VJIL Symposium: Introducing “Carving Out Policy Autonomy for Developing Countries at the World Trade Organization”

[Alvaro Santos is currently an Associate Professor of Law at the Georgetown University Law Center.]

This post is part of the Virginia Journal of International Law/Opinio Juris Symposium, Volume 52, Issue 3. Other posts in this series can be found in the related posts below.

I would like to thank the Virginia Journal of International Law for the invitation to participate in this online symposium and to Opinio Juris for featuring my article and hosting this discussion.

In “Carving Out Policy Autonomy for Developing Countries in the World Trade Organization: The Experience of Brazil and Mexico”, I argue against the commonly held assumption that WTO legal obligations overly restrict countries’ regulatory autonomy. Despite the presence of restrictions, I claim that there is still flexibility in the system for countries to carve out regulatory space for themselves. That countries can expand their policy autonomy means that governments of developing countries have more agency and responsibility than development scholars typically admit. At the same time, however, the asymmetry of power and resources between countries does affect their experience in the system and thus influences the outcomes to a greater extent than liberal trade scholars usually acknowledge.

This Article provides an account of how countries are creating policy space in a way that is currently underappreciated in existing academic literature. This space relies on the ability of countries, as repeat players (RPs), to make use of textual open-endedness in legal obligations, to seek out favorable rule interpretation, and to actively participate in the WTO system through strategic lawyering and litigation. To pursue this strategy, countries invest in “developmental legal capacity,” through which governments recognize the need to make gains in policy autonomy in order to pursue economic policy goals that may be in tension with the WTO’s free trade objectives.

This Article draws on two case studies to examine the availability of policy space within WTO obligations and the role of developmental legal capacity. It analyzes the trajectories of Brazil and Mexico in the WTO to show two different experiences of RPs. The divergent lawyering and litigation experiences of Brazil and Mexico reflect different attitudes towards the free trade regime inaugurated by the WTO. Mexico seems to have considered WTO membership — part of its trade liberalization policy — as a strategy for economic growth in itself. It has largely abandoned its powers to selectively promote specific sectors in which it may create comparative advantages with greater growth potential. In contrast, Brazil seems to have combined a strategy to promote market access for its exports with domestic measures to promote economic sectors it considers valuable. When other countries in the WTO have challenged those measures, Brazil has defended them and thus expanded its policy space within the system.

The lesson to draw from the experience of Brazil and Mexico is not that one trajectory is better than the other. Rather, the lesson is that the economic trajectory depends, not only on the international trade regime, but also on the domestic economic strategy of each country. Therefore, the responsibility of the virtues and vices that one may associate with each of these divergent strategies must also be placed largely on the domestic government and the economic policies it has decided to follow.

To say that we should turn our attention to the domestic economic policies is not to say, however, that the international legal framework is unimportant. Rather, it is to say that despite the international constraints, countries can expand their policy space — if they deem it desirable — and find room for policies they want to advance. The Article recognizes that there are limits to what countries can do. Not all rules are ambiguous and subject to favorable interpretation. Not all strategic lawyering will turn to an advantage either. Moreover, carving out policy space requires significant resources — material, human, political — that not all countries may easily muster in order to become RPs. Poorer countries may therefore experience greater limits — real or apparent — imposed by the international trade regime. However, to show that countries subjected to similar international obligations can pursue divergent trade and development policies is to make clear that there is policy space and that this space can be put to different uses with divergent outcomes. Developing countries’ governments should bear responsibility — and their citizens should hold them accountable — for the kind of developing strategy they pursue, or refrain from pursuing, within the international trade regime.

I am very much looking forward to the upcoming discussion.