To summarise, legitimacy of an international organisation emanates from a combination of factors encapsulating broad concepts such as democracy, participation, representation, accountability, transparency and in addition, functional efficiency or its capacity to fulfil its mandate. Besides, for any political entity including international organisation, legitimacy is a process which is not static but is in a continuous process of evolution/accumulation (even dissipation), which is difficult to quantify and more often a matter of perception.

In an optimum situation, multiple dimensions of legitimacy put together would enhance the legitimacy of an international organisation. However, for any international organisation, the equilibrium between various dimensions of legitimacy is difficult to achieve, given multiple actors and different agenda and interests amongst member states, non-governmental organisations (NGOs) and other constituencies. In other words, although inter national organisations are conceptually driven by the member states, they are operating in a milieu where actors other than states

– such as NGOs, other IOs, etc – play an important and significant role. This often leads to conflicting demands placed on the international organisation adding to the problem of legitimacy. This aspect has been elaborated in the context of WTO in the next section.

The WTO established in the year 1995 is a multilateral body to negotiate, set, govern and monitor the rules of international trade. The WTO has increasingly come to play legislative and regulatory functions which traditionally were in the domain of the nation state. Its dispute resolution mechanism is considered as an important pillar in advancing the global governance mechanisms as it works as an effective enforcement mechanism binding on all member countries – big or small.

The demands for enhanced democratic participation, accountability and transparency comprise an important set of legitimacy issues that the WTO has to deal with, more particularly since the breakdown of trade talks at the Seattle ministerial meeting in the year 1999. Apart from being non-democratic and opaque, WTO’s pattern of decision-making has come under serious criticism which undermines the legitimacy of the organisation. In principle, all member countries have equal rights in the decision-making structures of the WTO where the decisions are normally taken by consensus. Operationally though, the decision-making by consensus perpetuates the hegemony of the powerful nations largely carried out through the green room process and informal working groups, wherein a small group of the rich and powerful countries – the Quad (US, EU, Japan and Canada) I decide the policies and the weak countries are often coerced into agreeing with their “consensus”. In the formal negotiations also, many deve loping countries do not have either the expertise or the resources (such as maintaining a regular representative in Geneva) to participate at various stages of the decision-making and on complex and technical issues. Such a “club model” [for a full discussion see Keohane and Nye 2002: 219-44] of decision-making of the WTO not to mention the lack of meaningful participation of stakeholders in the decision-making apparatus and limited transparency and accountability perpetuates the democratic deficit, thus undermining the legitimacy of the organisation.

The exclusive mandate and pursuance of trade liberalisation policies, many a times at the cost of or at odds with the other goals of environment, labour, poverty alleviation, public health, etc, adds another dimension to the legitimacy crisis. In fact the greatest challenge to its legiti macy has come from these normative goals articulated through a number of international NGOs who claim that the WTO is indifferent to the impact of free trade on workers’ rights, child labour, the environment and health and that its policies are detrimental to such cherished goals.4

The legitimacy of WTO is also undermined because of the inequitable impact of its policies. Critics argue that the WTO is run by and for the rich and hence,

developed countries continue to be both engines of free trade regime and its prime beneficiaries. As an international organisation, it must not only fulfil its mandate but also do so in a way that benefits large if not all sections of its membership. In fact, no significant policy measures were initiated on developmental aspects till the 2001 Doha round which was uniformally given the title Doha Development Agenda (DDA)5 which was expected to bridge the divide between the rich and the poor nations. However, repeated stalemates on DDA has undermined WTO’s capacities to carry the rich and the poor together, hence undermining its legitimacy.

Often therefore the demand for equity get reinforced when viewed alongside the demands raised by groups who are fundamentally opposed to the process of globalisation and are in favour of overhauling/ replacing the current global economic architecture including the WTO. Such anti-globalisation groups form the bulk of the protestors on the streets at various WTO ministerial conferences and also at the WEF, IMF and World Bank meetings.

In recent years WTO’s functional efficiency in terms of its ability to fulfil its mandate of trade liberalisation has also come under strain causing a functional confidence crisis. Ever since the Seattle conference of 1999, the functional inertia has become quite pronounced. The DDA promised to bring a new vibrancy to the institution but its implementation has hit a roadblock, undermining the legitimacy of the organisation.

Simultaneously, there is a significant move away from multilateralism which has become more pronounced since the success of developing countries at Cancun, which alienated a section of the original members. The US in particular, along with the EU and China is increasingly relying on bilateral and regional route to pursue their trade interests.6

Here, it may be recalled that the WTO was created for the specific purpose of trade liberalisation. Since trade liberalisation does not happen in isolation and has wider socio-economic repercussions, there comes a time when it needs to address the larger issues of equity and justice. If it fails to do so, it suffers from a legitimacy crisis from the have-nots – either the nation states (developing countries) or the public at large.

At the same time, if the WTO tries to incorporate broader issues – the demands

Economic and Political Weekly October 6, 2007

of the have-nots – the consensus breaks down or comes under severe strain due to the intransigence shown by the original “club” members. Nowhere is it more pronounced as in the case of the DDA through which the WTO tried to expand its agenda to include development which has been facing serious resistance from developed countries – the original members of the club of WTO.

Different constituencies may view WTO’s legitimacy differently and hence very often different dimensions of legitimacy clash with each other. For instance, insofar as legitimacy flows from a broad agreement with the values of the society, the WTO-led free trade regime has the support of its member states or the contracting parties. It has expanded to include majority of 149 member countries including China, which agree with the philo sophy and values of trade liberalisation that it professes. Those who are not members are making suitable domestic policy reforms to join, in order to reap the possible benefits of trade liberalisation.

And yet, amongst many other stakeholders including the NGO community, in particular the anti-globalists and also the people adversely affected by the free trade policies, the WTO represents an evil force which needs to be restructured or in extreme case disbanded. Many such groups advocate an alternative route which undermines and challenges the normative goal of trade liberalisation.

Sometimes different constituencies place different demands on the WTO which working at cross purposes undermines the legitimacy of the organisation. For instance, the issue of submission of ‘amicus curiae’7 briefs by the NGOs and opening of DSB proceedings for public viewing/hearing in the interest of transparency and accountability is regarded as an important component of democratic legitimacy by the NGOs [Shelton 1994]. However, procedur ally, the legality of accepting such unsolicited briefs by the DSB is contested by developing countries. The appellate body in particular has been playing a proactive role in setting the rules and procedures for acceptance of amicus curiae briefs from the NGOs but has faced sharp criticism of being unaccountable from the developing countries, thus undermining its legitimacy [for details see Srivastava 2005].

This has been amply demonstrated during the acrimonious debate on the legality of submission of amicus briefs during the EC-asbestos dispute8 where the appellate body not only allowed submissions of amicus curiae briefs but also laid down specific procedures/guidelines to accept amicus curiae briefs from non-parties [for details see Srivastava op cit].

Contrary to the NGO constituency, developing countries strongly disputed the jurisdiction of appellate body to lay down procedures for accepting the amicus curiae briefs and expressed reservations about the Appellate Body overstepping its authority and called for reversing its decisions by invoking the legislative authority of the General Council.9

Subsequently, the appellate body retreated from its stand and rejected all the amicus curiae briefs filed in this case on “procedural” grounds. The dispute thus marked a low point in the legitimacy of the appellate body/DSM among developing counties but enhanced its legitimacy in the eyes of the NGO constituency. Later, when it rejected all the amicus curiae briefs, it resulted in the alienation of the NGO constituency as well. The case thus highlights the problem of striking a balance between various actors and legitimacy of various kinds within the institution itself.

Another aligned yet crucial demand is opening of panel’s proceedings to public/ stakeholders. Here again, India along with other developing countries questions the demand for a more inclusive involvement of NGOs in the WTO negotiations. On the other hand, Greenpeace, along with other international NGOs, believes that the lack of transparency and adequate consultation with all stakeholders must be urgently addressed by the WTO. In September 2005, the WTO for the first time allowed public viewing of the legal process of the WTO via closed-circuit broadcast in a dispute between the EU on the one hand and the US and Canada on the other.10

However, procedurally the public viewing or opening the panel proceedings to public viewing is not a norm and is in fact contingent on the consent of the parties concerned leading to repeated onslaught on procedural opaqueness thus undermining its legitimacy in the eyes of the NGOs’ constituencies which is in complete contrast to the demands of the developing countries which are not very comfortable with opening of the WTO to NGOs. The political skirmish surrounding this issue among various constituencies undermines WTO’s legitimacy to a signi ficant extent.

III WTO’s Search for Legitimacy

The WTO not being immune to legitimacy challenges/critiques has sought to alleviate the problem through certain initiatives primarily aimed at alleviating its democratic deficit by increasing participation of stakeholders.11 This predominantly translates into a very narrow set of initiatives on the role that NGOs can play in the WTO.

The WTO-NGOs interaction is governed by the guidelines devised by the General Council in 1996 which ascertain that the WTO secretariat should play a more active role in its direct contacts with NGOs and serve as a conduit for exchange of ideas between WTO members and the NGOs. The rationale to improve communication with NGOs given by these guidelines is to increase awareness of public about WTO’s activities which is clearly aimed at garnering a wider acceptance of the organisation and enhancing its legitimacy.

The role of NGOs has seen some expansion in the WTO over the years not so much from inside but from outside which means that while NGOs have not been given a formal role in the decisionmaking structures of the WTO, they are increasingly being heard by the WTO members at various forums.

However, the pattern of NGOs participation has perpetuated the democratic deficit and raises serious questions about procedures and principles of inclusions and exclusions. Evidently, there is signi ficant lack of representation of developing countries’ NGOs in the WTO ministerial meetings and also at the other points of contact between the WTO and NGOs. Overall, the NGOs from countries like US, UK, France, Belgium and Canada have dominated the participating NGOs. Participation sought to be maintained through NGOs’ participation in the WTO is conditional on accessibility, where developing countries’ NGOs are clear losers due to lack of resources. Besides, a lot of NGOs participating at the ministerial meetings includes business association and chambers of commerce [Srivastava 2005: 1552-57]. The stakeholders’ model therefore translates into more than adequate representation of vested interest while people who are actually affected by the decisions taken are left unrepresented.

Some other attempts broadly in line with the stakeholder’s framework have also been attempted by the WTO. For instance, in 1993 an informal advisory body was created by then director general, Supachai Panitchpakdi to create a more structured mechanism of ongoing dialogue between the WTO and the civil society.12 Members of the 10-member NGO advisory body were selected on the basis of the activity and role of their organisation.13 The fact that it predominantly consists of the international networked NGOs based in the developed countries did little to augment its legitimacy.

Therefore, even before it started to function, doubts were raised about its representative character and many leading NGOs such as Friends of the Earth International and Oxfam International refused to be part of the advisory body demanding a more inclusive and meaningful role.14 Some regarded it as a step towards cooption of NGOs in order to gain legitimacy for the WTO in the NGO sector. In face of such criticism, the legitimacy of the initiative got undermined.

Despite the dominant stakeholder framework, WTO is also experimenting with newer forms of enhancing participation and through that legitimacy. One initiative which goes beyond the NGO framework was the setting up of a consultative board of eminent persons.15 Headed by ex-director general, Peter Sutherland, its task is to “reflect on how to improve the functioning of the organisation as it expands to near universal membership, the role of the secretariat and its resources, and ways to create more effective partnership with other international originations and greater public outreach”.

Further, in the WTO’s outreach activities, parliamentarians have also been included. The director general participates in a number of meetings with the parliamentarians, and representatives from international parliamentary groups while other staff members of the WTO secretariat participate in meetings and events hosted by NGOs, and academic institutions. The WTO keeps in contact with the inter-parliamentary union and other parliamentary organisations and assemblies in an attempt to inform and involve. The inter-parliamentary meetings even though not formally associated with the WTO are held on the occasion of WTO ministerial conferences. These meetings provide valuable opportunities for parliamentarians to learn more about current trade issues, to get a sense of negotiations, and to network with fellow parliamentarians on trade matters.16

All these efforts are geared towards developing WTO’s outreach activities vis-a-vis civil society and stimulating a dialogue with the people on the future direction of WTO trade agenda and in the process attaining wider legitimacy for itself albeit with limited success.

One important way of enhancing democratic credentials is through increasing transparency which has been done through the WTO web site. The web site initially mainly contained information about the organisation, its activities, trade statistics, etc, but over the years it has grown to encompass all these issues and much more.

In 1996, the document dissemination facility was launched, which by 1999 grew to include 60,000 official documents in the three official languages, including minutes of the meetings, reports of the WTO secretariat, committees and working groups and proposals put forward by the countries during negotiations. Majority of these documents are derestricted immediately and some after six months. In May 2002, the General Council decided to limit this time to 6-12 weeks and also reduced the exceptions. Although non-papers, proposals and negotiating texts still remain inaccessible, the web site along with the dissemination of official documents marks an important step in making WTO a more open and transparent organisation.

In 1998 under the DG’s enhanced plan for cooperation with the NGOs, a special section on the NGO was included on the WTO web site including a chat room for interactive discussion.

However, these attempts have done precious little to augment the legitimacy of the organisation. This is because such kind of consultative process is neither “addressed to the people, nor to the collec tivity of universal citizens, but rather to those that are likely, for professional rather than for ideological or personal reasons, to be interested in the subject or issue covered by the process – in other words, the stakeholders” [Heiskanen op cit: 11-12]. Here “the participation of individuals in transnational governance is not viewed as a matter of universal, formal right, but as a consequence of the individual’s holding of certain context-specific professional interest or concerns...but only to the extent that the process in question may affect these interests or concerns” (ibid: 12). This raises the question whether the stakeholders/ NGOs in question are in a position to speak for the wider community that is affected by the decisions so arrived at various IOs. The democracy so envisioned or operationalised has serious limitations and is certain to under mine the legitimacy of any organisation in the long term if not in the short or medium term.

IV Conclusions

All international organisations in contemporary international order must address the crucial issue of legitimacy in their governance structure which depends on a complex set of democratic, normative and functional criteria.

The legitimacy crisis of the WTO emanates from a complex mix of factors including democratic deficit, functional inertia, iniquitous fallout of its policies and most important of all, ignoring the concerns of environment, labour, poverty, etc. In other words, the norm of trade liberalisation or the principle of consent with the norm is the most challenging part of WTO’s legitimacy, especially in the wider international community. Also challenging is the task of balancing different aspects of legitimacy which WTO has to grapple with on numerous occasions.

The Seattle ministerial conference demonstrated a low point in WTO’s democratic legitimacy amongst developing countries and also the NGOs. While developing countries felt alienated from the decision-making process due to repeated intransigence on market access issues as also attempts to fuse trade and labour issue, the NGOs felt equally let down by WTO’s inability to respond to their concerns of transparency and accountability which contributed significantly to the collapse of the Seattle ministerial conference. As far as NGOs are concerned, the demand of participation and transparency remains largely unresolved.

The Cancun ministerial conference saw the victory for developing countries (although in retrospect, this is debatable), yet it resurrected US and EU’s leanings toward bilateralism and unilateralism which has the potential of undermining the multilateral WTO trade regime.

Overall thus, the WTO is faced with multiple problems which both individually and collectively undermine the legiti macy of the organisation as a whole. On its part, the WTO has attempted to expand the participation of a range of NGOs, academics and stakeholders and in recent years, of parliamentarians in its search for democratic

Economic and Political Weekly October 6, 2007

legitimacy. This has done little to augment its legitimacy because in the absence of clearly laid-out principles of inclusion, a large body of NGOs/stakeholders, especially the ones from developing countries are excluded from this process.

The presence of large number of NGOs/ protestors, etc, on the streets at the ministerial conferences which consists of antiglobalists, reformists, environmentalist, labour unions, further contributes to undermining the legitimacy of the WTO in a significant way. This also indicates that the WTO process of involving NGOs is not an inclusive one. The problem of representation therefore remains unsolved and thus, in order to enhance its legitimacy, the WTO needs to move beyond its NGOs outreach activities.

The problem of democratic legitimacy is in fact rooted in the stakeholder’s model that the WTO has adopted. Also, following the dominant discourse, WTO has been able to address a very limited aspect of democratic legitimacy – participation and transparency. Within such a framework, the prospects of an enhanced democratic legitimacy of the WTO look bleak. It is erroneous to assume that interactions and consultative process with certain groups or select group of individuals brings the organisation closer to the “people”. One cannot talk or visualise democracy in a cul-de-sac or enclave mode. WTO needs to create open spaces and avenues wherein people rather than stakeholders can have a say in its policies and decision-making. Besides, its policies must lead to equitable outcomes and also appear to be doing so. Unless WTO is able to devise some mechanism to address these issues, its edifice based on fragile legitimacy will remain unstable.

EPW

Email: jayatis@mail.jnu.ac.in

and international organisation has been used

inter changeably in the paper.

macy are not necessarily automatic. Institutions

like the courts, even though unelected, derive

their legitimacy from a clear delegation of

constitutional authority, through transparent

and efficient decision-making which are open

to debate and appeal. Besides, in recent years

many democracies, especially western demo

cracies are facing a crisis of confidence and

legitimacy on account of widespread scepticism

reflected in a decline in the number of people

participating in voting during elections.

4 The differences of opinions between developed countries (who favour an explicit linkage ontrade and environment and labour, etc) and developing counties further complicates thematter. These non-trade issues have not been addressed by the WTO except intermittently but in the long run would turn out to be oneof the most significant challenges.

5 The DDA adopted at the fourth ministerial conference in 2001 is aimed at reforming theworld trade rules, open new markets for goodsand services, and promote economic andpolitical progress throughout the developingworld. Under the agreement, the US and theEU are expected to cut their farm subsidiesand the LDCs are given more leeway toprotect livelihoods and in return are expectedto cut tariffs in manufactured goods in aphased manner. The subsequent negotiations at Cancun, Geneva, Paris and Hong Konghave failed to work out the modalities of DDA implementation. Agricultural subsidies/protectionism in the European countries and the UShas turned out to be the most significant and difficult to negotiate issue.

6 The US has negotiated free trade agreements with 13 countries, and is negotiating with 10more – including key strategic allies like UAE,Bahrain, South Africa and Thailand. China is also working on building an East Asian free trade bloc and has signed bilateral deals withthe ASEAN countries and is in talks with New Zealand and Australia, and possiblyKorea and Japan. EU too is working on anambitious economic partnership agreementwith the former colonies of 69 African, Caribbean and Pacific nations and cementing tieswith the Mediterranean.

7 In legal parlance, the phrase is used for a brieffiled with the court by someone who is not aparty to the litigation/dispute but who believesthat the court’s decision may affect his/her interest. The traditional function of amicus curiae is to assert one’s own interest which is separate and distinct from that of parties.

8 European Communities – Measures Affecting Asbestos and Asbestos-Containing Products, Report of the Panel, WT/DS135/R, September 18, 2000, paras 6.1-6.4 and 8.12-8.14.

9 WTO, Minutes of the Governing CouncilMeeting on November 22, 2000, WT/GC/M/60,January 23, 2001.

10 Continued Suspension of Obligations in the EC-Hormones, http://www.wto.org/english/news_e/news05_e/openpanel_12sep_e.htm

11 Stakeholder refers to a person or organisation that has a legitimate interest in a project orentity. That includes not only vendors, employees, and customers, but even members ofa community where its offices or factory mayaffect the local economy or environment. In discussing the decision-making process forinstitutions, the concept has been broadenedto include everyone with an interest/stake inwhat the organisation does.

12 The first meeting of the groups took place onJune 15, 2003. The bodies are set to meet twice every year but both the DG and members arefree to consult each other more often. The members of the bodies are free to suggest issuesthemselves or seek advice from the DG.

13 They include the Consumers International,Consumer Unity and Trust Society, the International Federation of Agricultural Producers, World Wide Fund for Nature International (WWF), Third World Network, Christian Aid, the International Confederation of Free Trade Unions, Public Services International, the International Centre for Trade and Sustainable Development, and the International Institute for Sustainable Development.

14 Friends of the Earth International declined to participate in the advisory body due to thecreation of a parallel informal business advisory body which in its perception wouldfurther consolidate the unparalleled access totrade negotiators that the business community already has and “could worsen ratherthan improve the WTO’s endemic problems with secrecy, internally or with civil society”. FOEI Media Release (2003), ‘WTO Director’s Invitation Declined and ‘Business Advisory Body’ Blasted’, June 12.

15 The members of the consultative board are drawn from government, academia, business, non-profit sector, trade and economic policymaking field. It includes Peter Sunderland, Jagdish Bhagwati, Kwesi Botchwey, NiallW A FitzGerald KBE, Koichi Hamada, John Jackson, Celso Lafer and Thierry de Montbrial, ICTSD, Bridges Weekly Trade News Digest, Vol 7, No 23, June 25, 2003, p 9.

16 WTO News, November 22, 2000.

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